What are invisible economy and invisible economic behavior?

the so-called invisible economy refers to all kinds of economic activities outside the government's management and supervision. There are broad and narrow distinctions in invisible economy. Narrow sense mainly refers to tax evasion activities; In a broad sense, it refers to all kinds of economies that are outside the official statistics of the state, including tax evasion activities, all kinds of illegal economic activities and other business activities that are not managed by the state.

performance of invisible economy

fake and shoddy goods

producing fake and shoddy products is an illegal economic activity. Whether it is carried out in underground factories or legally registered enterprises, it cannot change the nature of the invisible economy. The market share of fake and shoddy products is amazing. In the autumn of 199, the Ministry of Light Industry conducted sampling tests on the tourist shoes and glued leather shoes sold in Beijing. The results showed that 67% of the tourist shoes were unqualified and 55% of the glued leather shoes were unqualified.

according to the spot check data of ten major cities in China in 1992, the unqualified rate of glasses produced and assembled reached 7%, and the qualified rate of collective and individual businesses was only 5%. For example, the "Audi" limousine made by China No.1 Automobile Factory, the king of domestic cars, even accounts for 2% of counterfeit goods. That is to say, one in every five Audi cars running on the street is counterfeit on average. The counterfeit and shoddy products have brought serious damage to consumers, caused great losses to the national economy and damaged China's international image more seriously. Our government has always attached great importance to the work of banning fake and inferior products, but it can't be said that it has won. Under the temptation of high profits, some enterprises or individuals will take risks.

Smuggling

Internationally, smuggling generally refers to the act of illegally transporting goods, currency and other articles into and out of a country (border) for the purpose of obtaining illegal profits or huge profits, in violation of the customs regulations of a country, to escape the management or monopoly of foreign trade through the country's borders. Smuggling is an invisible economic activity with illegal and criminal nature. The "Hainan Automobile Incident" can be said to be the representative of the first car smuggling frenzy in China. After severe investigation and punishment by law enforcement departments, car smuggling activities were once restrained.

however, in 1999, the "Zhanjiang automobile smuggling case" that shocked the whole country was solved, which not only made corrupt officials involved in smuggling fall off their horses one after another, but also revealed the scale and severity of smuggling to the Chinese people. In addition to cars, the smuggling targets are drugs, cigarettes, home appliances, old clothes and so on. Smuggling makes the huge customs duties that should have been paid to the state treasury lose, causing great losses to the country. It is estimated that more than 4 million pieces of foreign cigarettes are smuggled into China every year, accounting for 9% of China's cigarette market share, and the sales revenue is equivalent to 1/4 of China's current tobacco industry.

"It's easy to get rich if you pour cigarettes, and it's ten thousand yuan a month". The lure of huge profits has made the smuggling of foreign cigarettes show a vicious growth trend. In recent years, the relevant departments have taken many measures to smuggle old clothes in a straight line. However, because the traders who smuggle old clothes can only take the measures of confiscation, burning old clothes and fines, and reselling clothes is profitable, smuggling old clothes has been repeatedly banned, and the illegality and harmfulness of drug smuggling are self-evident.

operating without a license

among those who operate from multiple individuals, a considerable part are artisans from all walks of life.

More than 9% of the artisans operate without a license, except for a few who rent houses and set up stalls in markets and street areas. "Hanging household management" is a farmer's family enterprise affiliated to township enterprises in rural areas at present. It has no legal status and uses the name of the affiliated enterprise to carry out production and business activities. In addition, even collective, state-owned enterprises and unlicensed operators are not uncommon.

False losses of foreign businessmen

According to the new tax law implemented in China on July 1, 1979, the preferential treatment of "two exemptions and three reductions" for productive foreign-funded enterprises is calculated from the year when the enterprise begins to obtain, and the interests of newly-established enterprises are fully considered. However, the loss rate of foreign-funded enterprises in China has actually reached the point where it is not equal to that of state-owned enterprises! Moreover, it is more difficult to explain that this quite common "loss" phenomenon has not affected the enthusiasm of overseas people and enterprises to invest in the mainland. An aluminum development company in Hubei Province has suffered losses year after year since its opening, and the amount is relatively large. However, the company continues to expand its business scale, and its total investment has increased from 5 million US dollars to more than 1 million US dollars. Foreign-funded enterprises have made false profits by stealing, leaking, avoiding taxes and eating foreign exchange, operating outside the account and evaluating intangible assets at high prices.

[ Editor] The influence of China's invisible economy on social and economic activities

As an economic activity beyond national management and supervision, the invisible economy exists as the opposite of legal and open economic activities. Macroscopically, it impacts the social economy, escapes the management control of the state, and cannot improve the macro-benefit; The irregularity and anti-order of its economic behavior is an infringement and destruction of the normal social and economic order and operating rules. Microscopically, it can't promote healthy market competition and improve quality of enterprise. Its negative effects can be as follows:

1. It leads to the loss of national fiscal revenue

Taxation is the main source of fiscal revenue of any country. Invisible economic activities deprive the government of the fiscal revenue it needs through tax evasion, smuggling, underground factories and other activities. A large number of tax evasion has a serious impact on the tax structure and national economy, which leads to the narrowing of the tax base, eroding the progressive tax rate, damaging the principle of tax equality, reducing the income elasticity of income tax and affecting tax action.

2. Disrupting the circulation order

In the industry, due to the competition of non-taxable enterprises, tax-paying enterprises will face cost disadvantages and reduced sales, thus being at a disadvantage in the competition. What's more, the production of some fake and shoddy products has almost discredited "regular" enterprises. In the circulation field, there is a shortage of materials, and employees of non-tax enterprises use various relationships to hoard and drive up prices, which leads to the allocation of resources from tax departments to non-tax or some illegal production departments, threatening legitimate enterprises to operate and produce.

3. The distortion of social information leads to the failure of macro-control policies.

Tax evasion will distort the statistical data of some government departments. For example, the statistics of national income depends on the statistics of tax sources. If the data of tax sources are deviated due to tax evasion, the basic macroeconomic system of the country will inevitably be distorted, that is, the facts in economic life will be distorted because the government cannot fully "observe" the hidden invisible economic activities. Once the information source in the social information system is distorted, the social information system will become invalid as a result, because it is the guide and basis for theoretical analysis and policy formulation. Information distortion will fundamentally affect the stability of economic life.

4. It leads to unfair distribution and the corruption of social morality

The invisible economy is an undercurrent that erodes our society. It illegally redistributes income from honest workers and enterprises to illegal individuals and enterprises, and social wealth quickly flows to those engaged in invisible economic activities, which makes taxpayers' trust in the government decline. Where the invisible economy is rampant, people's professional ethics are weakened by harming the public and enriching the private and turning the public into the private; Those who are law-abiding and honest are isolated, while those who "lend flowers to offer Buddha" in the national interest have become "good cadres". In this case, there is confusion between right and wrong, which leads to confusion of people's thoughts and loss of cohesion.

5. Transaction of money and power corrodes the state system

As a transaction of money and power for bribery, "rent-seeking" occupies a special position in invisible economic activities, which makes the behavior of some government officials enter the scope of invisible economy in more complicated and hidden transactions. Using state-owned assets to do illegal transactions from official channels for personal gain, these activities have directly led to the serious loss of state-owned assets, making government officials lose their positions and abandon their principles for personal gain, disrupting normal order and corroding the state system.

Therefore, where the invisible economy is openly and semi-openly rampant, it is generally where bribery is prevalent and corruption is prevalent. Some powerful cadres in party member accept bribes and embezzle, which is an important reason why invisible economic activities are repeatedly banned.

[ Editor] The characteristics of the invisible economy

The three characteristics of the invisible economy are secrecy and fuzziness.

secrecy

the economic activities of the invisible economy are carried out in secret. Although people can see these phenomena and feel their existence in their daily economic life, they can't know their faces through open statistics. Because those who engage in invisible economic activities will not submit true annual reports and monthly statements to government agencies.

in the open national economic statistics, there are almost no traces of their existence. Watanabe, the former minister of Japan's Ministry of Finance, once famously said in the defense of the National Assembly: "If you want to ask how large the invisible economy is, we can't answer it because we can't understand it. It is precisely because it is impossible to know that it is called the invisible economy. "

fuzziness

the fuzziness of the invisible economy is not only manifested in the difficulty in defining the quantitative boundary of the invisible economy scale, but also in the distinction. Invisible economy generally refers to all economic activities except those that are open and included in official statistics, and these economic activities are quite different from each other in content, form, nature and activity characteristics.

As an informal economic activity, invisible economic activities are almost everywhere as a supplement to formal economic activities. On the other hand, because they are not "formal" and do not undertake formal functions, it is difficult to find their position in the economic operation system. The dividing line between invisible economy and open economy is vague. The two are not "well water does not interfere with river water", but are interrelated and intertwined.

the legality of variability

is one of the main signs that distinguish open economy from invisible economy. Therefore, if the "law" changes, the original illegal becomes legal, and the original legal becomes illegal, then the boundary between the open economy and the invisible economy will also change. Moreover, for different regions and countries, the same type of economic activities may be classified as opposing categories.

a comprehensive and profound understanding of these characteristics of the invisible economy is of great practical significance for us to fully understand the problems and shortcomings in the current economic system or the transformation of the old and new systems, do a good job in rectification and deepen the reform work.

[ Editor] Governing the invisible economy

The emergence and development of the invisible economy has its profound social and economic roots, and the governance of the invisible economy is a huge systematic project. Governing the invisible economy is an important task of the administrative department for industry and commerce.

(a) strict market access, standardize market competition, improve the supervision and management of various economies. It is necessary to organize the departments of finance, finance, industry and commerce, taxation, auditing, justice and various administrative and industrial management departments in a planned way, conduct a comprehensive survey of invisible economic activities existing in the fields of production, distribution, circulation and consumption, and invisible economic activities existing in enterprises, institutions, organizations, troops, farmers, workers, intellectuals, cadres, self-employed and private entrepreneurs and other social workers, so as to make unqualified subjects withdraw from the market.

(2) strengthen the management of production links. For the products produced by enterprises, it is necessary to effectively implement the production license system and product certificate system, and strengthen quality monitoring. Those that fail to meet the requirements shall not be illegally produced, and those that fail to meet the quality indicators shall not be listed, so as to prevent counterfeit and shoddy goods from entering the market and harming the interests of consumers.

(3) Vigorously strengthen regional economic management power, strengthen economic legal system construction and legislation on floating population's economic activities, and standardize economic activities.

(4) vigorously promote economic restructuring. China's traditional economic management system has serious defects, which provide soil and conditions for the growth of hidden economy. American economist Lilin Ban Wickell pointed out: "The invisible economy is a detector of all kinds of social unrest factors caused by all laws, regulations and rules. In other words, the invisible economy can be regarded as a strange fetus of sound institutions and laws. "

China's invisible economy exists not so much as the opposite of the current legal system and its imperfect management system, but rather as a * * * creature with a seriously flawed management system. Therefore, vigorously promoting economic system reform is an effective way to curb the proliferation of invisible economy.