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No bid, no sales, no raw materials! How do pharmaceutical companies that are "holding their throats" survive?

No bid, no sales; There is no raw material in the bid. Can pharmaceutical companies with "involuntary fate" survive in the cracks?

Recently, Zhejiang Pharmaceutical Machinery Purchasing Center issued a notice on suspending the online trading of cefmetazole sodium for injection of Suzhou Dongrui Pharmaceutical Co., Ltd. (hereinafter referred to as Dongrui Pharmaceutical).

Description of the announcement: The cefmetazole sodium for injection produced by Suzhou Dongrui Pharmaceutical Co., Ltd. failed to fulfill the obligation of selecting the first batch of drugs in our province, and said that the raw materials of cefmetazole sodium for injection could not be purchased and the normal supply of the drug could not be guaranteed. After research, the online trading of cefmetazole sodium for injection (specifications: 0.5g and 1.0g) produced by Suzhou Dongrui Pharmaceutical Co., Ltd. will be suspended from now on.

According to the description in the announcement, the reason why Dongrui Pharmaceutical fulfilled the obligation of winning the bid was related to the inability to purchase raw materials.

01 or withdraw from the network due to the supply of raw materials.

In November, 2020, Zhejiang Medical Machinery Procurement Center issued the Procurement Document for Centralized Procurement of Some Drugs in Zhejiang Province, announcing that eight drugs, such as Rabeprazole Oral Constant Release Dosage, Ursodeoxycholic Acid Oral Constant Release Dosage and Cefemetazole Injection, will be purchased with quantity, and the procurement cycle will be 12 months. Among them, the agreed purchase quantity of cefmetazole injection (specification 1.0g) is 2,502,800 pieces.

In January this year, Zhejiang Medical Machinery Purchasing Center announced the results of the selection, involving 10 varieties. According to the principle of winning the bid in Zhejiang Province, if there are more than two bidding enterprises, the lowest quotation will be selected, and only one enterprise can be selected. Dongrui Pharmaceutical beat 17 other competitors, such as Harbin Pharmaceutical Group, Fuan Qingyutang, Beite Pharmaceutical, etc. The company’s cefmetazole sodium for injection (powder injection, packaging specification: 1.0g/ bottle) was selected by 8.2 yuan. The successful result will be implemented from March 15th.

However, on April 14th, Zhejiang Pharmaceutical Machinery Purchasing Center released another report on the purchasing results of cefmetazole sodium injection. According to the circular, because Dongrui Pharmaceutical refused to fulfill its bid-winning obligations, it did not complete the work of signing the purchase and sale agreement and establishing the distribution relationship, which affected the normal implementation of the bid-winning results. As for the lack of cefmetazole sodium in centralized drugs due to Dongrui Pharmaceutical’s failure to fulfill the obligation of selection, the processing method of Zhejiang Medical Machinery Purchasing Center is that the purchase of cefmetazole sodium injection with quantity is treated as no selected product, and all medical and health institutions temporarily purchase it according to the original method.

Dongrui Pharmaceutical may also be defended for failing to fulfill its obligations as required and causing losses to medical and health institutions.

For enterprises with dishonesty, Zhejiang Medical Equipment Purchasing Center has also implemented notification measures while reminding medical and health institutions to choose carefully and avoid purchasing products from untrustworthy enterprises.

When pharmaceutical companies participate in centralized procurement declaration, they will be required to provide the Commitment Letter of Drug Declaration Enterprise. Among them, it includes the requirement of credibility: there is no serious illegal record in the two years before the declaration, such as disturbing the order of centralized procurement, maliciously violating the contract and other acts contrary to honesty and credit. The requirement for production capacity is that the annual production capacity of the declared varieties should reach 2 times or more of the agreed purchase quantity. If it is untrue, it is willing to accept the treatment including canceling the qualification for winning the bid and including bad records.

Under normal circumstances, the punishment result of the successful company’s failure to fulfill the obligation of successful selection will be more serious, while the punishment result of Dongrui Pharmaceutical this time is notification, which is relatively light. This result may be related to the inability of Dongrui Pharmaceutical to purchase APIs.

According to the company’s official website, Dongrui Pharmaceutical is mainly engaged in the development, manufacture and sales of cephalosporin antibiotics and system specialized drugs. According to the information of domestic drugs in National Medical Products Administration, there are currently 28 pharmaceutical companies in China with a total of 65 registered production approvals of Cefmetazole Sodium for Injection. Suzhou Dongrui has registered production approval documents of 1.0g and 0.5g cefmetazole sodium for injection.

According to media reports, it was learned from interviews with several regional sales leaders of Suzhou Dongrui that raw materials could not be purchased because the upstream raw material enterprises were unwilling to supply Suzhou Dongrui. "At first, we were told to raise prices substantially, but we accepted it. But then the manufacturer said that it could not be supplied. " Informed employees of the company revealed.

In China, only six pharmaceutical companies, including Harbin Pharmaceutical Group, Fuan Pharmaceutical Group, Chongqing Bosheng Pharmaceutical and Chongqing Gisrui Pharmaceutical, have registered production approval documents for cefmetazole sodium raw materials.

According to Health Network, in February this year, the price of rare varieties of cephalosporin raw materials doubled, and the most concerned small product was cefmetazole sodium raw material. The recent price increase was caused by the price increase of raw materials and the lack of manufacturers. The original price of domestic manufacturers was about 4,000 yuan /kg, and now it is quoted at 8,000 yuan /kg.

The supply cut-off incident of Dongrui Pharmaceutical further highlights the "dilemma" faced by pharmaceutical companies whose raw materials are not in their own hands: if a large number of raw materials are hoarded before the election, but the results are not selected, the pharmaceutical companies will face the risk of unsalable products and broken capital chains at any time; If you don’t hoard a large number of APIs, but the result is selected, you will face the current problem of Dongrui Pharmaceutical, "you can’t buy APIs with money", which will eventually lead to the suspension of drug supply.

02 API monopoly, who is controlling it?

Since the procurement with quantity was carried out at the end of 2018, the supply interruption of selected products has occurred from time to time.

In 2019, the supply of Fosinopril sodium tablets of Bristol-Myers Squibb (BMS) was cut off due to insufficient supply, which became the first cut-off event after centralized procurement, and was finally supplemented by Huahai Pharmaceutical. At the end of last year, two selected products, Penglai Nuokang Pharmaceutical Metformin Tablets and Nanjing Changao Pharmaceutical Pivastatin Calcium Tablets, were unable to be supplied in sufficient quantities in a short period of time, so the transition period was increased by three months.

There are many reasons for drug supply interruption, and the shortage and price increase of raw materials are very important factors. In recent years, many API companies have also been issued "sky-high fines" for alleged monopoly.

At the beginning of this month, Tianyao Co., Ltd. was punished by Tianjin Municipal Market Supervision and Management Committee for allegedly reaching a monopoly agreement on fluoxetine bulk drug, with a fine of 44.02 million yuan.

In April, 2020, the State Administration of Market Supervision made an administrative penalty decision on the illegal acts of abusing the dominant market position of three calcium gluconate raw material drug distribution enterprises, namely Shandong Kanghui Medicine, Weifang Taiyangshen Medicine and Weifang Puyunhui Medicine, and confiscated a total of 325.5 million yuan. This is also the biggest fine for the monopoly of APIs since the implementation of the Anti-Monopoly Law.

In November 2020, Wanbangde Pharmaceutical was fined 2.474 million yuan for abusing its dominant market position and attaching unreasonable trading conditions to the production and sale of bromhexine hydrochloride.

According to the Annual Report on Anti-monopoly Law Enforcement in China (2019) issued by the State Administration of Market Supervision at the end of 2020, there were 6 monopoly cases in the API industry in 2019. According to incomplete statistics, since 2016, a total of 15 companies, including Tianyao Co., Ltd., have been subject to administrative penalties for monopolistic behavior of APIs.

Why monopoly events frequently occur in the field of APIs?

There may be "passive" and "active" reasons for this.

"More registered pieces, less actual production". China holds 8482 valid API approval documents, and there are 1699 pharmaceutical companies with API production license qualifications. However, there are few companies that can actually produce and actually produce.

According to the information released by the Price Supervision, Inspection and Anti-monopoly Bureau of the National Development and Reform Commission, there are about 1,500 kinds of APIs in China, but their production is in the hands of a few manufacturers, of which only one enterprise can produce 50 kinds of APIs, only two enterprises can produce 44 kinds of APIs and only three enterprises can produce 40 kinds of APIs. Some people in the industry have also analyzed that many enterprises are unwilling to produce low-priced drugs because of their low prices and low profits, which is more likely to lead to monopoly.

"Environmental protection costs are under great pressure". On January 1, 2018, the "Environmental Protection Tax Law" was officially implemented, and the collection of sewage charges was changed to the collection of environmental protection fees, which greatly increased the cost for API manufacturers that needed a large amount of sewage discharge. Raw material medicine enterprises urgently need to be upgraded, and in the process of upgrading, some enterprises closed down because they could not bear the cost of upgrading.

Only a few companies have the qualification for examination and approval and the production capacity. In addition, with the increase of costs, the number of API enterprises has further decreased, and the output has also been affected.

According to the data of the National Bureau of Statistics, since 2018, the output of APIs in China has experienced a cliff-like decline, from 3.478 million tons in 2017 to 2.823 million tons in 2018, and then to 2.621 million tons in 2019. In the case of "scarcity is precious", the price of raw materials has also soared. In 2018, the price of roxithromycin rose from 590 yuan/kg in May to 735 yuan/kg in October. The price of chlorpheniramine, commonly used in cold medicine, rose from 400 yuan /kg to 23,300 yuan /kg in just one month, up 58 times.

In view of the "passive" monopoly of API enterprises, Wu Huifang, the general manager and chief researcher of Health Network, has conducted an analysis before. "There are mainly two aspects: on the one hand, the output is not large, although there are some approval numbers for APIs, there are few manufacturers that can actually produce them normally, and the size of preparation manufacturers is uneven. In this case, the price increase of APIs is also a last resort; On the other hand, the monopoly of many APIs is not caused by the active behavior of API companies, but by the competitive means of preparation distributors, especially for preparation bidding, that is, the underwriting party forces competitors to make concessions in preparation bidding by controlling the supply of APIs. "

In addition to the "passive" factors, there are also many enterprises in the market who choose to "do it intentionally". According to insiders, some of the monopoly phenomena of APIs are due to human manipulation. One mode is to indirectly control several natural persons to acquire the approval documents, so that all the market of the API is assigned to its own "circle", and finally only one of them is allowed to produce, and the rest of the approval documents are idle, resulting in monopoly of the market, and then the price is raised. Another mode is to sign a "National General Underwriting Agreement" between a third-party commercial company and an API enterprise, so that all APIs can be brought together. If you want to buy APIs, you can only buy them through the channels provided by the company, but API enterprises can’t participate in the pricing, resulting in monopoly.

These models make it more difficult for the regulatory authorities to investigate and deal with monopoly events.

In addition, according to Article 47 of the Anti-Monopoly Law, "if an operator violates the provisions of this law and abuses the dominant position in the market, the anti-monopoly law enforcement agency shall order him to stop the illegal act, confiscate the illegal income and impose a fine of more than 1% and less than 10% of the sales in the previous year."

In the monopoly case of Tianyao shares, Tianyao shares were fined 4% of sales in 2019 and confiscated illegal income. The proportion of 4% is not high in recent years because of the monopoly of APIs. Previously, Kanghui Company, Puyunhui Company and Taiyangshen Company were fined 10%, 9% and 7% of the annual sales in 2018 respectively for the monopoly of calcium gluconate for API injection.

However, in terms of the amount, the 4% sales of Tianyao Co., Ltd. in 2019 corresponds to about 35.1247 million yuan, while the 9% sales of Puyunhui Company in 2018 are 48.3 million yuan, and the 7% sales of Helios Company in 2018 are 12.4 million yuan. After receiving the ticket, Tianyao Co., Ltd. lowered its estimated net profit in 2020 from the original "55 million yuan-75 million yuan" to "31 million yuan-37 million yuan", which is equivalent to a fine of nearly half of the net profit for one year.

Compared with the sales of 10% in the previous year, the price difference and huge profits brought by monopoly for several consecutive years will still make some companies choose to take risks, which is one of the reasons why the monopoly of APIs has been repeatedly banned.

How to deal with the downstream pharmaceutical enterprises

The monopoly of APIs is undoubtedly "strangled" for some downstream pharmaceutical companies. The price of raw materials is rising, and the price of centralized drugs is low. The profit margin of pharmaceutical enterprises is constantly being compressed and even the phenomenon of "price upside down" appears. Without profit margin, many pharmaceutical companies can’t give up drug production, which leads to the shortage and interruption of supply of commonly used drugs, which is extremely unfavorable to society and ordinary people.

Faced with the monopoly of APIs, the national regulatory authorities have been "striking hard" and cracking down on monopoly. And how should pharmaceutical companies in the downstream "save themselves"?

Wu Huifang said that in the market competition, the powerful preparation manufacturers left behind have sufficient purchasing power, and they are planned and do not owe debts; In addition, we can follow the procurement mode of pharmaceutical preparations, and pharmaceutical enterprises can jointly bid for the procurement of raw materials.

It is also reported that Dongrui Pharmaceutical, which withdrew from the network due to the interruption of the supply of raw materials, will build its own raw material drug production line in the future and "take its fate in its own hands".

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Ministry of Transport: Four measures to prevent and control the epidemic situation in Spring Festival travel rush and provide services.

  People’s Daily Online, Beijing, January 30 (Reporter Lu Jing) On January 30, the joint prevention and control mechanism of the State Council held a press conference. Han Jinghua, Deputy Director of the Transport Services Department of the Ministry of Transport, attended the conference and answered questions from reporters.

  This year, the passenger flow in Spring Festival travel rush has increased substantially. How can the Ministry of Transport do a good job in epidemic prevention and control and service? Han Jinghua introduced that there are four specific measures as follows:

  The first is to formulate and implement epidemic prevention guidelines and refine the prevention and control measures of epidemic situation. According to the requirements of "Class B Management" and the characteristics of passenger flow in Spring Festival travel rush, the epidemic prevention and control guidelines for comprehensive transportation in Spring Festival travel rush and Covid-19 were formulated, and 14 epidemic prevention measures were defined in four aspects: disinfection and ventilation of stations and means of transport, protection of employees, publicity and guidance, and emergency response. Strengthen dispatch and supervision, guide all localities to strictly implement the requirements of the guidelines, disinfect and ventilate the passenger contact areas, facilities, equipment and means of transportation in the station, strengthen the health monitoring and protection of employees, and stop operations as soon as symptoms appear to ensure the safety of transportation and epidemic prevention.

  The second is to optimize transportation service measures to minimize the risk of infection. Actively provide non-contact services such as online ticket purchase, e-ticket and self-service ticket inspection to reduce unnecessary personnel contact. Strengthen the passenger flow organization of passenger stations, guide the public to queue up in an orderly manner, disperse and wait for passengers, and reduce the concentration of people. Increase the input of transportation capacity during peak hours, operate "point-to-point" chartered cars and increase night buses according to the needs of the masses, strengthen the connection between different modes of transportation, improve the transportation service capacity, and reduce the gathering of people and long waiting. At the same time, some key passenger stations have also prepared necessary epidemic prevention materials such as antipyretics and thermometers to deal with emergencies.

  The third is to organize supervision and inspection and implement the main responsibility of epidemic prevention and control. In order to implement the epidemic prevention measures of transportation, transportation departments at all levels have carried out various forms of comprehensive and special inspections. Before the Spring Festival, the Ministry of Transport, together with relevant departments, went to 13 provinces to carry out supervision and inspection, and urged transport operators to strictly implement epidemic prevention and control measures such as disinfection and ventilation of passenger stations and vehicles, transportation organization and personnel protection, and resolutely guard against the spread of the epidemic through transportation.

  The fourth is to strengthen epidemic prevention propaganda and guide the masses to travel rationally at the wrong peak. Make full use of service guarantee windows such as "cars, boats, airplanes, roads, ports and stations" and media channels such as television, radio and internet, strengthen epidemic prevention propaganda, release travel information in time, guide the public to travel rationally and avoid peaks, remind passengers to avoid taking public transport when they are sick, wear masks regularly throughout the trip, actively reduce gathering, and be the first person responsible for their own health.

  In addition, Han Jinghua stressed that at present, it is at the peak of returning after the holiday, reminding the majority of passengers that in order to be safe and healthy, they should wear masks all the way in the process of entering and leaving the passenger station and taking public transportation, and work together to prevent and control the traffic epidemic.

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Luohe, Henan Province: "Handling Cases+Education" fully protects minors.

The little "Luo" whistled and set sail.

Luohe, Henan Province: "Handling Cases+Education" fully protects minors.

In November 2023, students from Luohe Experimental Primary School went to the Comprehensive Protection Center for Minors in the city to participate in the immersive practice of rule of law.

"There are legal provisions and judicial cases in this’ online celebrity Exhibition Hall’, and the prosecutor’s sister also taught us how to deal with bad people and prevent infringement." Recently, students from West Lake School in Luohe City, Henan Province, led by their teachers, came to the exhibition hall of rule of law education in Luohe City Comprehensive Protection Center for Minors and completed a unique study tour of rule of law.

The reporter learned that there are 4 exhibition areas and 16 themes in the exhibition hall of rule of law education in Luohe Comprehensive Protection Center for Minors, which integrates the functions of visiting, teaching, experience and practice by using situational experience and game interaction. With the help of the announcement (admonition) room, information (inquiry) room and psychological counseling room set up in the comprehensive case-handling area of the center, the procuratorate of Luohe City comprehensively carried out procuratorial case handling, psychological counseling, comprehensive assistance and parental education. Since its establishment in December 2019, the center has received more than 7,800 visitors and carried out 52 legal practice activities, which has not only become an important position for the mutual promotion of procuratorial handling and legal education, but also a "punching place" for legal education for minors in online celebrity.

Enhance the effectiveness of rule of law education

"I used to think that loving children is to make him worry-free, so I patronize working to earn money and rarely communicate with children." In June 2023, when accompanying the children to visit the exhibition hall of rule of law education in Luohe Comprehensive Protection Center for Minors, the mother of Ma, a minor involved in the crime, choked.

In July 2022, when handling a suspected theft case of Ma, the prosecutor of the Yancheng District Procuratorate of Luohe City found that Ma’s mother worked outside the home all the year round, and Ma had been living with her grandmother. Ma has been infected with Internet addiction due to the lack of family supervision. If he is not helped to quit Internet addiction, he still has the risk of committing crimes again.

In view of this, the procuratorate and the Women’s Federation jointly provided family education guidance to Ma’s mother, suggesting that she communicate with her children more, strengthen supervision and help Ma quit Internet addiction. After 10 months of investigation and assistance, on May 15, 2023, Ma was decided not to prosecute by the Yancheng District Procuratorate.

"In view of the problems such as the lack of family education and the absence of guardianship reflected in cases involving minors, we have produced courses such as" Talking about family education from the’ long season’ ",focusing on improving parents’ self-literacy, improving improper education methods, strengthening parent-child communication, and building a defense line for family guardianship, and reminding parents with the most real cases." Jun Hu, head of the unchecked department of Luohe City Procuratorate, said.

The reporter learned that Luohe Comprehensive Protection Center for Minors has a theater of rule of law and a mock trial. In view of the rule of law needs of students of different ages, combined with the legal blind spots and key points found in the practice of handling cases, prosecutors have produced more than 40 lecture courseware, scenario scripts and simulation cases on different topics such as preventing school bullying and preventing telecommunication network fraud, and actively fed back the course menu to the school for selection.

Since 2022, the procuratorate of Luohe City has given full play to the various functions of the Luohe Comprehensive Protection Center for Minors, and based on this, it has created the brand of "Yu Jian Future Xiao Luo" for minors’ procuratorial work. Since 2022, the Seventh Procuratorial Department of Luohe City Procuratorate has been awarded the National Advanced Collective for Safeguarding Women’s and Children’s Rights and Interests, the Henan Youth Rights and Interests Post and the National Youth Rights and Interests Post. The center was awarded as an excellent publicity and education base of the rule of law in Henan Province and a demonstration base of family education in Henan Province.

"This kind of case teaching and interactive experience based on procuratorial handling cases has changed the single mode of popularizing law, such as distributing brochures and teaching in class, realized the close combination of rule of law education and high-quality and efficient handling cases, and greatly improved the publicity effect of popularizing law." On August 17, 2023, Ning Yaqiu, deputy to the National People’s Congress and deputy director of the editorial office of Luohe Radio and Television Station in Henan Province, said at the unveiling ceremony of the Henan Provincial Procuratorate’s Comprehensive Protection Center for Minors.

Expand the source of supervision cases

In July 2022, Wang, an obstetrician and gynecologist in a hospital in Wuyang County, found that Xiao Yu (12 years old) was suspected of being sexually assaulted. Wang reported the case to the police at the first time according to the compulsory reporting system for cases against minors. The public security organs quickly launched an investigation, and the Wuyang County Procuratorate intervened in advance to guide the investigation according to law. In the end, the defendant was sentenced to three years in prison by the court.

"When the prosecutor gave us a mandatory report, he particularly emphasized the importance of medical staff fulfilling their mandatory reporting obligations in time, thus reducing the occurrence of re-infringement. Our hospital conscientiously implements the mandatory reporting system and incorporates it into the year-end assessment project of medical staff to jointly protect the healthy growth of minors. " The president of the hospital told the reporter.

"Since June 2022, we have concentrated on preaching the systems of compulsory reporting, prohibition of employment, and on-the-job inquiry to key groups such as front-line teachers and medical staff in Luohe Comprehensive Protection Center for Minors, and received a total of 7 clues about suspected cases of infringement on minors, including 2 criminal cases. The role of promoting and expanding the source of supervision by the rule of law is becoming prominent." Yuan Dong, deputy procurator-general of Luohe City Procuratorate, said.

The rule of law propaganda is not only an effective way to expand the source of supervision cases, but also an important part of minors’ procuratorial work and a keen antenna to participate in social governance. It is reported that Luohe City Procuratorate, in response to the clues about campus surrounding safety and school bullying found and collected in the popularization of law, actively cooperated with education, public security, market supervision and other departments to comprehensively manage the campus surrounding environment through discussion and consultation, procuratorial suggestions, and urging special actions, so as to eliminate all kinds of risks infringing on the legitimate rights and interests of minors in time. Since 2022, Luohe City Procuratorate has issued 12 procuratorial suggestions on the protection of minors according to law, promoted functional departments to carry out special rectification activities 14 times, inspected 428 merchants, ordered 30 businesses to suspend business for rectification, and investigated 9 illegal entertainment venues.

"Minors who commit crimes are the key targets of rule of law education." Yuan Dong said that since 2022, the procuratorial organs in Luohe City have focused on the juvenile delinquents, a special group of rule of law education, and paid attention to giving full play to the important role of targeted rule of law education in helping and saving juvenile delinquents, combining rule of law education with procuratorial admonition, behavior development and help and save, helping 55 juvenile delinquents to turn over a new leaf and reintegrate into society.

Optimize the mode of "handling cases+education"

"Children, please follow me to start this journey of the rule of law in the Winter Olympics and see what problems’ Jian Xiaowei’ encountered in the Winter Olympics and how to use legal weapons to protect himself." On the day of Children’s Day in 2023, more than 20,000 students from Luohe participated in an online live broadcast of the rule of law propaganda. Wang Hao, the prosecutor of the unchecked department of Luohe City Procuratorate, became the "anchor" and interpreted relevant legal knowledge from three aspects: rules and laws, cybercrime and campus violence. The number of praises in the live broadcast was as high as 500,000 times.

Luohe City Procuratorate adheres to the concept that "case handlers can be better lecturers", selects 81 procuratorial police officers with excellent political skills and professional skills in the city’s procuratorial organs to set up a professional propaganda team, and adjusts the content, methods and objects of propaganda at any time according to the changes in the characteristics of crimes involving minors, and promotes the deep integration of case interpretation and campus law popularization. At the same time, the hospital actively absorbs social propaganda talents, such as educators and children’s social workers, and changes "prosecutors speak for themselves" into "everyone speaks together", forming a big pattern of legal education for minors with distinct themes and their respective strengths; Actively unite the Youth League Committee, women’s federations, education, civil affairs and other units, and efficiently integrate Luohe City’s comprehensive protection center for minors, family education guidance stations, youth homes, and practice bases for rule of law education in primary and secondary schools, so as to achieve multi-field cooperation and one-stop service.

According to reports, since February 2023, Luohe City Procuratorate and relevant departments have carried out 13 sessions of "Youth Shaying and Law Walking" rule of law summer camp activities and "Candy Mom" parenting classes and educational lectures, bringing children of migrant workers, left-behind children in rural areas, parents, etc. into the scope of rule of law education, and including mental health education. At the same time, for some minors involved with outstanding psychological problems, The Communist Youth League Committee, educational and professional psychological institutions have carried out collective psychological counseling for 6 times and case intervention for 33 times, striving to achieve pre-prevention, timely intervention and timely punishment, and integrating standardized case handling, accurate publicity and diversified protection.

"The procuratorate of Luohe City will continue to focus on brand creation, optimize the mode of" case handling+education ",comprehensively strengthen the judicial protection of minors, crime prevention, rule of law education, etc., and sound the small number of comprehensive judicial protection for minors, making this" work with temperature "more practical and better, and supporting a blue sky of rule of law for the healthy growth of minors." Du Yongzhao, Party Secretary and Procurator-General of Luohe City Procuratorate, said.

(Our reporter Liu Lixin   Correspondent Huang Xindi)

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It is the right way for science and technology to benefit mankind.

  Authors: Li Yongsheng, a special researcher at Socialism with Chinese characteristics Research Center for Theoretical System in Shaanxi Province and a professor at Marxism College of Xi ‘an Jiaotong University.

  How can science and technology develop when the world is facing unprecedented changes and new challenges in economic globalization? On November 10th, the Supreme Leader of president sent a congratulatory letter to the opening of the first session of the Boao Forum for Asia International Forum on Science, Technology and Innovation, pointing out that in today’s world, a new round of scientific and technological revolution and industrial transformation is in the ascendant, which has brought profound changes to human development and provided a new path for solving and coping with global development problems and challenges. Science and technology should benefit all mankind. This profoundly clarifies the essence, purpose and value of science and technology, and points out the direction and provides follow-up for promoting scientific and technological progress and development.

  The initial intention of science and technology is to benefit mankind.The development of science and technology has profoundly changed the fate of mankind and reconstructed social life. In today’s era of rapid development of science and technology, the importance of science and technology is more prominent. Tracing back to the history of scientific and technological development, it is not difficult to find that the initial intention of scientific and technological research is to explore the unknown, pursue the truth and benefit mankind. Newton said: "The sea of truth, let all the undiscovered things lie before my eyes and let me explore." Einstein said: "All I have to do is to serve truth and justice with my meager strength, even if I don’t like it." Bacon said: "The real and legitimate goal of science is nothing more than this: to give new discoveries and new strength to human life." Edison said: "My philosophy of life is work. I want to reveal the mystery of nature and benefit mankind." The wise words of these scientists and technical invention experts brilliantly tell the essence, purpose and value of scientific and technological research from different aspects, that is, to benefit mankind, which runs through the development of science and technology, becomes a strong background for the development of science and technology, and supports and promotes the progress and development of science and technology.

  Only by benefiting mankind can science and technology keep its vitality forever.Science and technology is a social activity loaded with value, and it is not and cannot remain value neutral. Science and technology not only have the function of seeking truth, but also have the function of seeking goodness and beauty. People study science and develop technology for the purpose of improving life, creating a better world, enhancing human well-being and promoting social development. Reflecting on the course of the development of science and technology, those technologies that safeguard human survival, promote human well-being and create a better life often have strong vitality and development vitality, such as information technology, big data, artificial intelligence, life science, new materials, new energy technology, space technology, marine technology, etc., as well as the hybrid rice technology engaged by Chinese scientist Yuan Longping and the science and technology of treating malaria with traditional Chinese medicine engaged by Tu Youyou, which have brought many conveniences and benefits to human life, so they have strong vitality and vitality. On the contrary, those science and technology that are harmful to human dignity, rights and morality and endanger human life, health and survival and development are often despised by human beings and have no future. For example, the technology of human cloning, the technology of making nuclear weapons, and the artificial intelligence technology of making killing machines. Because these science and technology violate human morality, laws and ethics and challenge human rights, dignity and value, they have no market, no development soil and growth conditions, and it is difficult to sustain and achieve sustainable development. Human needs are the fundamental driving force for the development of science and technology, as Engels said: "Once there is a technological need in society, this need will push science forward more than ten universities."Among all kinds of human needs, the pursuit of truth, goodness and beauty is the deepest, most lasting, noblest and most meaningful need. Science and technology that tends to truth, goodness and beauty and benefits mankind will inevitably last forever, keep its vitality forever, and play its own value to the greatest extent.

  Science and technology benefit mankind and need value navigation and social care.The essence and initial intention of science and technology is to benefit mankind and promote social development. The purpose of scientific and technological development is to care for, care for and promote human beings and promote their free and all-round development. However, in modern times, driven by the interests of capital chasing profits, science and technology have made great strides, resulting in environmental pollution, ecological destruction, accelerated species extinction, and various new types of germs constantly appearing, creating chaos such as nuclear weapons, nuclear leakage and pollution, and global warming, which directly threatened human survival and development. On the one hand, it shows that the development of science and technology is increasingly deviating from its essence and initial intention, which urgently needs human vigilance. On the other hand, it shows that science and technology will not automatically improve and benefit mankind. The healthy and sustainable development of science and technology needs value navigation and social care.

  Science and technology have instrumental rationality and value rationality, which are dialectical unity. Instrumental rationality solves the problem of means and efficiency, that is, metaphysical problems; Value rationality solves the problem of purpose and meaning, that is, metaphysical problems. Among them, value rationality is more important, it is an organic part of scientific and technological rationality, it is related to the future and destiny of scientific and technological development, and it is the soul and commander of scientific and technological development. If we don’t solve the value rationality of science and technology, that is, the direction of scientific and technological innovation, the development of science and technology will lose its direction, lose itself and go astray, which will eventually affect its development. It can be seen that the development of science and technology is inseparable from the rational navigation of value. The "four orientations" put forward by the Chairman of the Supreme Leader, that is, persisting in facing the world’s scientific and technological frontier, facing the main battlefield of the economy, facing the country’s major needs, and facing people’s lives and health, are the value rationality that guides the development of science and technology, that is, the value navigation that promotes science and technology to benefit mankind, and lights up the way forward for the development of science and technology.

  The cause of science and technology is not an isolated system, but a subsystem of the social system, which is restricted and influenced by many factors such as politics, economy, morality, law and culture. Therefore, in the complex environment of social differentiation, cultural diversity, different interests and diverse values, we must start from four aspects: system, policy, ethics and cultural environment to protect the initial intention of science and technology, care for the cause of science and technology and guide the development of science and technology from goodness to beauty. From the institutional level, we should integrate the scientific spirit of seeking truth, being pragmatic, rigorous and rational, and the scientific and technological values of caring for human destiny and benefiting mankind into the design of the scientific and technological system, constantly optimize the scientific and technological system, form a compulsory scientific and technological management system and social laws and regulations, restrain, guide and integrate scientific and technological behavior with institutional norms, guide scientific and technological workers to consciously practice their initial intentions in scientific and technological work, and guide scientific and technological behavior into the correct development track. From the policy level, it is necessary to establish a complete set of scientific and technological policy system that embodies the spirit and belief of science and technology, and form an effective operating mechanism to encourage scientific and technological workers to adhere to the belief of exploring truth and being brave in innovation, and to uphold the initial intention and perseverance of benefiting mankind through science and technology. Punish violations of scientific and technological norms, increase the social cost of violators, form a clear policy orientation of punishing evil and promoting good, make scientific and technological innovation follow strict norms, effectively correct scientific and technological misconduct, and ensure its orderly development and full of vitality.

  Protecting the cause of science and technology depends on both heteronomy and self-discipline. Einstein said that science without conscience is the destruction of the soul, and scientists without social responsibility are moral decay and human sorrow. To this end, it is necessary to strengthen the construction of scientific and technological ethics. Establish and improve the governance system of scientific and technological ethics, improve the academic research mechanism of scientific and technological ethics governance, improve the supervision system of scientific and technological ethics, establish the self-discipline mechanism of scientific and technological personnel, form a scientific, standardized, effective and scientific and technological ethics system, strengthen the moral obligation and social responsibility of scientific and technological workers, and urge them to stress morality, style, ethics and self-cultivation, build a strong spiritual defense line of scientific and technological moral conscience, enhance self-discipline awareness and stick to the moral bottom line.

  Protecting the development of science and technology cannot be separated from the nourishment of profound culture. Scientific culture is a deep soil that nourishes and irrigates the desire for exploration, curiosity, creativity, imagination and sense of responsibility. Vigorously develop science and culture, use science and culture to cultivate the initial heart and sharpen the mission, so that it is engraved in the souls of scientific and technological workers, melted into the blood, internalized in the heart and externalized in the line, so that science and technology can return to the duty of seeking truth and being pragmatic, pursuing goodness and beauty, creating a clean and upright scientific and technological environment, dispelling spiritual smog, resisting all kinds of temptations, stabilizing the rudder of scientific and technological behavior, and bringing more gospel to people.

  The road to simplicity, people-oriented science and technology, guarding the initial intention of scientific and technological work, caring for the development of scientific and technological undertakings, carrying out international scientific research and cooperation, and making scientific and technological innovation better benefit mankind are the right path for the development of scientific and technological undertakings.

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In the second half of the year, China’s foreign trade growth has a good foundation and confidence to achieve positive growth.

CCTV News:At the policy briefing on September 27th, in view of the fact that the growth rate of China’s foreign trade declined in August and some enterprises reported that foreign trade orders were also declining, Wang Shouwen, the international trade negotiator and vice minister of the Ministry of Commerce, said that the current foreign trade development is indeed facing some new uncertainties, but foreign trade is still confident to achieve positive growth in the second half of the year.

Wang Shouwen, International Trade Negotiator and Vice Minister of the Ministry of Commerce:Some time ago, many foreign importers bought a lot of goods, forming a high level of inventory. Now it is necessary to digest the inventory, which will restrict the release of new orders, and the demand for "home economy" caused by the epidemic is also declining.

In order to promote the steady growth of foreign trade, this year, China has introduced a series of policies and measures to stabilize the economy and foreign trade. At the same time, China’s foreign trade has a good foundation. For example, 1— In August, China’s mechanical and electrical products accounted for 56.5% of foreign trade exports, and the competitiveness of high value-added and high-tech products was constantly emerging. 1— In August, China’s automobile exports increased by 57.6%, and solar cell exports increased by 92.6%. In addition, the free trade agreements signed by China and other trading partners are also playing a role. In August, China’s exports to other RCEP member countries increased by 23%, which was 11.2 percentage points higher than the overall foreign trade export growth rate in August.

Wang Shouwen, International Trade Negotiator and Vice Minister of the Ministry of Commerce:Generally speaking, despite the background of slowing or even weakening external demand, we are confident that foreign trade will achieve positive growth in the second half of the year and contribute to the recovery of the national economy through the growth of foreign trade.

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Hunan University accepted the transfer of 17 graduate students from other universities, and the transfer process was accused of black-box operation.

Five graduate students from Jishou University transferred to Hunan University. The Paper reporter Li Yunfang        

        Instead of passing the exam, 17 2013 graduate students entered Hunan University, one of the best universities in Hunan, from six universities.

        According to the latest ranking of "China Alumni Association Network", Hunan University ranks 34th, and all the six universities rank outside the top 100. The last of the six universities is Jishou University, which ranks 309th, but this university also has the largest number of 2013 graduate students transferred to Hunan University, with 5 students.

        She Zuochen, director of the Graduate Department of Jishou University, said that the state stipulates that if there are special difficulties, you can transfer to another school, and the special situation of five students must be considered, "people-oriented".

        The school of Hunan University also explained that the transfer procedures of 17 graduate students were compliant and there were no problems.

        However, the transfer from ordinary universities to local famous schools and 17 graduate students at once, and the details of the transfer were not announced, which still caused controversy.

        According to the data provided by the Hunan Provincial Department of Education, there are only 122 graduate students transferred from all universities in Hunan Province in the past decade.

        Hunan University also realized that it was inappropriate, and made a new regulation after accepting 17 graduate students to transfer to another school, and will no longer accept the transfer applications of non-"985" university graduate students in the future.

Enter a prestigious school through transfer.

        A netizen broke the news on the Internet that in 2014, Hunan University accepted 17 2013 graduate students from Jishou University, Hunan Agricultural University and other schools for transfer.

        He said that these students did not go to the retest line of Hunan University in 2013, first entered non-key universities with low scores, then entered Hunan University in the name of further study, and then transferred their student status to Hunan University six months later to complete the whole process of phoenix nirvana.

        The above-mentioned netizens questioned whether this situation is in line with state regulations and whether it is fair, and called on the Commission for Discipline Inspection to intervene.

        The survey in The Paper confirmed that 17 graduate students did transfer from six universities in Hunan to Hunan University in early 2014. Among the 17 people, at least half of the students paid tuition fees to "study" at Hunan University before transferring to another school, and obtained credits. Its path is quite close to the description of netizens.

        The Paper also found that among the 17 graduate students, some were admitted to the original university, but they did not study there.

        For example, Yang, a graduate student in 2013, transferred from the business administration major of Central South University of Forestry and Technology to the business administration major of Hunan University. However, a 2013 graduate student majoring in business administration at Central South University of Forestry and Technology said that Yang’s name was on the roster at the time of reporting, but he had never seen Yang in his class.

        The Paper contacted some graduate students who transferred to Hunan University, but they all refused the interview on the grounds of personal information and privacy.

        The school of Hunan University responded that the transfer of 17 graduate students was carried out in accordance with national regulations and school procedures, and there was no problem.

        As for the problem that some graduate students "pursue advanced studies" in Hunan University before transferring to another school, the school of Hunan University said that this is a case of mutual recognition of credits, that is, in order to share high-quality educational resources, each school allows students to take courses in the other school, and the school agrees with these credits.

        Regardless of whether the procedures are in compliance, these 17 students did achieve a big leap in the school level through transfer.

        According to the ranking of Chinese universities in 2015 selected by "China Alumni Association Network", the six universities where 17 graduate students were originally located were ranked outside the top 100, and Jishou University ranked 309th, far worse than Hunan University ranked 34th.

        As far as the scores of postgraduate entrance examination are concerned, in 2013, the scores of literature postgraduates independently designated by Hunan University were 370, while the scores of literature postgraduates in six universities were unified "national line", with 350 for A-type candidates and 340 for B-type candidates (A and B are divided according to regions). The scores of literature postgraduate entrance examination in these six schools are 30-40 points different from those in Hunan University.

        A graduate student in a famous university told The Paper that there are two specialized courses in the postgraduate examination independently proposed by universities, and the specialized courses in Hunan University are definitely much more difficult than those in six universities, so the actual gap is even greater than the difference in scores.

        In addition, some graduate students were able to return to Changsha, the provincial capital, from Xiangtan and Jishou through transfer.  

A winding path outside the exam

        Every year, millions of students sprint for the postgraduate entrance examination, and eventually more than half a million students will be admitted to the corresponding schools according to their respective achievements.

        However, after the unified postgraduate examination and admission are settled, there is still a winding path for the admitted graduate students to choose another school-transfer.

        The winding path outside this exam is a "hole" left by the "Regulations on the Management of Students in Ordinary Colleges and Universities" issued by Order No.21 of the Ministry of Education.

        In 2005, the Ministry of Education promulgated and implemented the "Regulations on the Management of Students in Colleges and Universities", which clearly stated that students should generally complete their studies in the admitted schools. If you are sick or have special difficulties and can’t continue studying in our school, you can apply for transfer.

        However, there are four situations that clearly prohibit transfer: those who have been enrolled for less than one semester; When enrolling students, it is determined to be oriented and entrusted training; Should drop out of school; Other without justifiable reasons.

        The "Regulations on the Management of Students in Ordinary Colleges and Universities" also clarifies the procedures for students to transfer to other schools: with the consent of the two schools, the transfer school can report to the local provincial education administrative department to confirm that the transfer reason is justified and can go through the transfer procedures; Inter-provincial transfer scholars shall be transferred from the provincial education administrative department of the transfer place to the provincial education administrative department of the transfer place, and go through the transfer procedures after confirming the transfer conditions.

        In 2006, the Hunan Provincial Department of Education issued the Notice on Issues Related to Postgraduates’ Transfer, which added two more cases besides the cases in which the Regulations on the Management of Students in Ordinary Colleges and Universities clearly stated that transfer was not allowed: the graduate students were directly transferred to doctoral students; Does not meet the relevant provisions on graduate transfer from school to school.

        Colleges and universities have also formulated their own "Measures for the Management of Postgraduate Student Status", which has made corresponding provisions on transfer.

        For example, the Measures for the Management of Postgraduates’ Student Status in Hunan University basically follows the regulations of the Ministry of Education on transfer, but adds a new rule that no transfer is allowed "those who have been enrolled for more than one year".

        The Measures for the Administration of Postgraduates’ Student Status in Hunan University also refines the examination and approval procedures for transfer. For example, it is stipulated that graduate students should submit a written application, and only after the tutor agrees to receive and transfer to the college (department) and the examination agrees, can they go through the registration formalities after being examined by the graduate school and approved by the principal in charge, and reported to the provincial education administrative department for approval.

        Tang Zhenming, director of the Propaganda Department of Hunan University Party Committee and spokesperson, explained that after receiving the application, the graduate school will conduct the preliminary examination first, first of all, it must rule out several situations that the Ministry of Education stipulates that it is not allowed to transfer, and then "attend the meeting" after the preliminary examination.

        "Attending the meeting" refers to taking the transfer application to the meeting of Hunan University Admissions Leading Group for discussion and voting. The enrollment leading groups are all school leaders, including the president, the vice president in charge of graduate students, the secretary of the school discipline inspection commission and the head of the graduate school.

        Regarding the "cut" left by the Ministry of Education, a number of university graduate students told The Paper that some people have special circumstances and must be considered.

        Regarding the unfairness caused by the transfer of scholars from ordinary universities to key schools, Vice President Liu of the Graduate School of Central South University of Forestry and Technology said that the transfer needs strict examination, so it will not cause large-scale unfairness.

        Many university officials also emphasized to The Paper that the transfer of graduate students is only a small probability event, and very few graduate students transfer every year.

        Even Hunan University, a "big family" of graduate students in Hunan Province, usually transfers in single digits every year, only in 2014, it soared to 17.

Special difficulties or discretionary factors?

        The Ministry of Education’s Regulations on the Management of Students in Colleges and Universities clearly stipulates that students with "special difficulties" can apply for transfer, but it does not specify what "special difficulties" there are.

        Colleges and universities also follow the concept of "special difficulties" of the Ministry of Education when formulating the regulations on student status management, and have not refined it.

        Therefore, in practice, the "special difficulties" put forward by graduate students applying for transfer can be described in various ways.

        She Zuochen, director of the Graduate Department of Jishou University, did not agree with The Paper to consult the application form of graduate students transferred from this school, saying that the materials had been filed and the administrator had taken a holiday.

        He orally introduced the reasons why Liu and Luo, 2013 graduate students who transferred from this school to Hunan University, transferred to other schools.

        Before Liu was admitted to Jishou University as a graduate student, she had studied in Hunan University for two years with master’s degree equivalent, so the school agreed to transfer her. "We consider for the students, after all, Hunan University is higher than our platform"; Luo is because his father who works in Changsha is in poor health and needs to be taken care of.

        She Zuochen said that many transfer graduate students are the only children of single-parent families, and single parents are still sick. "Don’t think about it."

        Yang and Xu, graduate students in 2013, transferred from Hunan University of Science and Technology to Hunan University.

        Yao Jingcheng, deputy dean of the Graduate School of Hunan University of Science and Technology, said that Yang, who was admitted to the fine arts school, was allergic to oil painting, and the school did not have a design major, so she agreed to transfer to the design art school of Hunan University.

        Since I’m allergic to oil painting, why did I apply for a postgraduate degree in fine arts at Hunan University of Science and Technology? The Paper contacted Yang through Weibo’s private letter, but the other party didn’t reply after asking about transfer and oil painting allergy.

        The Paper found that Yang majored in online media art design at Hunan University.

        As for Xu, Yao Jingcheng said that his application for transfer was due to financial difficulties, but did not specify what kind of financial difficulties it was. He only emphasized that Changsha, the provincial capital, had good economic conditions and many opportunities.

        Three 2013 graduate students from Central South University of Forestry and Technology transferred to Hunan University. The graduate school of this school also rejected The Paper’s request to view the application form for graduate transfer, saying that only specialized departments can view students’ archives.

        A teacher at the Graduate School of Central South University of Forestry and Technology said that most of the reasons for students’ transfer were because students found that their interests were inconsistent with the training priorities of the school after entering the school. "If you can’t learn, you will either drop out of school or transfer."

        Tang Zhenming, a spokesman for Hunan University, also pointed out that students have a strong interest in a certain subject of Hunan University, and Hunan University will accept their application for transfer if they find that the other party has potential. He said that graduate students emphasize professional ability more than undergraduates.

        Another situation is that students are not used to transferring the soil, water, diet and so on from the school.

        Wang, a 2013 graduate student who transferred from Jishou University to Hunan University, told The Paper that the reason for the transfer was physical reasons, and he didn’t adapt to the mountainous climate in Jishou.

        The name of Tang Zhen was once transferred from Hunan University to a Hebei graduate student because he couldn’t get used to the spicy Hunan food.

        In practice, some universities will also consider the children of their own schools for transfer.

        In short, the "special difficulties" stipulated by the Ministry of Education have evolved into various reasons in practice. Dean Liu of Central South University of Forestry and Technology summarized that any special circumstances can be applied, and then the school will review the reasons for the application.

        In a sense, the "special difficulties" stipulated by the Ministry of Education have evolved into various discretionary factors in practice.

The opaque transfer process

        Postgraduates who apply for transfer generally have to go through three levels, transfer out of school, transfer to school and the degree office of the provincial education department. If they transfer from other provinces, they have to go through the examination of the education departments of other provinces.

        The internal audit process of the school is also very complicated, which generally requires the signature and consent of the tutor, the college, the graduate school and the leader of the competent school. For example, Hunan University also needs an enrollment leading group composed of many famous school leaders to hold a meeting to discuss and vote.

        After the transfer and transfer to the school are agreed, they will be reported to the Academic Degree Office of the Provincial Department of Education. A staff member of the degree office said that the office is mainly responsible for confirmation and filing. Mainly confirm three contents: whether the universities on both sides agree, whether they are officially admitted students, and whether they are prohibited from transferring to other schools according to the regulations of the Ministry of Education.

        However, there is no provision for publicity in the complicated and well-designed transfer review procedure.

        The Paper searched the official website of Hunan University, but found no information related to transfer, and the transfer situation of 17 2013 graduate students was completely unknown.

        Not only in Hunan University, but also in official website, six universities where 17 graduate students transferred, there is no information about these students’ transfer.

        The Paper asked many graduate students from Changsha University of Science and Technology, Hunan University of Science and Technology, Central South University of Forestry and Technology, and Jishou University, all of whom said that they had never seen the transfer students notified or publicized by the school.

        Several graduate students from Jishou University told The Paper that either the number of students was reduced during the class reunion, or they didn’t show up for a long time, and then they found out that some students had transferred to another school after asking each other.

        In fact, it seems to be a common unspoken rule for all localities to keep the transfer information of graduate students in colleges and universities secret. Searching the keyword "graduate+transfer" casually on the Internet can’t find any public information about transfer students.

        A staff member of the Academic Degree Office of Hunan Provincial Department of Education said that Decree No.21 of the Ministry of Education did not stipulate publicity.

        A person from a university explained that because schools are not willing to transfer their graduate students, they will not promote it.

        However, this kind of internal audit, which is not open to the public, is easy to make people guess. When it comes to transfer, the biggest magic weapon that many people think of is relationship.

        A graduate student of Changsha University of Science and Technology told The Paper that transfer is "all done behind closed doors, not open and fair" and "mainly depends on your relationship".

        Although Hunan University claimed that the transfer procedures of 17 graduate students were in compliance after self-examination, the number of transfer students in this session almost doubled than before, and it was not publicized, which eventually triggered online questioning.

        In January 2014, the Admissions Leading Group of Hunan University held a meeting and decided to accept 17 2013 graduate students to transfer to Hunan University. "The meeting was very heated." In the same month, the group made a new regulation that it would no longer accept the transfer application of master students from non-"985" universities.

        Tang Zhenming, director of the Propaganda Department of Hunan University Party Committee and spokesperson, said that this is because the school leaders want to ensure the quality of graduate students’ "import".

        However, when accepting 17 graduate students from non-"985" universities, after a heated discussion, I immediately made a decision not to accept graduate students from non-"985" universities in the future, and the behind-the-scenes motivation made people think more.

        Even the official of Hunan University does not deny that this decision has the consideration of excluding people from greeting and taking relationships. "I am too lazy to pay attention to you, just set a threshold of’ 985′."

        As a result of the establishment of the threshold, none of the 2014 graduate students entered Hunan University through transfer.  

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How do multiple factors affect apparel enterprises to go against the trend in a difficult situation?

  Reading tips

  Clothing is a sunrise industry that never ends. However, due to the epidemic situation and other factors, the operating efficiency of enterprises is not optimistic. In the predicament, enterprises seize the opportunity of internet plus’s transformation, and promote the rise of "new national fashion clothing" with flow efficiency. The "going out of the circle" of all kinds of characteristic clothing will promote new scenes, new trends and new vitality of consumption and bring new growth momentum to the industry.

  "Food, clothing, housing and transportation", in the shopping list of ordinary people, "clothing" is the first consumption hotspot, and the clothing industry has also become a hot "track" for many cities to compete for layout and pursuit. Recently, Zhiyi Technology, which was established only four years ago, has completed three rounds of financing of nearly 100 million US dollars.

  According to the data of Tianyancha, up to now, there are more than 21 million garment enterprises in China, including 5.235 million newly registered enterprises in 2021, with a growth rate of 39.2%. However, the operating efficiency is not optimistic. Statistics show that from January to May 2022, the total retail sales of clothing, shoes, hats and knitted textiles in China reached 509.3 billion yuan, down 8.1% year-on-year. In May, the total retail sales of clothing, shoes, hats and textiles in a single month was 95.8 billion yuan, down 16.2% year-on-year.

  "Chongqing School" clothing is speeding up the race.

  Clothing is a sunrise industry that never ends. However, the garment industry generally faces the dilemma of scattered production bases and weak brand appeal. The completion of China Textile Clothing City in Chongqing, which is positioned as a "global fashion runway and a new city of clothing industry", has made more than 3,000 garment manufacturing enterprises end the long-term days of renting factories to fight guerrillas. Together with Shangmeng Chongqing Fashion Industrial Park, it has formed a textile clothing industrial base with an annual output value of nearly 100 billion yuan in Banan District of Chongqing, becoming the largest "Fashion Silicon Valley" in the west, integrating clothing creative research and development, production, logistics and commerce.

  "I have invested 100 million yuan in the textile and garment city, which is only a factory building." Mr. Tong, the well-known chairman of a fur garment in Haining, Zhejiang Province, told reporters on July 3 that compared with the coastal areas, the cost of making garments in Chongqing can be reduced by at least about 10%.

  The data shows that there are 169,000 garment enterprises in Chongqing. "Chongqing people are cheerful and inclusive, and it is easier to accept advanced fashion information. Developing the fashion industry has very good software and hardware. " Liang Mingyu, a master of fashion design and a professor of design at the School of Textile and Apparel, Southwest University, said.

  According to him, there are 16 colleges and universities in Chongqing that offer fashion design majors, and the ranks of young fashion designers are also growing year by year, but a large part of them have flowed to other places. The next step is to consider how to retain people.

  The reporter learned from the Talent Training Center of China Textile Clothing City in Chongqing that in recent years, Chongqing garment enterprises have set aside an annual income of nearly one million yuan to seek talents and attract design and management executives. "With the linkage between enterprises and the government, once the brand highland is formed, talents will flow from coastal areas and other places to Chongqing." Chen Mao, general manager of Chongqing Shangxian Human Resources Consulting Co., Ltd. believes.

  "The textile industry is located in the surrounding districts and counties, and the main city focuses on fashion clothing design, research and development and processing." The person in charge of the Consumer Goods Industry Department of Chongqing Economic and Information Committee said that according to the plan of the municipal government, in the future, Chongqing textile clothing will form five major industrial sectors: the main city (Banan), Fuling, the reservoir area, western Chongqing and southeastern Chongqing. Taking the urban fashion clothing industry chain as the leader, each plate has different characteristics, which drives the dislocation development of the whole industry chain from textile to clothing.

  Tang Juncai, head of Shangmeng Chongqing Fashion Industrial Park, told reporters that the industrial park has been committed to integrating domestic and international clothing industry resources and realizing the global allocation of industry resources. At present, the service platform of "Top Grade in Korea" has attracted hundreds of Korean fabric enterprises and excellent fashion designer brands to join.

  Promoting the Rise of "New National Fashion Clothing" with Flow Efficiency

  At present, the "Z generation" represented by the post-90s and post-00s shows a new trend of paying for interest, face value and fashion in clothing consumption.

  This year’s "618", online clothing stores once again felt a burst of madness, while some old casual clothes were experiencing the wave of "shrinking" offline.

  According to the data report of "2022 Tik Tok 618 Good Things Festival" released by Tik Tok E-commerce, with the help of scene construction and topic marketing, Tik Tok E-commerce clothing industry has expanded marketing channels for merchants through diversified gameplay, achieving a breakthrough in promotion and sales. During the "618" Good Things Festival in Tik Tok, GMV in the clothing, shoes and bags industry broke 2,467 million brand merchants, and GMV broke 2,625 million commodities, and the peak number of new customers in the industry increased by 57% from the previous month.

  The reporter found that from Li Ning, Anta, Xtep and other sports brands to the national trend of art and fashion brought by Jiannong and Mark Huafei, an era that belongs to the light of domestic products of clothing is coming.

  According to the financial reports of relevant companies, in 2021, the annual revenue of domestic sportswear brand Li Ning Sports exceeded 20 billion yuan, an increase of 56.1%; The annual revenue of Anta Sports is nearly 50 billion yuan, an increase of 38.9%; Xtep’s annual revenue is 10.013 billion yuan, which is also the first time that it has exceeded the 10 billion mark.

  As an original brand in China, Beijing Jiannong Sporting Goods Co., Ltd., founded in 1994, has been rooted in the clothing industry for 28 years. According to reports, the company has served more than 400,000 government agencies, enterprises, institutions and social organizations, participated in the service of major events such as the 2008 Beijing Olympic Games, and established service centers in more than 300 cities across the country, including Chongqing.

  "We always take promoting China culture and adhering to original design as the foundation, and regard China’s excellent traditional culture as the guiding culture of enterprises, brands and products." Wang Yuming, the founder and chief designer of Jiannong, told reporters a few days ago that "under the epidemic, enterprises have encountered many difficulties, but with this cultural confidence, I believe the difficulties are temporary." With an eye to the future, Jiannong will continue to deepen the field of clothing group buying, and at present, it is carrying out product innovation, combining with intelligent data management and integrating with Internet systematic tools, and striving to make China culture present in people’s field of vision in a vivid form.

  As one of the representative brands of new national fashion, Mark Huafei has always believed in "born for the tide" since its establishment 20 years ago. According to the data of Pinduoduo, among the people who buy Mark Huafei, the post-90s generation accounts for more than 48%, mainly in first-and second-tier cities.

  "Responding to consumer demand with the personality pursuit of integrated culture and catching up with the market rhythm with a broad and efficient e-commerce platform are the only secrets to win the game." Chen Yun, general manager of Mark Huafei’s e-commerce, said that the company’s co-branded clothing with the images of the myth of mountains and seas, China’s auspicious beast and sheep statue, and "timely rain" Song Jiang as the main elements has been sought after by young consumers.

  "The tuyere has been changing, but the market will always lack quality suppliers." Zhang Tianxiang, deputy general manager of Sijiqing Network Company, said in an interview that if you are bent on the R&D and production of offline products, there will naturally be high-quality online channels and Taobao shops who will look for them to place orders, brand and get goods.

  Characteristic clothing may promote the revival of the industry.

  At present, the overall operation of China’s clothing retail industry is steady and slowing down, and it has entered an important period of accelerating the transformation and upgrading of industrial structure. Grasping the transformation opportunity of "internet plus" will bring new growth impetus to the industry. At present, China’s clothing retail industry market has good prospects mainly in sportswear, children’s wear market, high-end women’s wear market and elderly clothing market.

  Zhang Tianxiang told reporters that the Sijiqing clothing market, with women’s wear accounting for more than 90%, has become the rising place of Hangzhou clothing industry. Nowadays, under the "transportation" and gestation of the Four Seasons, the women’s wear industry in Hangzhou is rapidly "out of the circle".

  Wang Weiwei, managing partner of Huaying Capital, pointed out that there are no small opportunities for investment in specific groups and scenes, such as the modern design of traditional cheongsam and the recent hot outdoor brands.

  Forward-looking Industry Research Institute’s "Analysis Report on Market Prospect and Investment Strategy Planning of China Clothing Retail Industry from 2018 to 2023" shows that with the full opening of the birth policy, China’s children’s wear market will maintain a relatively fast growth rate, and it is estimated that by 2023, the children’s wear market will reach 282 billion yuan, with a compound annual growth rate of 10%. In the future, with the economic development and the rapid rise of second, third and fourth tier cities, a broader potential market for high-end women’s wear will be developed, and the market potential of high-end women’s wear is huge.

  "China has become the country with the largest number of elderly people in the world. It is estimated that by 2023, the number of elderly people will further increase, and the elderly clothing market as a blue ocean needs to be further developed. " Mo Yuanming, a researcher at the chongqing technology and business university Chengdu-Chongqing Shuangcheng Economic Circle Collaborative Development Center and the founder of Yuanzhi Smart Library, said that the "going out of the circle" of all kinds of characteristic clothing will promote new consumption scenes, new trends and new vitality, and help to form a newer and more fashionable urban "fireworks atmosphere".

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Grasp the historical initiative in scientific practice

  [Reading Classics Theory]

  Author: Qin Long (Professor, School of Marxism, Tianjin Normal University, researcher, Socialism with Chinese characteristics Theory System Research Center, Tianjin)

  "Further grasping the law and general trend of historical development and always grasping the historical initiative of the development of the cause of the party and the state" is a clear requirement put forward by the General Secretary of the Supreme Leader for the whole party. Historical initiative is the subjective temperament and action character displayed by human beings in understanding the historical process, following the historical laws, conforming to the historical trend and taking the initiative to undertake the mission. It is also the practical consciousness of human beings "pursuing their own goals". Based on the social reality, Marxist classic writers made a series of explanations on how to grasp the historical initiative in the practice of proletarian revolution and human liberation. Reviewing and reviewing relevant expositions and their practical application is instructive for us to grasp the historical initiative, overcome difficulties and obstacles and win great victories in the new era.

  Explain historical development with scientific practice view

  Tracing back to the development of the history of thought, before Marx’s view of history came into being, the development of human history was often regarded as pre-existing, presupposed, or understood as the product of God and religion, or as the result of natural laws. For example, Hegel’s principle of "entity is subject" holds that the self-activity of absolute spirit is the entity of subject, which governs practice and the development of human society, and history is the product of absolute spirit; Feuerbach confused the difference between natural existence and social existence, and fell into idealism when he explained history a priori with idealized "quasi-essence". In short, from the perspective of traditional philosophy, although historical existence is endowed with dynamics, the ultimate form of historical development is still closed and determined. In this case, history has no "initiative".

  Marx surpassed the previous historical thinking and speculative thinking, thoroughly criticized Feuerbach and all the old philosophies, and put forward that "all social life is practical in essence", taking practice as the premise and foundation for people to understand the world. Marx insisted that "practice should be explained not from ideas, but from material practice", because "all mysterious things that lead theory to mysticism can be reasonably solved in human practice and understanding of this practice". To understand history through "practice", on the one hand, history is no longer defined as the product of some abstract concept, but the open space and possible process constructed by human beings in practice. All history in the real world is generated and developed through practical activities, and history is dynamic and has differences. On the other hand, from the perspective of practice, the relationship between matter and spirit, thinking and existence is in a non-identity state in activities. In Marx’s view, it is this non-identity that constitutes the driving force of social development. In other words, historical development shows the initiative in breaking the identity in this formal logical sense. As Comrade Mao Zedong pointed out, "Thought and so on are subjective things, and doing or acting is subjective to objective things, which are all special initiatives of human beings. This kind of initiative is called ‘ Conscious initiative ’”。 Thus, taking practice as the logical fulcrum, the veil of historical development was unveiled. History is human’s practical activities, and it is the development of human’s practical activities in time and space sequence. Human social practice with the masses as the main body promotes the pace of historical progress and determines the stage and level of historical development.

  History is the activity of people who pursue their own goals.

  Marx pointed out: "History is just the activities of people who pursue their own goals." Historical materialism always examines the historical initiative in the dimension of human liberation and freedom realization. The communist party Declaration scientifically explains the evolution process of human social forms, reveals the historical trend that "the destruction of the bourgeoisie and the victory of the proletariat are equally inevitable", and that the change of human social forms is objective and inevitable regardless of human will. Through a profound analysis of the development prospect of human liberation and the historical mission of the proletariat, Marx expounded the dialectical unity of proletarian liberation and human liberation and put forward a scientific plan to eliminate capital rule. It is under the guidance of these scientific theories that the proletariat grasped the historical initiative and began the revolutionary practice of overthrowing capitalist rule and liberating all mankind.

  Marx has a keen insight into the key position and role of the proletariat and the working people in social development and revolutionary struggle. In the French Civil War, he pointed out that the working class is "the only class with social initiative" and enthusiastically eulogized the "historical initiative spirit" of "Parisians soaring to the sky". As Lenin pointed out, "what Marx attaches most importance to is the historical initiative of the masses." In Marx’s view, "historical activities are the cause of the masses, and with the deepening of historical activities, it is bound to expand the ranks of the masses" and "the liberation of workers should be the business of the working class itself", and further pointed out that in the struggle against the joint forces of the proletariat, the proletariat "can only act as a class if it organizes itself into a political party different from all the old political parties established by the proletariat". Communist party, composed of advanced proletarian elements, "has no interests different from those of the whole proletariat", has a strong historical initiative, is "the most determined and always promoting part of the workers’ political parties in various countries", and at the same time "understands the conditions, process and general results of the proletarian movement", which can represent the future of the whole movement.With the rise and expansion of modern industry, the proletariat gradually got rid of geographical limitations, created huge productivity and endless wealth, and stood on the world historical stage with a strong sense of historical subject and historical initiative. The scientific practice of the proletariat fully proves that only the revolutionary forces that respect historical laws, conform to the general trend of historical development and take scientific theory as the guidance can fully grasp the historical initiative in revolutionary practice.

  Grasp the historical initiative in the great practice of the new era

  The General Secretary of the Supreme Leader pointed out: "As long as we grasp the law of historical development and the general trend, seize the opportunity of historical change, follow the trend and work hard, we will be able to make better progress." At present, China is in the best development period since modern times, and the great rejuvenation of the Chinese nation has entered an irreversible historical process. In the great practice of the new era, we should firmly grasp the historical initiative and take a good road to build a socialist modern country in an all-round way.

  Take the initiative to attack in front of opportunities, without hesitation or wait and see. Since the 18th National Congress of the Communist Party of China, we have promoted a series of transformative practices, achieved a series of breakthrough progress, and achieved a series of landmark achievements, providing a more perfect institutional guarantee, a more solid material foundation, and a more active spiritual strength for Chinese modernization. We should strengthen our awareness of opportunities, be good at grasping the direction, making good use of opportunities, creating conditions and controlling the overall situation from the development and changes of the situation and conditions, guide the people to scientifically understand and grasp the laws of economic and social development and modernization, and formulate a creative planning and policy system that reflects the times, grasps the regularity and leads the future in taking advantage of the trend.

  Face up to difficulties, don’t shirk and don’t escape. The road to national rejuvenation is not smooth, and we must be ready to deal with all kinds of difficulties and challenges at any time. "History always advances, and history never waits for all hesitators, spectators, slackers and weak people." No matter what storms we encounter, we can’t stop moving forward. In the new era and new journey, we should deeply understand the new features and new requirements brought about by the major contradictions and changes in our society, and the new contradictions and new problems brought about by the complicated domestic and international environment. With the heroic spirit of "the more difficult it is, the more forward it is", we should fully mobilize the enthusiasm, initiative and creativity of the people, cope with major challenges and overcome major obstacles, and maintain the strategic initiative in accurately recognizing changes, scientifically adapting to changes and actively seeking changes.

  Respond positively to risks without flinching or dodging. In the face of the complicated international situation, complex and sensitive surrounding environment and arduous tasks of reform, development and stability, we must not only guard against risks first, but also have ingenious ways to deal with and resolve risk challenges; It is necessary not only to fight a well-prepared battle to prevent and resist risks, but also to fight a strategic active battle to turn crises into opportunities. We should always keep a sense of being prepared for danger in times of peace, be cautious in treading on thin ice, be sensitive to Ye Zhiqiu, always observe the general trend and always think about the overall situation, consider and plan in advance the risks and problems that may be encountered, make strategic changes and strategic leaps in a timely manner, and firmly grasp the initiative in development.

  The General Secretary of the Supreme Leader pointed out: "Whether a country can be rich and strong, whether a nation can be revitalized, the most important thing is to see whether this country and this nation can conform to the trend of the times and grasp the initiative of historical progress." On the new journey, we must adhere to the guidance of the Supreme Leader’s Socialism with Chinese characteristics Thought in the new era, base ourselves on scientific practice, respect the people’s dominant position, accurately grasp the regularity and interaction of the two overall situations, gain insight into the historical trend, enhance the historical initiative, and constantly write more splendid chapters of Socialism with Chinese characteristics in the new era.

  (This article is the key project of the special major research project of ideological and political theory teachers in colleges and universities in 2022, "Strengthening ‘ Four self-confidences ’ Research on the Mining and Application of Chinese Excellent Traditional Cultural Resources in Education "[〔22JDSZZ02〕] Stage Achievements)

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Foreign trade "new three" continues to be hot, industrial upgrading tamps down the cornerstone of development

  Since the beginning of this year, with the combination of macro-control policies, the main economic indicators have stabilized and rebounded obviously. During this period, relying on the strong industrial chain supply chain production advantages and super-large-scale market advantages, some emerging fields have made eye-catching development performance. From now on, People’s Daily launched a series of reports on "Where did the economic highlights come from?".

Domestic new energy vehicles are loaded and exported at Nansha automobile port. Photo courtesy of Guangzhou Port Group

  Domestic new energy vehicles are loaded and exported at Nansha automobile port. Photo courtesy of Guangzhou Port Group

  In November, in Nansha Seaport, Guangzhou, with dense routes, brand-new domestic new energy vehicles were driven to the loading and unloading area at the front of the terminal in an orderly manner and sent to overseas markets such as Southeast Asia by foreign trade ro-ro ships. After packing in Dongguan, batches of lithium battery packs set off on the whistle of the China-Europe train and rushed to the "Belt and Road" country … …

  Since the beginning of this year, the export of "new three" products such as electric manned vehicles, lithium-ion batteries and solar cells has maintained a rapid growth momentum. In the first three quarters, the total export of "new three samples" increased by 41.7% year-on-year, accounting for 1.3 percentage points of China’s export. At the 134th Canton Fair held not long ago, the scale of new energy exhibition area increased by 172% compared with the previous one, which further helped the export of "new three products" and promoted the development of emerging advantageous industries.

  Foreign trade is an important window to observe a country’s economy. From "Made in China" to "Made in China", and from "old three kinds" to "new three kinds", the upgrading trend of China’s foreign trade export products is becoming more and more obvious, which is not only the embodiment of the continuous optimization of foreign trade structure, but also the true portrayal of new kinetic energy promoting high-quality economic development.

  Why have the "new three kinds" of foreign trade become hot in recent two years? Experts said that this is not an accident, but the harvest of China’s comprehensive layout and deep cultivation in related industries for many years.

  Xu Haidong, deputy chief engineer of China Automobile Industry Association, pointed out that in recent years, China has led the green and low-carbon transformation, applied the latest iterative technology and continuously improved its research and development capabilities. The "new three samples" export has produced excellent report cards, which fully reflects the technological innovation advantages brought by China’s increasingly complete industrial chain.

  A complete industrial chain supply chain system is a solid cornerstone of industrial development.

  In the Yangtze River Delta region of China, through the coordinated development of industrial clusters, a new energy automobile factory can solve the supply of necessary supporting parts within four hours’ drive, forming a "four-hour industrial circle" that embodies the characteristics of modern industrial system. At present, China’s green and low-carbon transportation system has been accelerated, and more than half of the world’s new energy vehicles are driving in China, ranking first in the world in production and sales for eight consecutive years. The continuous and complete industrial chain has provided a solid and powerful support for the new energy automobile industry to maintain its leading development momentum.

  In the view of Liu Wenqiang, Party Secretary and Vice President of China Electronic Information Industry Development Research Institute, the main supporting factor behind the high growth of "new three kinds" exports is the industrial competitiveness precipitated by China’s manufacturing industry for many years. "China’s manufacturing system is constantly improving, technological innovation is constantly improving, manufacturing capacity is outstanding, and the industrial chain is complete and resilient, which all have certain leading advantages in the world." Liu Wenqiang said.

  Taking the photovoltaic industry as an example, in recent years, China’s photovoltaic industry has formed the most complete industrial supporting environment and supply chain system in the world, from upstream silicon material technology research and development, midstream component manufacturing and downstream power station development, with a total industrial output value exceeding 1.2 trillion yuan.

  In the first three quarters of this year, the photovoltaic industry continued to achieve rapid development. From the manufacturing side, the output of polysilicon, silicon wafers, battery chips, components and other major manufacturing links increased by over 70% year-on-year; From the perspective of import and export, the export volume of silicon wafers, batteries and components increased by 88.3%, 74.3% and 33% respectively.

  The leading momentum is hard-won. Experts pointed out that we still have to make a lot of "hard work" to maintain the vitality and advantages of the new kinetic energy of the industry for a long time.

  On September 5, the Ministry of Industry and Information Technology put forward various measures to promote China’s industrial enterprises to adhere to innovation and promote system upgrading at the "press conference on the theme of steady industrial growth" — —

  Strengthen quality brand building, promote supply-side innovation, and create demand with high-quality supply; Strengthen the overall planning of the "14 th Five-Year Plan" in the field of industry and information technology, and promote industrial investment funds to increase investment in manufacturing; Continue to do a good job in China’s industrial transfer and development docking activities, and promote qualified projects to be put into production as soon as possible to achieve results; Guide enterprises to expand the international market according to local conditions, and further tap the export potential while consolidating the export of key industrial products.

  "I believe that with the continuous implementation of the above-mentioned series of effective measures, ‘ Three new samples ’ The new kinetic energy of the industry that leads will surely explode with greater development vitality. " Xu Haidong believes that the export growth of the "new three products" is expected to continue in the future: from the outside, the global attention to new energy and green low-carbon development is gradually increasing, and the international market demand for "new three products" is still very strong; Domestically, supported by the advantages of industrial chain and policy environment, the supply of "new three kinds" products still has great advantages on a global scale.

  Liu Wenqiang said that enterprises should persist in innovation and continuously improve their technical content and product quality, so as to actively adapt to the external environment, cope with risk challenges and further release new industrial kinetic energy. On the one hand, it is necessary to strengthen the layout of basic forward-looking technologies and explore new innovation models. Encourage the "chain owner" enterprises in the industrial chain to take the lead, unite upstream and downstream partners, universities and research institutions to build an innovation platform, and focus on tackling common key technical problems; On the other hand, it is necessary to optimize the allocation of resource elements, guide the coordinated development of industrial clusters, coordinate the differentiated and characteristic layout as a whole, and promote the upgrading and efficiency of industries.

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Enterprise’s Character: An Analysis of Ruixun’s Financial Fraud from the Perspective of ESG

  On February 1st, 2020, Muddy Waters Research published an 89-page research report, pointing out that Luckin Coffee (hereinafter referred to as "Ruixing"), a Chinese stock company listed on Nasdaq, was fabricating its financial and operational data, saying that "in the third quarter of 2019 and the fourth quarter of 2019, the daily consumption of goods in each store was exaggerated by at least 69% and 88% respectively". On April 2, Ruixing admitted that the fictitious transaction amount was about 2.2 billion yuan, and then its share price plummeted by 80%, and trading was suspended several times during the session. On April 3rd, China Securities Regulatory Commission issued an announcement strongly condemning the financial fraud of Ruixing, saying that it would strictly follow the relevant arrangements of international securities regulatory cooperation, check the relevant situation according to law, resolutely crack down on securities fraud and effectively protect the rights and interests of investors.


  As the old saying goes, "If you don’t keep your word, you won’t stand". The Ruixing incident has had a very serious negative impact on the international reputation of China enterprises, and some investors even have a natural sense of rejection of China Stock Exchange, indirectly contributing to the phenomenon that "bad money drives out good money" in the market recently, affecting employees, supply chains, customers and other stakeholders. From the perspective of ESG, this paper will analyze the various contents of "Ruixing Incident" in detail, and provide warning and reference for regulators, enterprises and investors.


  First, the background of the "Luckin Coffee" financial fraud incident


  (A) the seriousness and negative impact of the Ruixing incident


  1. The credibility of enterprise data in China was questioned.


  The seriousness of financial information fraud is self-evident. This time, Luckin Coffee directly thundered in the US financial market, crushing the international reputation accumulated by China Stock Exchange in one fell swoop and igniting the trust crisis of China enterprises. In the eyes of more overseas investors, they may not know that Ruixing is a case, nor do they know the industry in which Ruixing is located and the business model adopted, but they will stick to the stereotype that this is a China enterprise and a China enterprise with financial fraud as high as 2.2 billion yuan. So how can we judge whether the data of other China enterprises are equally doubtful?


  Based on the principle of information asymmetry, foreign investors will not have a natural trust in China Stock Exchange. On the contrary, China enterprises have to make great efforts to win the favor of investors bit by bit through long-term stable performance level and good corporate governance mechanism. However, Luckin Coffee unscrupulously fabricated a huge transaction amount of up to 2.2 billion yuan, ignoring the law and discipline, and directly sent an extremely negative signal: the credibility of data is insufficient. From good to good, from evil to collapse. The far-reaching impact of "Ruixun Incident" can never be remedied overnight, and the difficulties of China Stock Exchange will only worsen. Even if high-quality enterprises take out powerful third-party forensic materials to endorse and try to prove the authenticity, integrity and effectiveness of their own data, they still need to face the trust stain of "Ruixun Incident".


  At the same time, among the top ten institutional shareholders of Ruixing, there are many famous investment institutions such as Bank of America, UBS and Melvin Capital Management Company. Among the funds with heavy positions in Luckin Coffee, there are also internationally renowned asset management companies such as American Funds and BlackRock. The occurrence of this "Ruixing incident" will seriously affect the trust of investors in top asset management institutions in China’s corporate data, leading to incalculable consequences.


  2. Directly infringe upon the basic rights and interests of stakeholders.


  First, it will directly infringe on the basic rights and interests of employees and consumers. By December 31, 2019, there were 4,507 directly operated stores in Luckin Coffee with tens of thousands of employees. The follow-up progress of the "Ruixing incident" is not optimistic. If it really involves delisting, insolvency or even bankruptcy liquidation, employees will be forced to bear the risk of unemployment at first, and consumers who have prepaid money (such as recharging) will find it more difficult to recover losses. In addition, on the moral and emotional level, Ruixing directly trampled on the trust of employees and consumers, causing bad social impact.


  Second, it will endanger the basic rights and interests of investors. Wind data shows that by the end of 2019, there were 158 institutional investors holding Luckin Coffee shares, with a total of 460 million shares, accounting for 23.93% of institutional shares. At the same time, as shown in Table 1, as of April 8, 2020, the total market value of Ruixing has shrunk from 66 billion yuan at the end of 2019 to 7.84 billion yuan, a cliff-like decrease of 88.12%; The market value of circulation fell to 3 billion yuan, less than one-third of the end of 2019.


企业的品格:从ESG角度分析瑞幸财务造假事件


  Third, the corresponding supply chain enterprises will be hit hard. Luckin Coffee’s supply chain includes Ruixing Baking (Tianjin) Co., Ltd., which was established in May 2019 with a registered capital of 200 million yuan, Swiss coffee maker Shelley and franca, syrup supplier Fabry, dairy supplier Fonterra, coffee raw bean trader Mitsui Products and baking factory Taiwan Province Yuanyou, and Louis Dafu, one of the four major grain merchants. There are a lot of payables in the transaction between suppliers and Ruixing. Judging from the sales scale and the number of stores in Luckin Coffee, there is a risk that the payment cannot be settled in time and comprehensively. "Ruixing incident" not only affects the construction of good supply chain relations, but also directly brings huge financial risks to suppliers. Once Ruixun’s financial fraud event turns into a debt crisis, it will be difficult for suppliers to directly circulate customized equipment and goods in the market (such as Ruixun’s customized coffee machine and product packaging, etc.), which may involve huge economic losses.


  (B) the basic logic of financial fraud in the Ruixing incident


  1. Ruixun’s information disclosure is seriously distorted, and the financial audit mechanism fails.


  From the second quarter to the fourth quarter of 2019, Ruixing executives and some employees forged transactions worth about 2.2 billion yuan. As of April 8, 2020, according to the quarterly financial information of Ruixun in Wind database, the total operating income of Ruixun in the second and third quarters of 2019 was 910 million yuan and 1.54 billion yuan respectively, and the financial report in the fourth quarter has not been released. The market expects the revenue in the fourth quarter of 2019 to be between 2.1 billion and 2.2 billion yuan. Therefore, the proportion of financial fraud is conservatively estimated to be as high as 48.35%.


  Ruixun’s financial fraud method is still in the investigation stage, but according to the five conclusive evidences and six dangerous signals listed in the "fraud" section of the Muddy Water Report, Ruixun’s financial fraud methods may include, but are not limited to: increasing the pick-up number out of thin air by means of "jumping the number of the pick-up code" and blocking the direct correlation between the pick-up code and the daily order volume, thus increasing the online order volume by 72%; Providing free beverage coupons to existing users to invisibly increase the promotion, while falsely claiming that the proportion of free items continues to decline, and the actual sales price has increased by 9% (accounting for the proportion of listed prices); In the third quarter of 2019, the advertising expenditure was exaggerated by 336 million yuan, and there is reason to suspect that it was used for fraudulent income and forged store profits. Ruixing’s financial information disclosure is seriously distorted, and it is difficult to identify it through standardized audit processes and means. Specifically, Muddy Waters Company used a total of 1,510 employees, including 92 full-time employees and 1,418 part-time employees, to visit 981 stores in Luckin Coffee, collect a total of 25,843 shopping receipts, and shoot 11,260 hours of store videos. The time and economic costs are huge, which can never be completed by the basic financial audit mechanism.


  At present, there is no conclusion as to whether Ernst & Young Huaming Certified Public Accountants, which issued the audit report for Ruixing, should bear the responsibility. However, even if the accounting firm has indeed properly fulfilled its expert obligations, the occurrence of the "Ruixing incident" has revealed the natural shortcomings of financial auditing in the face of human fraud and fraud.


  2. Ruixun’s internal control has failed and there are major defects.


  Luckin Coffee’s 2019 prospectus (Form F-1 of the US Securities and Exchange Commission) shows that the audit results of the consolidated financial statements as of December 31, 2018 show that Rui survived two "major defects" in financial and internal control. According to the definition of the standards formulated by the Accounting Oversight Board (PCAOB) of listed companies in the United States, "material defect" refers to a defect or combination of defects in the internal control of financial reports, and there is the possibility that the material misstatement of annual or interim financial statements has not been reasonably and timely prevented or discovered. Ruixing disclosed that it lacked sufficient accounting and financial reporting personnel, necessary knowledge and experience in applying US GAAP and the rules of the Securities and Exchange Commission (SEC), and financial reporting procedures that met US GAAP and the requirements of the Securities and Exchange Commission (SEC).


  Ruixing is a listed Chinese stock company in the United States, which is bound by the Sarbanes-Oxley Act of 2002. Article 404 clearly requires the management to undertake the responsibility of establishing and maintaining a proper internal control structure, and requires listed companies to provide internal control reports and internal control evaluation reports in their annual reports. At present, Ruixing has not disclosed the 2019 financial report and internal control report, but the latest information still cannot confirm that the effectiveness of its internal control has been convincingly improved.


  3. Ruixun’s "investor protection" system is lacking.


  The way of stock pledge financing is to use the securities held as collateral to obtain loans, without the need for management to sell shares directly. However, when the value of pledged shares falls, the lending institution has the right to ask the borrower to provide more cash or collateral, and may ask for compulsory liquidation when the borrower fails to perform. In the face of financial risks, large-scale stock pledge will cause the stock price of the corresponding securities to plummet, which will harm the remaining investors in the market and form a negative cycle, so it is a key negative danger signal for investors. The research report of Muddy Waters shows that the management of Ruixun has mortgaged nearly 50% of its shares as loan collateral (61 million ADS), accounting for 24% of the total shares of Ruixun, even exceeding the total shares (51 million ADS) placed by Ruixun in May 2019 and January 2020, so investors will face serious financial risks.


  Second, the ESG performance level of Luckin Coffee


  (1) Environment (e)


  Ruixing is a new retail professional coffee operator who mainly sells coffee and related drinks, so its production and business operation objects mainly include the whole process of sales and service of coffee drinks. According to the data of American Professional Coffee Association (SCAA), the water polluted by wastewater in the process of coffee water grinding is 40 times as much as that wasted by urban sewers on average. Ruixing has not released a separate social responsibility report, nor has it disclosed its own treatment and recycling methods of sewage and wastewater on the official website. At the same time, the product packaging of coffee catering service industry is also polluted and wasted. As a new retail coffee operator, Ruixing’s take-away service involves more packaging materials than the average catering service. Even if environmental protection kraft paper packaging bags are used, coffee cups still have problems such as degradation and difficulty in direct recycling. At present, there is no direct evidence that it has been punished by the environmental protection department, but the lack of information about the environmental level of Ruixing makes it impossible to carry out relevant environmental assessment, and the real situation is in doubt.


  (2) society (s)


  One of the most important points in Ruixun’s business model and brand proposition is to change the coffee consumption experience with the new retail model. Therefore, Ruixun believes in standardized processes and operating mechanisms more than paying attention to the practical needs of employees, uniting corporate cohesion and shaping common values. Ruixing does not encourage or advocate the communication between employees and customers, but only provides the online purchase method of ordering. With fully automatic coffee machine, each order must be completed within 2 minutes, and the completion process of each preset program needs to be supervised by a special person in the monitoring center. Any illegal operation and delay in operation time will be reflected in the performance evaluation process linked to salary and counted by the digital management system. At the same time, even a number of stores will be arranged in the same community, and there is a competitive situation. On the whole, Ruixun’s social development is not sustainable, and its employees have no sense of belonging and consumers’ loyalty is low, which is directly reflected in the fact that Ruixun still needs to take great efforts to promote sales.


  (C) Corporate Governance (G)


  In terms of organizational structure, Luckin Coffee and Chairman CAR Inc. are both Lu Zhengyao, and its subsidiary, Hydrogen Dynamics Yiwei, reached a strategic cooperation with Luckin Coffee in all-media integration in 2018, involving significant related party transactions. According to the news of Bloomberg on the evening of April 6, Bronstein, Gewirtz & Grossman, a professional class action service agency, announced that it had filed a class action lawsuit against Ruixing and its senior management on behalf of investors, aiming to demand the defendant to compensate for the alleged violation of the Securities Exchange Act of 1934. At the same time, the fourth paragraph of Article 2 of the new Securities Law, which came into effect on March 1, 2020, clearly requires that "securities issuance and trading activities outside People’s Republic of China (PRC) disrupt the market order in People’s Republic of China (PRC) and damage the legitimate rights and interests of domestic investors, they shall be dealt with and investigated for legal responsibility in accordance with the relevant provisions of this Law", and a serious condemnation announcement will be issued for the Ruixing incident, which will resolutely crack down on fraud. Ruixing’s corporate management is bad, its internal control is seriously flawed, and its information disclosure is seriously distorted. The financial fraud of senior executives has involved criminal responsibility including fraud, and it will directly face the early warning risk of delisting.


  Third, the ESG logic behind the Ruixing incident


  (A) the relevance of ESG and financial performance


  ESG integrates environmental, social and governance factors, which can comprehensively reflect the non-financial performance of enterprises and evaluate the long-term sustainable development ability of enterprises. A large number of domestic and foreign literature studies have shown that ESG is related to company valuation, stock returns, financing costs and other factors related to company quality. Cohen et al. (1997) compared the environmental performance and financial performance of manufacturing companies in the S&P500 index, and found that the environmental performance is positively correlated with the intangible assets value of listed companies. This study shows that good environmental performance can increase the valuation of intangible assets of listed companies. In addition to a single environmental factor, Brammer & Millington(2008) discussed the relationship between corporate social performance (CSP) and corporate financial performance (), and found that in the short term, companies with poor CSP performance have better financial performance; But in the long run, companies with good CSP performance have better financial performance.


  In 2018, the Green Finance International Research Institute of Central University of Finance and Economics published two research results, namely, Research on the Correlation between ESG Performance of Listed Companies in China and Corporate Performance, and Research on the Correlation between ESG Performance of Listed Companies in China and Corporate Default Risk, which is also one of the important achievements of the China-UK Green Finance Working Group. It is found that ESG performance in manufacturing industry is positively correlated with the company’s P/B ratio and P/E ratio, while ESG performance is negatively correlated with stock risk, which is particularly significant in manufacturing industry. In terms of ESG and bond default rate, it is found that the higher the ESG level, the lower the probability of corporate bond default or downgrade, and the higher the ESG level, the higher the corporate bond yield.


  At the same time, some scholars suggest that ESG performance has a negative correlation with the company’s downside risks. Koehler and Hespenheide(2013) believe that ESG problems will lead to corporate crises, and those companies that are clearly prepared to deal with ESG shocks can better mitigate short-term and long-term downside risks. Hoepner et al. (2018) found that ESG problems can benefit shareholders by reducing the company’s downside risks.


  (B) ESG is a key indicator to measure the credit quality of enterprises.


  If the financial report maps the current credit ability of the enterprise, then ESG can represent the long-term credit quality of the enterprise. Behind Ruixing’s financial fraud is the lack of ESG performance, which implies the moral responsibility of enterprises. In the case of frequent financial information distortion and financial report fraud, ESG information, as the key motivation information hidden behind the financial performance of enterprises, can make up for the lack of financial indicators and provide investors with evaluation methods and indicators to further understand the overall situation of the company.


  From the specific indicators, environmental indicators can evaluate the green development, environmental compliance and green degree of the whole life cycle of enterprises, which can comprehensively measure the environmental risk and green sustainable development ability of enterprises; Social indicators evaluate the performance of enterprises in public welfare activities and stakeholder protection, measure the degree of responsibility of enterprises from the perspective of stakeholders, and show the operational ability of enterprises from the side; Governance indicators evaluate the organizational structure, investor relations, information transparency, risk management, etc., and carefully consider the corporate governance capacity and long-term sustainable development capacity.


  Fourth, the reference and enlightenment significance of Ruixing incident


  (1) Regulatory body: Establish and improve the ESG information disclosure and verification system of enterprises.


  Basically, in this Ruixun incident, the regulatory authorities need to speed up the construction of ESG information disclosure system, and gradually establish and improve the corresponding auditing system and supporting mechanism. By requiring and guiding enterprises to disclose ESG information, we can help enterprises improve their credit quality and improve the overall quality of Chinese enterprises. At present, there is still a certain gap between the A-share market and the US stock market in the development of ESG information disclosure, and ESG information disclosure has not been completely enforced, which lacks standardization for the performance of listed companies in non-financial indicators. At the same time, although China’s regulatory authorities have increased the regulatory penalties for listed companies in terms of environment and governance in recent years, overall, the cost of violating laws and regulations of enterprises is still lower than that of the US stock market, and the strong binding nature of enterprises’ supervision needs to be further improved.


  In addition, the regulatory authorities should gradually reduce the regulatory barriers in domestic and foreign markets, strengthen the control and supervision of the quality of China Stock Exchange, and strengthen domestic penalties for overseas violations. The new Securities Law, which came into effect on March 1 this year, clearly states that securities issuance and trading activities outside People’s Republic of China (PRC) disrupt the market order in People’s Republic of China (PRC) and damage the legitimate rights and interests of domestic investors, and shall be dealt with and investigated for legal responsibility in accordance with the relevant provisions of this Law. Regarding the Ruixun incident, the statement of China Securities Regulatory Commission on April 3 also stated that the China Securities Regulatory Commission will check the relevant situation in accordance with the relevant arrangements of international securities regulatory cooperation, resolutely crack down on securities fraud and effectively protect the rights and interests of investors.


  (2) Enterprise: issue an ESG consulting rating report reviewed by a third party.


  From the perspective of enterprises, on the one hand, enterprises need to raise awareness of ESG information disclosure and strengthen their own ESG capacity building. Behind the events such as Ruixing in China Stock Exchange, Kangmei and Kangdexin in A-share, the ESG problem of enterprises has been exposed. Only by solving the bad habits of enterprises from the root and improving their credit quality can we avoid the recurrence of such events. On the other hand, enterprises should issue ESG consulting rating reports reviewed by third parties to enhance the credibility of ESG information disclosure data. Enterprises have the motivation to disclose information that is beneficial to them and avoid information that is unfavorable to them, so it is particularly important to issue a credible third-party review of both financial information and ESG information. At the same time, third-party review is also the second constraint on enterprises besides supervision, which can standardize enterprise behavior to a certain extent and enhance the compliance of enterprise information disclosure.


  (C) investors: pay attention to the quality and sustainability of enterprises and avoid speculative business models.


  Investors should also pay more attention to long-term value investment. The strategic mode of short-term investment is short-term and unsustainable. In order to obtain long-term sustainable returns, investors should pay more attention to the internal quality of enterprises and tap the endogenous value of enterprises. By incorporating ESG into the investment strategy, we can not only avoid environmental risks, moral risks and governance risks of enterprises, but also screen out investment targets with strong anti-risk ability and strong self-management ability when systemic risks occur, so as to alleviate the market impact and obtain higher returns. In addition, if more and more investors incorporate ESG information into their investment decisions, they can also close down enterprises to improve ESG performance, thus promoting the high-quality development of the whole market.


  Author:


  Shi Yichen, deputy dean of the International Institute of Green Finance of Central University of Finance and Economics, and dean of the Yangtze River Delta Green Value Investment Institute.


  Yang Chenhui is a researcher at the International Institute of Green Finance of Central University of Finance and Economics, and a researcher at the Yangtze River Delta Green Value Investment Institute.


  Bao Jie is a researcher at the International Institute of Green Finance of Central University of Finance and Economics, and a researcher at the Yangtze River Delta Green Value Investment Institute.


  This article was first published on WeChat WeChat official account: International Research Institute of Green Finance of Central University of Finance and Economics. The content of the article belongs to the author’s personal opinion and does not represent Hexun.com’s position. Investors should operate accordingly, at their own risk.

(Editor: Ma Yan)