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Cover photo | Stills from “The Battle”

01

ask:In a recent interview with China Entrepreneur magazine, boxing Olympic gold medalist Zou Shiming and his wife Ran Yingying shared their entrepreneurial experience. Zou Shiming admitted that entrepreneurship is more challenging and emphasized the importance of going with the flow. Ran Yingying revealed that in the seven years of entrepreneurship, they sold all their properties in Beijing, Guizhou, Shanghai and the United States.

What do you think of Zou Shiming and his wife selling all their properties to start a business? In the current economic and social environment, what are the key factors to consider when choosing to start a business?

Feng Lun:I think the rules of boxing are very clear. As long as you study hard and practice diligently, you will make a little progress every day. Relatively speaking, as long as you practice and find the right method, your results will always improve little by little.

This is a game under rules and certainty, and entrepreneurship is completely different. The rules of entrepreneurship depend on the industry and market environment. For example, in the real estate industry, the rules have changed a lot in recent years and are uncertain, so there are few chances to win.Therefore, current entrepreneurship is a game played in a highly uncertain environment, with a relatively low success rate and much higher difficulty than sports.

I think there are four greater challenges in starting a business now than in the past.

The first is the shrinkage of the market, which we call ebb.For example, the real estate market had nearly 20 trillion new and second-hand housing transaction volumes in 2019, but this year it may only be 6 trillion. After the market shrinks, opportunities naturally decrease a lot, which is a realistic difficulty.

Second, technology has changed a lot.Technology is advancing very fast, and artificial intelligence has entered the field of product production and marketing. For example, when buying a house now, you think you are talking to a broker, but in fact it may be an artificial intelligence robot talking to you. The rapid development of technology has penetrated into all aspects and changed many business structures, consumer habits and scenarios.

Third, the institutional environment has also undergone tremendous changes.Take real estate policies as an example. Before 2019, the policies had been tightening, but now they are gradually loosening. The uncertainty of this change brings great challenges. Enterprises need to constantly adapt to the market, but this adjustment has a lag. In addition, the cognition of enterprises also needs to be updated in time. If the cognition remains in the past ten years, and the environment has changed, the enterprise will fall into a lagging and passive situation. This situation is much more complicated and difficult than before.

Fourth, everyone’s expectations have changed.In the past, the tolerance rate for entrepreneurial failure was relatively high, and you could start over after failure. After the company went public, it could be cashed out, and the flow of funds was relatively loose. Now, once a company goes bankrupt, you will not only be restricted from high consumption, but you may also be involved in complicated lawsuits, and it is very difficult to start a business again. Because now there is no personal bankruptcy protection mechanism after the company goes bankrupt, it is easy to make it difficult for individuals and their families to turn over.

In addition, there are fewer opportunities for companies to go public, and financing, mergers and acquisitions, restructuring, and monetization are more difficult, and supervision is more stringent, which has led to a decrease in external venture capital and PE capital. As a result, it is more difficult for entrepreneurs to obtain capital and solve financial difficulties.The retreat of capital has also reduced enthusiasm for entrepreneurship.

In short, these are all the different entrepreneurial environments we face today, so the boxing champion's feelings are very real. In today's environment, starting a business is indeed more difficult than boxing.

02

ask:In recent days, the voice of "real estate tax is coming" has been raised again. Because the conference document "Decision" released on July 21st stated: Improve the real estate tax system, and clearly stated: By the 80th anniversary in 2029, the reform tasks proposed in the "Decision" must be completed. How should we understand "improve the real estate tax system" in the "Decision"? Do you think it is possible for the real estate tax to be fully implemented in the next five years?

Feng Lun:The collection of real estate tax mainly involves two things.

First, Chinese law stipulates that land belongs to the state, while real estate is privately owned.This leads to an issue of incomplete property rights, as the property is private property built on state-owned land.In this case, the legal basis of real estate tax as a property tax seems to be controversial.

If a person rents land for 70 years and builds a house on the land, although he pays rent for the land and owns the property rights of the house, the land itself is not his property. This raises the question: legally, should this property based on a lease relationship be taxed? I don't think it meets the criteria for property tax.

Second, the collection of real estate tax also involves technical issues, such as the valuation of real estate.At present, relevant departments are studying how to accurately assess the value of real estate in order to levy taxes reasonably. The collection of real estate tax requires an accurate valuation system to ensure the fairness and rationality of taxation.

I think the premise for collecting property tax is that the land use right is automatically renewed for 99 years after expiration, and no more fees are charged. In this way, it can be collected. Singapore adopts a similar method to collect taxes on 99-year land, but the tax amount is lower.When levying real estate taxes, precise standards and digital processing systems should be established based on the property's useful life, the remaining useful life of the land, and the market appraisal price.

At present, we have made great progress in technology, but the legal conditions are not yet fully mature. If the technical conditions are in place and the laws are mature, then it can be collected; if the technical conditions are in place but the laws are not yet perfected, local governments may also consider increasing revenue and supporting local development by levying real estate taxes due to financial difficulties.