Another 405 Foreign Companies Have Disappeared From Dongguan.

US sub prime mortgage crisis, global inflation, RMB Appreciation...

A series of economic and trade turmoil also spread to Dongguan's economic development.

In May 28th, the Sanjiang Industrial Park, Hengli Town, Dongguan, gathered more than 20 suppliers at the door of the bankrupt Feng Sheng Paper Products Co., Ltd.

Before the closure, Feng Sheng company owed the supplier about about 4000000 yuan.

Dongguan intermediate people's court related research shows that in recent years, Dongguan enterprises have gone bankrupt or moved abroad.

According to preliminary statistics, in 2007, about 900 enterprises in the city were shut down, most of them were labor-intensive enterprises.

High land price, rising labor cost and high exchange rate......

This is the collective dilemma currently facing Dongguan's labor-intensive enterprises.

Some enterprises are unable to withstand Kanmon Ooyoshi, while others are still struggling to support them, but they do not know how long they will last.

Close down faction

Costs rise, profits are eroded, factories are forced to shut down.

"Feng Sheng Paper Products Co., Ltd. was founded in 2004. Since then, I have been supplying fabric for them."

Supplier Mr. Li told reporters that the factory had never been in arrears before.

But more than half a month ago, Feng Sheng company stopped production and owed him about 300000 yuan.

A supplier was about 600000 in arrears. When I heard that Feng Sheng Paper Products Co., Ltd. was closed down, it was almost limp.

Many suppliers said that the reason for the closure of the plant should be related to the rising RMB exchange rate and domestic inflation.

"In the past two years, many negative factors such as RMB appreciation, raw material price increase, labor cost rise, labor shortage, electricity shortage and so on are all squeezing the profit margins of enterprises.

At the policy level, export rebates, processing trade and environmental monitoring are also constantly being adjusted, including foreign trade enterprises including shoemaking enterprises.

Heng Feng long, a factory manager of Feng Sheng company, told reporters that Feng Sheng officially opened and operated at the end of 2004, and the best operation was from 2006 to the first half of 2007.

But from the second half of last year, the efficiency of the factory began to decline. This year, according to the provisions of the labor contract law, for every employee, after the full social security and overtime wages were paid for each employee, the expenditure in the factory increased sharply, so the decision to close it was made.

It is understood that the minimum wage in Dongguan in 2002 was 450 yuan, and now it is 770 yuan, which has increased by more than 70% in 6 years.

In fact, the wages of workers in the Pearl River Delta are far higher than the figure, ranging from 1000 yuan to 1500 yuan.

But even so, recruitment is still difficult.

In addition to lack of jobs, pressure also comes from rising raw material prices, utilities and factory rents.

Heng Wenlong said that he had a friend who opened a garment factory. The raw material of copper buckles, copper from the beginning of 2004 to 20 thousand yuan / ton, surged to the current 60 thousand yuan / ton, while the cost rose, while the price of products did not rise at the same time.

Bitter camp

I don't know how long I can insist on moving away.

A manager Zhang Xing, Dongguan Houjie Jinfeng rubber and Plastic Co., Ltd., has been very pleased with the fact that many of his peers who have been competing with him have collapsed in the past year. "The appreciation of the renminbi has dropped a lot, and raw materials have surged and shut down a lot. The implementation of the new labor law has killed a large number of competitors, and there are fewer competitors."

"The number of manufacturing enterprises in Dongguan, which is larger than the number of enterprises that have been withdrawn from bankruptcy in recent years, is still struggling."

Zhang believes that moving away is actually an option.

Although the cost of relocation to other places will be lower, the supporting industry chain and familiarity will also be much worse.

Moreover, for many entrepreneurs who have worked hard in Dongguan for many years, their foundation is here, and they are very sentimental about this land.

It takes a lot of courage to start from a familiar place and move to a completely new place.

No real pressure is enough, no one will do so.

Zhang manager is very emotional.

Heng Wenlong said that Feng Sheng Paper Products Co., Ltd. also worked hard for nearly a year before making the decision to close.

After the bombing of RMB appreciation, raw material prices and export rebates, the new labor law was widely described as "the last straw to crush the camel" in the manufacturing industry.

However, in these struggling manufacturing enterprises, especially in some small businesses, there is not a lot of truth in implementing the new labor law, and many enterprises are still hesitating.

"If we strictly follow the new labour law, we will have closed long ago."

A factory official, who declined to be named, said.

Of course, they are not doing nothing about the new Labor Law: factories are increasingly stressing that employees should be humanized in sensitive times, and that employees should not be allowed to complain or make trouble.

In order to appease their employees, they also repaired their dormitories and improved their mess.

Related questions

Most of the enterprises are labor-intensive.

On June 24th, Li Yuquan, mayor of Dongguan, pointed out at the meeting of leading cadres of the city that 1~5 cities in Dongguan had shut down and pferred 405 foreign-funded enterprises this year, an increase of 36.4% over the same period last year.

It is understood that most of the labor-intensive enterprises are mainly concentrated in shoemaking, hardware, textiles, furniture and other industries.

There are some reasons for the normal expiration of the contract, but there are also many enterprises that fail because they can not continue to operate.

Question 1

Is double pformation too urgent?

Heng Wenlong admits that the policy of Dongguan's industrial pfer and upgrading must be right.

Manufacturing is a "geese flying enterprise". It always migrates to low labor costs. The United States, Japan and the "Asian Four Dragons" all come here. Now Dongguan is following the same rule. When the cost goes up, it will shift to lower labor costs.

However, with the increasing pformation of Dongguan's dual pformation, some problems are gradually emerging.

It is a good thing to reduce the number of labor-intensive enterprises and increase the number of hi-tech enterprises. We also see the hope of the PRD.

But the problem is that the operation is too urgent for the small and medium-sized enterprises to consider less, we should give more time.

Most enterprises are not ready yet. Suddenly they shout and withdraw, and naturally they will be confused.

Heng Wenlong said that too much haste can easily lead to a series of problems.

For example, many foreign capital enterprises are ignoring the interests of their employees and suppliers, abandoning their factory rolls, and eventually paying for these enterprises are often local governments.

Question 2

Can Dongguan bear the chain effect?

Rebirth is a painful process. What will the future of Dongguan after the relocation of enterprises and new Wan people?

What kind of changes will the business, hotels, renting and other industries closely related to manufacturing industry and new Dongguan people meet?

Zhang Quansu, the owner of leather shoes located on the first floor of Dongguan Hao shoe material Plaza, told reporters that he used to provide various leather materials for Dongguan's local shoe factories.

But in recent years, customers whose business has been relatively fixed has gone bankrupt, and their orders have been reduced by a great deal.

Secretary General of Dongguan Houjie Taiwan Investment Enterprise Association said that the chain reaction of large scale enterprises' failure or relocation is enormous.

The chains previously tied to businesses will quickly disintegrate.

Take the garment factory as an example, a larger garment factory is closed, and the supporting carton factories, printing plants, packing plants and various accessories factories will be involved.

"Usually there are nearly 20 supporting factories in big factories, and the closure of these small factories will lead to a chain reaction of the lower factories."

"Not only the chain of enterprises, all aspects of life have also formed a chain.

Shops will be closed for workers to make daily necessities, and schools for new Dongguan will go bankrupt, and many other third industries and fourth industries will be affected.

Secretary Wang said.