Zhejiang Credit Crunch Sample: The Domino Plate Of Small And Medium Enterprises

Although the boat is small and good, it will go through the storm.

Zhejiang's economy has been famous for its small business development for many years. Nowadays, the large number of small and medium-sized enterprises that account for 99% of the total number of industrial enterprises in the province are at the development node.

The RMB appreciation, tight money, rising costs, the export tax rebate rate reduction and the growth of the world's major economies slowed down, and a variety of unfavorable factors superimposed. Large enterprise groups also encountered difficulties, let alone single and medium-sized enterprises.

Although there is no obvious evidence that Zhejiang's economy will not recover, the inflection point has emerged.

At the critical juncture, improving the difficult living conditions of the 870 thousand industrial SMEs in the whole province has become a top priority.

"Small and medium-sized enterprises' operation and living conditions are worrying" - the Zhejiang SME Bureau has made undisguised description in the materials submitted to the national development and Reform Commission and the provincial government.

In fact, the problem of small enterprises' survival and financing has been highly valued by the state.

In from July 6th to 8th, Li Keqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and vice premier of the State Council, came to Wenzhou, Hangzhou and other places to inspect some textile, electrical and mechanical and hi-tech enterprises, and chaired a forum on economic situation, focusing on in-depth research on enterprise development and reform, and domestic and international market environment.

In July 7th, the Zhejiang provincial development and Reform Commission held a symposium on economic performance in Wenzhou for the first half of the year. It intends to collect materials for the first half year economic analysis meeting of the national development and Reform Commission (NDRC) held in July 12th.

Prior to the CBRC sources, the CBRC recently organized five or six working groups to go to Jiangsu, Zhejiang and Shandong to investigate the survival status of small enterprises in three places.

The main contents of the survey include the development of small businesses in the context of tight credit, rising costs and appreciation of the renminbi, as well as the financing channels and financing difficulties of small enterprises. It also focuses on whether there are some small businesses that are in line with the national industrial policy and are in the growth stage, and have been "wrongly killed" and become the object of regulation and control, facing the problem of loans.

Is it necessary to make some fine adjustments to the macro policy without changing the basic direction?

Will millions of small and medium-sized enterprises in Zhejiang face a major pformation?

What are the new trends of private capital under the restriction of credit scale?

The reality of Zhejiang can not represent the whole country, but it is quite typical.

"Leap", the leader of China's sewing machine industry, the large taxpayer in Taizhou, the entrepreneurial model of Zhejiang private enterprises, is now facing the situation of private lending.

In the field of sewing machines, "leap" almost covers all types of products. Now it has 31 series of more than 300 varieties, and produces 2 million sewing machines annually. Among them, super high-speed sewing machines and sewing machines account for 50% of the world's total output.

However, in 2007, the rapid appreciation of the RMB and the negative impact of the worsening overseas trade environment led to the total export volume of the group in the 1-4 months of this year, which was only 18 million 480 thousand US dollars, down 44% from 33 million US dollars in the same period last year.

The severe contraction of the overseas market has caused the export business of the export oriented manufacturing enterprise to be hit hard.

And the banks tightened their credit. This leading enterprise was worse than ever, and had to borrow money from the public for turnover at high interest rates, but it could no longer afford to pay it back.

Small businesses with smaller scale and capacity are facing a crisis of survival.

In the first quarter of this year, the total output of Enterprises above Designated Size in Taizhou was 1 million 15 thousand and 600, which was 15.3% lower than that of the same period last year, and the output value and efficiency also showed a marked decline. Many enterprises could only choose to suspend production or even close down.

Shengzhou, since 2000, the global tie processing center has been pferred from South Korea to the city, and Korean enterprises are also coming.

At the most brilliant time, the more than 30 Korean bound necktie manufacturing enterprises settled in the region exported more than US $100 million a year.

Now, with the popularity of high-end looms and advanced technology in Shengzhou, the brilliant Korean enterprises have gradually lost the halo, and most of the Korean enterprises are considering the withdrawal of Shengzhou.

However, the withdrawal of Korean enterprises did not reduce competition pressure on local tie manufacturers.

In May this year, the Shengzhou necktie Industry Association called on all tie manufacturers to raise their collective price by 0.1 US dollars, and only a few enterprises responded.

And more small businesses continue to "break the head" to compete for foreign orders, and the price alliance exists in name only.

Wenzhou, about 20% of the manufacturing enterprises have stopped production or halt production.

Taking the spectacle production industry as an example, the average export price of sunglasses in the first quarter of this year is only $0.7713 per pair, and most enterprises have fallen into a situation of no profit or barely.

With the same fate, Wenzhou Liushi low voltage electrical appliance industry has only 5% of its gross profit in the first half of this year.

However, the biggest hit is Zhejiang's textile and garment industry.

The reporter understands that the export industries in Zhejiang mainly include textile, clothing, chemical industry and electronic machinery manufacturing industry. Among them, the textile and garment industry's export dependence is about 60%, and the added value is low, mainly based on price.

Therefore, the appreciation of RMB will greatly weaken the price competitiveness of Zhejiang's textile and apparel products in the international market.

According to the calculation of the industry, the profit margin of cotton textile, wool textile and garment industry will drop by 3.19%, 2.27% and 6.18%, each 1% appreciation.

If the RMB appreciation is 3%, it may wipe out the average profit level of Zhejiang's textile and garment industry.

"I dare not sign the bill at random.

RMB appreciation is too fast, not doing this business is good, it is sure to lose, it is better not to do it! "

Shaoxing textile enterprise owner told reporters.

"Although I have cut 1/3 production capacity, I am still eating the same old book.

I will not close the factory casually, but I hope to find a home as soon as possible, even if it is sold at a very cheap price. "

Hangzhou a producer of foreign trade clothing told reporters.

Not only small and medium enterprises, but also large scale enterprises in Zhejiang.

According to the analysis of the industrial and trade economic situation of Zhejiang Province in the first quarter of the Zhejiang economic and Trade Commission, in the 1-2 month of this year, the increase in industrial added value of Enterprises above Designated Size in Zhejiang was 2.8 percentage points lower than the national average level, ranking 25, the profit growth rate was 9.8 percentage points lower than the national average level, and the comprehensive index of industrial economic efficiency continued to be lower than the national average level.

The deficit of Enterprises above Designated Size reached 26.1%, and the total loss was 6 billion 480 million yuan, an increase of 71.3% over the same period last year.

The information also shows that Zhejiang petrochemical, textile, telecommunications, electronic equipment manufacturing and other industries have been losing trend, the most prominent is the oil processing industry.

Under the sharp concussion of crude oil prices, the 1-2 month profit of chemical fiber manufacturing increased 157% from last year to minus 8.5%.

In the communications equipment, computers and other electronic equipment manufacturing industry, the growth of 1-2 month main business income and 1-3 month export delivery value decreased by 38.2 and 33.8 percentage points respectively over the same period last year.

Leading enterprises in some industries, such as Zhenhai Refining and chemical industry, lost 1 billion 270 million yuan from 1 to February, while the output value of Hangzhou Motorola, Dongxin mobile and Toshiba decreased by 64.16%, 39.9% and 40.8% respectively.

The RMB appreciation, tight money, rising costs, the export tax rebate rate reduction and the growth of the world's major economies slowed down. The superposition of various factors made Zhejiang enterprises face a severe survival situation in 2008.

Panan county children's car manufacturers, as the price of steel rose from 4500 yuan per ton at the beginning of the year to 6500 yuan per ton, the previous orders were all loss; a labor-intensive enterprise in Taizhou, the total number of employees, more than 10 thousand people, if the "hardware" full coverage, the need to increase the cost of about 14000000, plus raise the wage level about 4000000, cumulative labor costs increased by 18 million yuan, accounting for 27% of the company's annual profits; 45 enterprises in Wenling have closed down; Wenzhou is currently closed down, half of the small and medium-sized enterprises have 1486, accounting for 6.3%, the city fastener industry 3 years ago, there are dozens of enterprises, there are still surviving.

It is still unknown how many Zhejiang enterprises will fall down like the "Domino" dominoes.

Export 800 million shirts to change to a Boeing aircraft; the price of an electric car is only the price of a foreign shoe; the 6 meter YKK zipper can buy 1000 meters of zipper produced in Zhejiang; the Bobbi doll sells for 329 yuan in the country, and the processing fee is only 4 yuan.

These familiar data not only illustrate the low price strategy used by Zhejiang's export products, but also show another structural risk of Zhejiang's foreign trade enterprises, that is, "heavy exports and light domestic sales", and the structure of imports and exports is obviously unbalanced for a long time.

This is in sharp contrast to the import and export structure of Jiangsu's "half of the import and export".

"Why are Jiangsu's foreign trade enterprises better than Zhejiang's foreign trade enterprises? The reason is that Jiangsu is walking on two legs, and imports and exports are evenly distributed.

In the rapid appreciation of the renminbi, the impact of exports is the most dramatic.

A foreign trade company boss told reporters reluctantly that they also want to change from "just out of the way" to "coming in and out", but this change can not be promoted in a short time. At present, the only thing that can be done is to survive risks and seek the way forward.

At the same time, Zhejiang's banking industry has also been greatly affected by the foreign trade structure of Zhejiang's heavy export and light domestic sales.

"For example, assuming that Jiangsu branch can only do half of the Zhejiang branch in international settlement business, its profit is comparable to that of Zhejiang branch.

This is the advantage of both imports and exports. "

A state-owned bank Zhejiang branch told reporters.

"The external dependence of Zhejiang's industrial economy is at home. Over the years, 30% of the industrial economic growth has come from exports.

However, this year, the export situation is very serious, and the growth rate has fallen to a low level.

People in Zhejiang SME Bureau think so.

According to the data provided by the SME Bureau of Zhejiang Province, the total delivery value of exported products reached 252 billion 786 million yuan in the 1-4 months of this year, an increase of 12% over the same period last year, an increase of 10.67 percentage points lower than that of the same period last year, which has dropped to the lowest point in recent years.

If the factors that increase the cost of products are removed, the actual export growth is only about 8%.

In April, the delivery value of export products of Enterprises above designated size was 81 billion 332 million yuan, up only 11.2% from the same period last year, and the growth rate was the lowest in 1998 (around 30% in previous years).