Quanzhou Bay: Facing The Pain Of Transformation (Part 1)

Changing the mode of economic development is the most critical year for China's economy this year. How to do that? How? We invited Li Yining and other famous economists to visit the Pearl River Delta, the Yangtze River Delta, the Bohai Sea Rim, the central and western regions, and the northeast region to go deep into the front line and discuss ways of transformation. The first stop is the Pearl River Delta. Made in China is one of the important signs of China's rapid economic growth. However, the international financial crisis in 2008 brought severe challenges to Made in China. Especially in the southeast coastal areas, many export processing bases used to earning small profits from overseas orders fell into the freezing point for a while. For them, transform the mode of economic development, step up to the top of the global industrial chain as soon as possible, and realize the trend of "Made in China" Created in China Transformation is the most realistic and urgent way.

In the 21st century, China, known as the "world factory", has become a global processing and production center, and has mastered a certain degree of production leadership. However, we have been at the low end of the global industrial chain for a long time, and the trade leadership is far from us. Since the financial crisis, "Made in China" has shown its development worries. To complete the leap from "Made in China" to "Created in China", we are clearly just on the way.

In Quanzhou Bay, the core area of Haixi District, 53 listed enterprises have gathered, forming a textile and clothing industry cluster with an output value of nearly 200 billion yuan. For example, dozens of famous brands such as Anta, PEAK, Jiumuwang, 361DU [3.37 0.60%] are all in Quanzhou. Their path in the market competition of survival of the fittest may tell us that in today's economic globalization, what we should pay attention to is not how much is made in China, but what is made in China, and what does the value label of "Made in China" mean?

1、 Crisis and opportunity

On May 7, the Enterprise Listing Office of Quanzhou Municipal Government was listed. As a unique government agency in Quanzhou, the listing office has been unofficially existing, playing an important guiding role in the process of more than 50 enterprises listing and creating many well-known brands. Liu Shuqing, deputy director of the Listing Office, told reporters that more than 10 years ago, there were only factories here, but no brands.

Enterprises in Quanzhou list Liu Shuqing, Deputy Director of the Office

Liu Shuqing: For textile, footwear and clothing, these enterprises started to contact Hong Kong and Macao, and were driven by overseas Chinese. At this stage, the low-level labor-intensive mode, because the threshold is relatively low.

After more than 20 years of development, Quanzhou Bay has formed a complete industrial chain and a huge industrial cluster from silk drawing, weaving, dyeing and finishing to garment production. Before the financial crisis, Quanzhou had more than 8000 textile and clothing production enterprises, with about 500000 employees, an annual output value of more than 100 billion yuan, accounting for 10% of the national output.

In 2008, the international financial crisis affected the southern coast, and some enterprises with low profit margins fell first. Quanzhou, Fujian, has also been strongly impacted. 20% of enterprises have implemented "merger" and "transformation", and many well-known brands have also been impacted.

Jiumuwang is a well-known large enterprise in the country, which has developed into a production line with thousands of employees working at the same time. However, it was difficult to recruit workers before.

　　 Joeone Lin Congying, Chairman of International Investment Holding Co., Ltd

Lin Congying: The original plan was to increase 1000 people, but only 700 people were recruited.

The shortage of migrant workers has hit many labor-intensive enterprises in the southern coastal areas. The powerful well-known enterprises like Jiumuwang have not recruited enough workers. It is conceivable that some small enterprises have not recruited enough workers.

Lin Congying, chairman of Jiumuwang, led reporters to visit his factory. He told the reporter that this production line of trousers is already the most advanced production line at present. He pointed to the skilled and quick workers on the assembly line and praised them. However, he immediately began to sigh. Because there is a growing shortage of labor force, it will be more difficult to rely on labor force. He told reporters that enterprises must transform, and the financial crisis prompted him to think more long-term.

Lin Congying: The financial crisis is a great opportunity for our enterprises, or for our Chinese enterprises. Why? We use this period of time to constantly adjust, constantly upgrade, and constantly examine the strengths and weaknesses of our enterprises, including our core competitiveness.

Lin Congying seized the opportunity of the financial crisis and bought a lot of technical equipment, thus improving labor efficiency and reducing dependence on labor.

Lin Congying: These machines are automatic. Some of the machines that were cut back were originally manual, but now they are replaced by machines.

Lin Congying's goal is to transform his enterprise from labor-intensive to technology intensive as soon as possible. Use high-tech to upgrade the manufacturing level.

Lin Congying: In the whole manufacturing process, it can improve everyone's efficiency every day.

The reporter then came to another well-known enterprise in Quanzhou, the sports brand Tebu Company. Vice President Liu Qingxian excitedly led the reporter to meet a person.

Reporter: Where are you from?

Designer: Seoul.

Liu Qingxian: Seoul, right.

It turns out that what the reporter saw was the chief executive of South Korea who was just introduced by Special Step a few days ago designer 。 This designer has a variety of fabrics and colors on his desk. He will more boldly match colors and styles for fashion sports products in special steps.

Liu Qingxian, vice president, told reporters that the financial crisis had impacted the domestic textile and clothing industry, and everyone was trying to change the development mode. However, the financial crisis has caused greater market and employment problems in some foreign countries and regions. Special step companies have taken the opportunity to attract international talents on a large scale.

Liu Qingxian, Vice President of Tebu China Co., Ltd

Liu Qingxian: We will introduce more talents, such as those from Hong Kong, Taiwan, Japan, and South Korea. We have three groups, namely, South Korea, Japan, and China. These three groups work together. So Korean people are very sensitive to the whole color, and Japanese people are very sensitive to the whole quality, He has a very good grasp of technology.

Liu Qingxian told the reporter that before that, Tebu was only a minor supporting role in the international industry chain. Now it is necessary to take the opportunity of the financial crisis to integrate international resources on a large scale. In fact, they began to transform into their own brands four years ago, while for a long time before, they were doing OEM production.

Liu Qingxian: The whole Jinjiang, our entire product, including the entire supply chain, is suitable for foreign trade products and border trade. Since 1986, we have been doing it for more than ten years.

Liu Qingxian told the reporter that because the threshold for OEM was very low, more than 8000 enterprises and hundreds of thousands of people jointly engaged in garment production emerged in Quanzhou Bay later. It seems extremely prosperous, but everyone earns hard money.

Liu Qingxian: Don't make money, but use quantity to fill the whole benefit and win with quantity, because it has a large number of brands, is relatively simple, is easier to manufacture, and is easier to do.

When the financial tsunami came, small fish and shrimp were first washed up on the beach, and the low-grade OEM production model finally had no way to go. A number of small enterprises with low export added value and no ability to take orders independently withdrew from the market. For export enterprises settled in US dollars, for every 1% appreciation of the RMB exchange rate, the sales profit margin of the textile and clothing industry will decline by 2% to 6%.

The impact of the financial crisis has made Xu Gang, secretary of the Quanzhou Municipal Party Committee, worried about the future of Quanzhou's clothing industry cluster.

Xu Gang, Secretary of Quanzhou Municipal Party Committee

Xugang: Land resources are scarce, other major raw materials are scarce, water resources are also scarce, and the ecological environment energy is also limited, fragile, and can not withstand the twists and turns. It is our case that labor costs are constantly rising, and the proportion of traditional industries in products is relatively high.

The profits of the whole industry are declining. How can the labor-intensive industries adapt to the changes in the economic environment and seek breakthroughs under the impact of the financial crisis? The large-scale labor-intensive industries in the southern coastal areas are facing huge development bottlenecks, and transformation is the only way.

Xu Gang: It's a good thing for it, forcing it to change, forcing it to speed up its transformation, a kind of compulsion, a kind of compulsion of the market. This is mainly a pain to this extent, but it completely wakes everyone, including entrepreneurs, and also lets officials see clearly that no change is not allowed.

2、 Gene mutation of enterprises

Twenty or thirty years ago, many Chinese enterprises started as contract manufacturers, which can be said to be the weakest link at the lowest end of the industrial chain. With the discovery of huge interests in the industrial chain, these enterprises began to imitate and create their own brands. The economic environment is constantly changing, they are also constantly adjusting the company's organization and marketing methods, and the products are also constantly upgrading. Eventually, they grew from small enterprises to large companies listed at home and abroad. Their growth proves once again that change is the way to survive.

As early as before the financial crisis, many enterprises in Quanzhou had experienced a similar survival crisis. The well-known brand Lilang was once on the verge of bankruptcy when it had no independent brand.

Wang Liangxing, President of Lilang (China) Co., Ltd

Wang Liangxing: At that time, it mainly relied on the wholesale of stone lions. It was unknown who would get them. However, the added value was relatively low and the inventory was large.

However, Lilang has become one of the most obvious garment enterprises during the financial crisis. The reporter came to Lilang Company, but did not see their factory buildings.

President Wang Liangxing told reporters that they only have one most important department in Quanzhou, that is, the design room. They are preparing for expansion. They are about to launch a new young fashion series and create a new brand, rather than expanding a new factory.

Wang Liangxing, President of Lilang (China) Co., Ltd

Wang Liangxing: For example, for this ordinary brand, once we design the whole trademark and transform the image project, we will send a designer there. After the whole process, we feel that this brand is alive, like an international brand, and its value is reflected. So what we need to do is to build the packaging capacity of our brand, which is the ability to turn stone into gold.

Wang Liangxing believes that the ability to turn stone into gold comes from the design room, the most critical department of Lilang Company, because it is here that most of the value of a garment is created, rather than in the production workshop. In the design room, the designers are busy preparing for the exhibition hall, because the French Paris Fashion Union, which cooperates with Lilang, is coming soon.

Ji Wenbo, Chief Designer of Lilang (China) Co., Ltd

Ji Wenbo: We call it black, white and grey, the main color of purple, gold and green. But we should take it out today.

Wang Liangxing: You have noticed that our jeans don't really have jeans. The fabric of our jeans is just like casual pants.

Wang Liangxing pointed out to the designers that the design taste of jeans in the exhibition hall was not pure enough and must be corrected. The young designer immediately brought a variety of styles of jeans for comparison.

Ji Wenbo: Sometimes it is necessary to grasp a certain time span, which is relatively large. Today, it will be put into spring and summer.

Wang Liangxing: I don't think it's a big problem. You can push it in several styles.

Lilang has invited senior domestic designers and invested hundreds of millions of yuan every year to develop and design clothing styles. Because they believe that the cost of a garment is actually very low, but to make money and sell at the same high price as international brands, we must rely on original design.

Wang Liangxing: So if you sell this dress for 1000 yuan, you can also sell it for 5000 yuan. That means the value created by the whole R&D and design. (Answer) This one is more personalized. (Answer) So what's the suit you are thinking about? What's the difference between the international brand and Armani.

The reporter then came to a national sports science laboratory of Anta Company in Quanzhou. Ding Zhizhong, president of Anta, proudly told the reporter that up to now, Anta is one of the enterprises with the most patented technologies in the industry, and they use more than 50 patented technologies for all products.