Pearl River Delta Textile Industry: Orders Are Soaring, Manpower Is Too Expensive.

The arithmetic results of workers and machines are reversing, and the labour intensive industries in the Pearl River Delta are in the climax of machine substitutions.

At the moment when orders are still rising, the machine has not started eating people.

It remains to be seen whether the factory's chains of fixed assets can force the pformation and upgrading of the real technology and value chain.

2005, Dalang town woolen garments

Wang Yongzhou, a 27 year old salesman, finally waited for his "best days".

The little boy in Zhejiang sells a computerized pverse loom, a machine that uses computer programming language to carry out intelligent control over the entire weaving system.

A year ago, he could sell two or three units in a month, and now he can sell so much in a day.

"The most important thing is no goods". Just like any seller who has "odd goods", Wang Yongzhou can not hide his excitement and arrogance. "More than 5 sets, two times to give, more than 10 sets, four times to give, and" he paused, "after September."

His company, headquartered in Zhejiang, is still producing automatic mahjong machines two years ago. Now it has turned to the new business of horizontal looms.

In the first half of last year, they opened a distribution point in Dongguan and shipped the machines from Zhejiang.

In just over a year, blowout sales allowed the boss to invest 50 million yuan in Dongguan next month.

Wang Yongzhou's store is located in Dongguan, China's wool textile city.

This small town, which is only 118 square kilometers, has gathered 45 CNC loom companies, 1/3 of which only opened after 2009.

Last November, at the eighth Dalang trade fair, more than 50 textile machinery enterprises applied to the Organizing Committee for more than 150 booths. This is a situation that has never happened before. The organizing committee had to temporarily pform some of the exhibition areas into machinery areas, which almost doubled the original booth, but still could not meet the demand.

According to statistics, in 2009, about 28 thousand and 900 sets of CNC looms were produced and sold in Dalang Town, mainly sold to the Pearl River Delta.

Among them, only Dalang town and neighboring Changping Town consumed more than 4000 units.

According to a data provided by Dalang Investment Promotion Office, in 2005, only 2000 sets of CNC looms were used in Dalang town's Woolen garment production enterprises, up to 4000 in 2008, and 6000 in 2009.

Buying machine tide

"In the past few years, sales volume stabilized at 150 units / year, and orders for this year have surged to 450 units."

The change is not just the wool textile industry.

The Dongguan Bo Jin Machinery Equipment Factory, which makes toy equipment, sells the best cotton machine this year -- a machine that fills cotton in the dolls. Each machine can replace 20 people.

Wang Junping, director of sales, said that more than 70 units were sold last year, and more than 200 units are most conservative this year.

There are also plug-in machines that are selling well. This machine mainly provides plug-in equipment for electronic components, and is applied to the production of household appliances, energy saving lamps, LED lighting and display screens.

At present, there are only two domestic manufacturers: Dongguan's New Ze Valley and ZHENG Ke electronics.

"In the past few years, sales volume was stable at 150 units / year, and this year's orders have surged to 450 units."

Chen Zhuozhong, sales director of New Ze Valley, told reporters on the phone.

In the second half of last year, it was officially launched, and sales were equally hot.

In July 19th, the reporter saw the red banner of congratulatory sales exceeding one hundred at the gate of the third industrial zone in Daling mountain town. Workers in the workshop on the first floor were still working overtime during the meal.

General manager Gan Ning told reporters that orders had been placed in October, and he is now "afraid to pick up the goods."

The east alliance also felt this heat.

It is the first and only financial leasing company in Dongguan. In 2006, it began to carry out the machine leasing business outside the company (the enterprise selected equipment, the east alliance contributed to buy, rented to the enterprise).

At the beginning, the rental facilities were large construction machinery and medical equipment, and the benefits were not good.

Until the second half of 2009, Mr. Ni Ling, the general manager of fund managers in Wall Street for four years, adjusted the direction of leasing labor intensive production equipment (such as plug and patch machine). The volume of business increased suddenly. At the end of last year, it has invested 1.5 billion.

Man and machine: the abacus of reversing

Everyone who sells machines and machines will tell reporters: labor is too expensive.

A business owner in Dongguan told me to work overtime at night without anyone coming.

In a rage, the boss bought three plug-ins.

What made China suddenly usher in this wave of machine change?

Almost everyone who sells machines and machines will tell reporters: because labor is too expensive.

Take the hot computerized horizontal looms as an example, the biggest feature of the machine that began to be made in China around 2004 is to save labor. Before that, many of the wool textile factories in Dalang used hand-held machines and automatic belt conveyors. The former needs one worker per unit, and the latter needs one person for every two units.

Now the computerized horizontal loom, a worker can see 6-8 at the same time.

Wang Yongzhou calculated the accounts. At present, the wages of textile workers are generally 1500 to 1800 yuan (skilled workers are higher), plus meals and accommodation, each worker will spend at least 2000 yuan a month, and the cost of labor can be reduced to the original 1/6 - 1/8 every time a computer pverse loom is added.

A machine is 80 thousand -15, and it can be returned in one or two years.

And plug-ins that directly replace manual plug-ins have higher cost performance.

Gan Ning, an electronic general manager, made an estimate that under the same monthly production capacity, a set of machine lines needs 3 workers, while a traditional hand insertion production line needs 14 proficient workers. According to the monthly salary of 1500 yuan per person, the machine can save nearly 200 thousand of the labor cost in one year.

Cai Lihui, general manager of Guangzhou special acoustic sound factory, is one of the customers attracted by this arithmetic result.

After that year, he bought 5 plug-ins.

The original all hand insertion, 80% into machine plug.

He confirmed to reporters that the cost savings were equivalent to that of Gan Ning.

This was unthinkable decades ago.

In the 80s of last century, China began to undertake the third major manufacturing shift in the world.

Chinese migrant workers use a pair of flexible hands to quickly install more than a dozen tiny parts that are barely visible to the naked eye to a square inch printed circuit board. They work overtime without complaint, and earn less than a few hundred yuan a month.

By contrast, machines at that time could be described as "expensive".

Take the textile industry as an example, the price of a STOLL numerically controlled loom imported from Germany is generally between 250 thousand -40 yuan and Japan's original imported precision CNC loom is 350 thousand -45 yuan.

According to the life span of 8-10 years, the maintenance cost is 2-3 yuan per year.

If calculated according to the monthly output value of 350 yuan, it will take about 5-7 years to recover the cost.

The accurate calculation of cost allows entrepreneurs to choose "people".

A few years ago, Yuan Gangming, director of the macro room of the Institute of economics, Chinese Academy of Social Sciences, saw a brand-new plug-in machine covered with plastic cloth in a landscape furniture factory of a Japanese enterprise in Ningbo, Zhejiang.

"This is a very advanced equipment, millions of.

But the Japanese finally chose to hire young Chinese women workers to manually plug in.

Yuan said.

But since 2004, this phenomenon has begun to reverse.

Since the beginning of that year, the shortage of migrant workers has spread from the Pearl River Delta and the Yangtze River Delta, and even a large province in the central part, which is the source of labor output, has also seen a shortage of migrant workers.

The change in supply and demand has increased the price of Chinese workers, which has nearly tripled compared with ten years ago.

At the same time, with the progress of domestic technology, the price of machine began to drop.

Now, a domestic computerized horizontal loom is usually priced between 80 thousand -15 yuan and less than 1/4 of imported machine, and its maintenance cost is much lower than that of imported equipment.

If the average daily production value is 200 yuan -250 yuan per day, the cost can be recovered in 1-2 years.

More importantly, even if a business owner has a way to fill the workshop with young faces born in the 80s, they will still find that this generation of migrant workers is much different from the previous generation.

They no longer complain about overtime work. They like to go to Internet cafes and earn more money.

They do not even want to live in a collective dormitory provided by enterprises for free, for the reason is that management is too rigid.

And their parents are more fond of these single children who have grown up under the family planning policy, so long as they make a phone call to say hard, let them go home.

In the first half of this year, Foxconn's 13 jump and Honda events made the outside world realize for the first time the change of this group.

Chinese entrepreneurs are forced to use pay increases to appease their emotions.

In the past few months, Foxconn's pay has increased by more than 60%, while Guangdong, Zhejiang, even Beijing, Tianjin, and other places have raised the minimum wage.

"The wage earners are no longer the former wage earners". These 80 after 90 workers made Dai Yong, who had been doing second-hand equipment business for more than 10 years.

He told reporters a story just happened: a business owner in Dongguan, called the leader of the group at 12:30 noon to inform the night to work overtime; at 15:30, the notice was posted to the staff dormitory, but no one came at night.

In a rage, the boss bought him three plug-ins.

Everything just started {page_break}

"Our machines are only the same as those of the West in the 80s of last century."

Dai Yong said impolitely.

Since the reform and opening up, China's rapid economic growth has actually enjoyed the "dividend" brought about by the massive growth of population in the first 10 years before the implementation of the family planning policy. From 1978 to 1998, in China's rapid economic growth for 20 years, the contribution rate of capital was 28%, the contribution rate of technological progress and efficiency improvement was 3%, and the rest were all contributed by the labor force.

But such dividends are unsustainable.

A few years ago, Cai Fang, director of the Institute of population and labor economics of the Chinese Academy of Social Sciences, proposed that the "demographic dividend period" that China entered in the middle of 1960s will be concluded before and after 2015.

In fact, such a process has been experienced in Japan in the 70s of last century, and thus entered an industrialized era of rapid technological progress.

In the 50s of last century, Japan's post war economic take-off also depended mainly on cheap, willing and disciplined workforce.

However, in the early 60s of last century, Japan took the initiative to give up this advantage and seek the development strategy of high wages, high welfare and high labor productivity.

As a result, Japanese robots (39.290, -0.54, -1.36%) are the most widely used in the world.

China surpassed Japan last year to become the second largest producer of manufactured goods after the United States, but the level of industrialization is hard to come by.

"Our machines are only the same as those of the West in the 80s of last century."

Dai Yong said impolitely.

According to Nomura's data, the proportion of machinery and equipment used in China's CNC system in 3-5 months this year is a common indicator of automation, rising to 27%, higher than the previous two years.

But this level is only comparable with that of Japan in the 80s of last century. At present, the proportion of CNC in Japanese factories has risen to 82% of the world's leading level.

Compared with the west, China has a large and cheap labor force, the process of mechanization is much slower.

In the impression of Dai Yong, the use of machine fever in the labour intensive industries of the Pearl River Delta was around 2000.

At that time, he and his partners, mainly maintenance workers of imported machinery, cleaned out the machine that had been scrapped from the imported electronic waste, and repaired it as a two mobile phone, which sold for more than half of the price.

The second-hand e-waste business has been going on for ten years.

When the domestic equipment manufacturer finally appeared in this industry, Dai Yong turned over to the past after the Spring Festival this year.

"With the rise of labor prices, mechanization and automation will be an irreversible trend," he said.