Investment In Footwear Industry Is Shrinking &Nbsp; Where Will The "Wenzhou Model" Go?

Having 800 billion yuan of idle capital.

"China's hardware and sanitary ware capital", "China's automobile and motorcycle capital", "China's capital of electrical appliances", "China"

"Fewer and fewer people are willing to engage in industry."

Reporters heard more than once about many businessmen in Wenzhou.

Zhou Dewen, President of Wenzhou SME Promotion Association, told our reporter that this is a harbinger of "hollowing out".

"Traditional manufacturing entrepreneurs lack confidence in industry and are unstable in nature. This is a cause for concern."

Zhou Dewen said.

Wenzhou daily wrote that in the past ten years, the investment rate of Wenzhou has been hovering around 35%, far below the 47% of Zhejiang and 67% of the whole country.

In the first half of 2010, Wenzhou was remembered as "not bad money".

At the same time, Zhou Dewen has estimated that the idle civilian capital of Wenzhou has reached about 800 billion yuan.

Wenzhou's "12th Five-Year plan" outline stated frankly that during the "11th Five-Year" period, the city's industrial upgrading did not achieve substantive breakthroughs, and the lack of scientific and technological support capabilities and the shortage of talents became more prominent.

Where will the "Wenzhou model" go?

Investment in footwear industry shrinks

Shoemaking is a very important industry in Wenzhou.

The industry chain of Wenzhou footwear industry is relatively perfect. Supporting products include all fields needed for manufacturing shoes, shoes, shoes, shoes, packaging, printing and so on. The annual output value is about 70 billion yuan, which accounts for between GDP 1/4 and 1/3, and is undoubtedly one of the pillar industries of the local economy.

However, in a document on accelerating industrial pformation and upgrading, the Wenzhou municipal government pointed out that in recent years, raw material costs, export costs and land costs have increased to a large extent, resulting in intensified competition in the industry and reduced profit margins, resulting in many shoemaking enterprises opting out or moving out.

During the peak development period, there were more than 6000 shoe factories in Wenzhou, and the number of shoe factories has dropped to more than 2000.

The Wenzhou economic and Trade Commission has conducted a survey of 15521 small and medium-sized enterprises in 31 industrial strong towns and development zones. The results show that the total number of stoppages, half stoppages and failures accounted for 8.1% of the total surveyed, of which 1/3 were shoe companies.

In other words, nearly 420 shoe companies have stopped work, halt or fail.

And some of Wenzhou's stronger local shoe companies have chosen to go out to build factories. AOKANG, Kangnai, BELLE, Dongyi and other strength shoe enterprises have built industrial parks and production bases in Sichuan, Chongqing, Anhui and even abroad.

"We should either shift to the middle and high-end line, or pfer it to the lower cost area."

Wenzhou shoe leather industry association secretary general Xie Rongfang once said.

Wang Zhentao, chairman of AOKANG group, believes that although the number of shoemaking enterprises in Wenzhou has dropped greatly, the scale of individual enterprises has increased.

The pfer of enterprise production lines from coastal areas to the central and western regions is also an inevitable phenomenon in the process of industrial development.

Nevertheless, statistics show that the investment scale of the footwear industry in Wenzhou has dropped sharply in recent years.

Statistics show that in the first three quarters of 2009, Wenzhou shoe leather industry completed a total investment of 625 million yuan, 45.8% lower than the same period last year, and the industry's willingness to invest did not rise with the recovery of production. Instead, it showed a different trend of "one liter and one drop". Industry investment accounted for only 1.4% of the fixed assets investment above the city level, which was much lower than the proportion of output value.

Leaving manufacturing to seek wealth

In fact, the phenomenon of a large reduction in the number of enterprises is not only in the footwear industry.

Huang Fajing, chairman of Wenzhou smoking appliances industry association and chairman of sun Feng lighter Co., Ltd. disclosed that Wenzhou metal lighters, which occupied more than 90% of the country's output, had more than 1000 enterprises at its peak, and now only about 100.

Another industry with obvious advantages in Wenzhou, fastener manufacturing, has lost thousands of enterprises in recent years.

Statistics show that the business sector of Wenzhou once announced that in 2010 alone, more than 2000 enterprises in Wenzhou were revoked business licenses, of which half were manufacturing and associated enterprises.

"Industry is not easy to do, and profits are too thin, so we all think it is better to engage in speculation."

A Wenzhou businessman who made the detection machine told our reporter.

It is true that although Wenzhou's traditional manufacturing industry has created many sales miracles, most enterprises rely on low cost advantages and small profits and quick turnover, and the profits of many industries are only between 3% and 5%.

Coupled with the uncertainty of the foreign trade situation in recent years, as well as the adverse effects of RMB appreciation, rising raw material and labor costs, many bosses of manufacturing enterprises in Wenzhou are lamenting that "the days are getting worse."

In the manufacturing industry is not high at the same time, the property market, the stock market has become a lot of people "rich overnight" arena.

In fact, in Wenzhou, manufacturing enterprises with a certain strength are almost all involved in real estate. Manufacturing enterprises "mix and match" real estate enterprises have become the new "Wenzhou mode".

A group of data can well prove this phenomenon: in 2009, the top 100 private enterprises in Zhejiang province ranked more than 60 private enterprises in other industries involved in the field of real estate development, manufacturing sales accounted for only 60% of the total, down 24% over the same period last year.

In the same year, the investment in fixed assets above the province limits 25.6% of state-owned and state holding investment, while private investment has increased by 13.7%, of which private sector investment in manufacturing has increased by only 7.4%.

Liu Qihong, director of the regional economic research center of Hohai University, recently reported that Zhejiang's capital pursuit of huge profits has restrained its investment in industrial innovation to a certain extent, and the momentum of local economic development has shown signs of failure.

Short board of talents impedes industrial upgrading

There are indications that the traditional manufacturing industry in Wenzhou is about to hit the ceiling.

Without upgrading and pformation, the manufacturing industry in Wenzhou will be weakened.

But how should it be pformed?

"We also want to upgrade and sell products, but we have no experience in the new market, we don't know enough people, and we don't have enough money to invest in them. How can we say that we can turn around?" a businessman who made bags in Wenzhou told our reporter.

The bag dealer once tried to build his own brand to increase the added value of the product, but failed.

In a document on Wenzhou's industrial pformation and upgrading, the government of Wenzhou pointed out that the overall technological innovation capability, raw material constraints, serious shortage of land space, and lack of talent are all bottlenecks restricting the pformation and upgrading of enterprises.

"The lack of high-end manufacturing and emerging strategic industries is still a short board for Wenzhou's development."

Even the mayor of Wenzhou, Zhao Yide, who said "hollow" is too serious, has been so honest.

For example, the pump and valve industry in Wenzhou has less than 10% of new products, and is still far below the average level of 18% of the province's equipment manufacturing industry.

Quite a lot of enterprises choose to move out of Wenzhou, and the scale of investment far exceeds that of local enterprises.

The massive relocation of the manufacturing sector is clearly unstoppable, but Wenzhou wants them to keep their headquarters on the ground.

Wang Zhentao's idea is to put functions such as design in Wenzhou.

But the key factor in developing headquarters economy is talents.

Statistics of Wenzhou municipal Party Committee Organization Department show that in 2009, the total number of talents in Wenzhou was 843 thousand and 300, and the number of talents per 10000 people was 1044, which was only 82.08% of the average level of the province; 90% of Wenzhou's private enterprises, only 40.7 workers per 10000 laborers, and the total number of scientific and technological personnel was obviously insufficient.

Wenzhou's local media lamented, "Wenzhou's talent and economic aggregate are very incommensurate, and the amount of talent is not comparable to that of Ningbo, Shaoxing and Jia Xingyuan."

The shortage of talent is partly due to the fact that local higher education is not well developed, and the two reason is that it can not keep people.

In order to increase attractiveness, Wenzhou has also implemented incentives such as talent housing, schooling for children and migration of household registration.

At present, there are eight major carriers for talent cultivation and development in the city.

In addition to the introduction of talents, Wenzhou has implemented the "return project" of the foreign businessmen, promoting the introduction of Wenzhou enterprises at home and abroad, and capital, technology, talent, resources and projects. "We encourage the well-known experts, scholars and entrepreneurs from Wenzhou to provide intelligent support for Wenzhou's new round of development."