Dongguan SME Financing Pressure Highlighted &Nbsp; Well-Known Companies Bankrupt Workers For Wages

In July 19th, workers packed their bags from the newly closed Dongguan suitcase.

Get in arrears, find new jobs, start a new course of work...

"Now I have left Ding Jia, and I am working in a garment factory in Humen.

I am sorry to say that I have worked there for eight years. "

A migrant worker who worked in warehouse keeping in Ding Jia said he thought that the failure of such a textile enterprise had shown that many enterprises in the same industry were having a bad time.

Not long ago, Ding Hao, a well-known textile enterprise in Liaobu, Dongguan, went bankrupt as the second largest toy in the world.

In this regard, Dongguan labor department staff said that workers working in local SMEs do not need to panic. The failure of individual businesses is not a common phenomenon. Workers who are not paid due to factory closures have tried to co-operate well, hoping workers can reflect problems through normal channels, instead of taking extreme actions.

Frequent wage claims

In July 15th, the news of "running away" of Korean executives of Dongguan Su Yi Toys Co., Ltd. (hereinafter referred to as Su Yi) was confirmed.

This is another big toy business that went bankrupt after the collapse of the world's largest toy manufacturer, Jun Jun toys in 2008.

"The factory has been doing well in the past, and the workers are paying too well.

The boss also wanted to open factories elsewhere. "

According to vegetarian middle managers.

Founded in April 1, 1992, it is a wholly owned South Korean company specializing in the production of plush toys. Its products are sold to Japan, the United States and Europe, with an annual sales volume of US $30 million.

The company has 3 branches in Dongguan and Suzhou, and Dongguan is one of them. The other two are Suzhou Su Yi Toys Co., Ltd. and Dongguan children's products Co., Ltd.

And earlier, in Liaobu.

On the day of confirmation of the factory closures, the city government promised to respond to all employees at 10 a.m. on July 18th.

On the 18 day, a notice entitled "Dongguan Dongcheng District pear Chuan joint stock economic cooperative" was posted at the front door of the prime minister's office. It was said that the workers' wages will be paid by the factory leasing company, Dongguan Dongcheng District and the pear Chuan share economic cooperative. The factory will no longer provide accommodation in the afternoon.

According to the staff of Dongguan Labor Bureau, the leasing company of Dongguan, Dongcheng District, Dongcheng District, Sichuan Province, has paid the wages of employees from 70% to July 13th, and all the employees who have not paid wages have already received their wages.

When the reporter called the Dongguan Federation of trade unions, when asked about measures to protect workers' rights and interests, the people concerned did not give specific answers.

Financing is difficult.

The encounter between toy industry and textile enterprise highlights the difficult situation of Dongguan's small and medium-sized enterprises.

The price of raw materials is rising, the wages of workers are rising, and even people can not be recruited. The appreciation of the renminbi has led to a decline in export profits.

The small and medium enterprises with low profits originally made worse.

In June 23rd, Zhang Wenxian, director of the Guangdong provincial SME Bureau, attended the press conference held by the Guangdong provincial government information office, "the joint promotion and pformation and upgrading conference of Guangdong and the well-known private enterprises of the whole country". At present, the management difficulties of small and medium-sized enterprises have indeed been increasing gradually. There are some financial pressures in Guangdong's small and medium-sized enterprises, and some new difficulties are encountered.

"Difficulties include larger overall costs and larger liquidity gap, and some enterprises are afraid to take orders."

At the same time, some industries also reflect that profits are declining or even losing money.

Zhang Wenxian used "one plus one minus" to describe the financing pressure of small and medium-sized enterprises: the reduction of capital supply and the increase of financing cost.

The small and medium-sized enterprises in Dongguan are mostly rough processing enterprises. The system is not standardized, the management level of enterprises is relatively low, the financial reports are not standardized and lack credibility, and the financing risk of SMEs is too high. The banks are reluctant to make loans to small and medium enterprises from the cost and risk of loans.

{page_break}

In June 7th this year, the CBRC issued a notice on supporting commercial banks to further improve financial services for small enterprises. It called for greater support for small business loans with a single amount of less than 5 million yuan (including). At the same time, from the data of bank credit in the first half of Dongguan, Dongguan's credit supply increased steadily. In terms of investment, loans were mainly invested in manufacturing, wholesale and retail businesses, and the loans for leasing and business services were reduced.

However, is it really so easy for SMEs to finance?

"Almost all small and medium enterprises have not applied for loans in the bank," Xiao Senlin, chairman of Dongguan's hare generation toy company, bluntly said. "Financial institutions are" fond of poverty and love for wealth ". At present, enterprises need funds from their own business, plus loans from relatives and friends.

According to Mr. Xian, who is engaged in furniture industry, nearly 90% of the small and medium enterprises in Dongguan are now facing the difficulties of shortage of funds, so they will also use other methods to ensure the circulation of capital, that is, through raw material interchanges, "it is to exchange raw materials to offset the shortage of funds in part, so that at least 30 days can be operated without cash".

Mr. Sheng said that good operation is a virtuous circle, but if there is a problem, if there is an enterprise collapse, it will probably involve many suppliers, and so on. It is very dangerous.

Although there is not a large number of business failures now.

Many deny the "collapse tide".

In May this year, ~6 months, there appeared news of the closure of private enterprises in Jiangsu and Zhejiang provinces and Guangdong.

Some businessmen in Dongguan predict that the closure of the Dongguan plant will probably occur in the second half of the year.

However, many agencies such as the Ministry of industry, the Banking Regulatory Commission, the Zhejiang provincial SME Bureau and the Guangdong SME Development Association have denied that there has been a collapse, and only acknowledge that there is a subjective and objective difficulty in the survival of SMEs.

Huang Yi, director of the Dongguan municipal SME Bureau, responded to some of the current business failures. "This may be just some individual phenomena, but it needs to be understood again."

Chen Yaohua, President of Dongguan textile and garment industry association, predicted that the total number of failures or closures would not exceed 10%.

According to Jiang Lin, director of the Department of Finance and taxation of the Dongguan Institute of economics in south of the Five Ridges, who has long studied the economy of Dongguan, he has long observed the Dongguan enterprises. He believes that some enterprises in Dongguan may not be the "closed down" state that the outside world sees.

Jiang Lin explained, "a lot of enterprises that encounter problems in Dongguan are not in a normal state of operation, but they are not bankrupt. Enterprises are in a state of stoppage and shutdown, half stoppage and half stoppage."

Among them, shoemaking or textile enterprises bear the brunt. These enterprises are highly sensitive to rent and labor, and the requirements for technology are not high. These enterprises are not necessarily bankrupt, they may be moved to other places, and the labor-intensive enterprises are more vulnerable.

Jiang Lin finally said that the total economic volume of Dongguan is quite large and will not be affected by the closure of some enterprises in the near future.

Chen Xiangyou, vice president of the Dongguan toy industry association, also denied that the collapse of the tide has been said. He said that every year there are businesses failing, and every industry will have such a phenomenon. At present, there are only one or two failures. It can not explain any problems. "The toy industry in Dongguan is like the past, and there has been no great turbulence."

Jiang Ling, member of the Standing Committee of the Dongguan Municipal Committee and vice mayor, made a targeted response to the "collapse tide" in the twelve plenary session of the eight municipal committee.

He said: "the failure of the Su Yi toy factory led the media to associate with the closure of the Hejun toy factory at the beginning of the financial crisis, and deduced that this may be a sign of the second business failure in Dongguan after the financial crisis.

Such logic is normal and understandable, but this is not the case. "

Jiang Ling spoke with the data: in the first half of last year, Dongguan's import and export was the best in history, and import and export in the first half of this year also increased by 14.1% over the same period last year.

In addition, the utilization of foreign capital increased by 78.7% in 1~6 months.

"What does this increase mean? If an enterprise fails to do business, it will not increase investment.

The choice of enterprises to invest in Dongguan also shows that Dongguan's current situation is obviously far better than that of other regions.

The actual situation is that the RMB appreciation has exceeded 5 percentage points from last June to now, but the enterprise has not collapsed in large areas.