Enterprise Polarization Under Inflation

A garment company outside Dongguan is on the verge of bankruptcy. The remaining dozens of employees are waiting for the final salary.

A person in charge of the company told the China Business Daily reporter that the direct reason was that there was a problem in the capital chain, that it was impossible to get loans from the bank, and the order was reduced by 3. This situation has lasted for 3 months.

Lian Ping, chief economist at Bank of communications, pointed out that after the current interest rate increase, SMEs are greatly affected, and some enterprises in Fujian, Zhejiang and Guangdong have failed.

A report from the Bank of communications to the China enterprise daily said that the economic slowdown will continue to be extended to the three quarter.

"According to the macro data released in the first half of the year, especially the small and medium-sized enterprises are facing three pressures: tight credit, weaker external demand, rising inflation and rising labor costs. The corporate earnings index represented by CPI-PPI and PPI-PPIRM is currently at third negative and downside ranges since 2008."

Guo Lei, a senior macro researcher at Zhejiang Merchants Securities Research Institute, told reporters.

Guo Lei believes that in the second half of the three quarter, when inflation is established, the situation will improve; and the policy is expected to emphasize the structural credit support for SMEs before this policy. Enterprises should effectively grasp policies and use policies.

Big enterprises are stable, and small and micro enterprises are struggling.

Above

"I think it's too bad."

The head of the company said.

This clothing business is obviously not a case.

Public information shows that Guo Zhengzhong, chairman of Humen Yami fashion development company, reflects that "about half of the garment factories have been cut down."

Yin Jianwen, Secretary General of the Dongguan Electronics Industry Association, which has more than 200 member enterprises, said that 2 of its member enterprises have reduced production, and 3 of them are more difficult to operate.

Ren Xinhe, Deputy Secretary General of the Dongguan municipal government, has been in the city for the tenth time.

According to the survey conducted by the Zhejiang investigation team of the National Bureau of statistics, in the two quarter of this year, the Zhejiang SME financing climate index fell to below 100, slipping into the recession area, plus the pressure brought by the rising cost of raw materials, labor costs, capital costs, land prices and RMB exchange rate.

In particular, the total industrial output value and operating profit in the first half of this year increased by only 1% and 4.4%, respectively, especially for small enterprises with a gross industrial output value below 1 million 500 thousand yuan.

Zhu Hongren, a member of the Party committee and spokesman of the Ministry of industry and commerce, said in July 21st that the situation of some small and medium-sized enterprises was relatively difficult recently. Small and medium-sized enterprises, especially small and micro enterprises, were weak in resisting risks and lacking normal financing channels. Production and operation were more difficult in the case of higher energy and raw material prices and higher cost of employment and financing.

Small and micro businesses are unhappy, and the performance of big companies is better.

According to the data released recently by the Ministry of industry and commerce, the industrial economy in the first half of the year runs smoothly and rapidly.

But Zhu Hong frankly admitted that the profit of industrial enterprises increased by 27.9% in the first 5 months, which was mainly achieved by some of the better enterprises in the above industrial enterprises.

Guo Lei told our reporter: "our model predicts that CPI will be between 6.2% and 6.6% in June, so the final 6.4% CPI data are basically in line with expectations.

Pork prices contributed significantly to the current CPI. We calculated that if the pork and pork related effects on eggs and aquatic products were all removed, the CPI would be about 5.8% in that month.

The cycle has gone 26 months, and from the rule of experience, it is approaching the end of the rising period.

Guo Lei said that after July, CPI will obviously slow down, which is a favorable signal for enterprises.

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High cost pressure intensified, corporate profits may end at the end of the three quarter.

Under the pressure of inflation, rising costs have become a headache for enterprises.

"Cotton prices have risen by 50% since last year, and orders must be charged if they are connected."

He Huiyi, general manager of a garment factory in Zhejiang, told the China Enterprise News.

In addition, He Huiyi said labor costs rose by 30% to 40%.

Even in the field of new energy, high cost also brings trouble to enterprises.

A research report by CICC pointed out that the wind turbine manufacturers' gold wind technology is currently troubled by the rising cost of raw materials. "Unless the gold wind can find countermeasures, the comprehensive gross margin of gold wind from 2011 to 2013 will drop sharply to 12.9% to 12.3%.

The rise in cost will lead to a forced increase in the price of gold wind technology. Once the price increases, the market share will be lost and sales will drop sharply.

As the core raw material of wind turbine, the price of NdFeB is more than 10 times higher than that of the same period last year.

Affected by this impact, including Hunan Electric shares, the country's many wind turbine production enterprises have varying degrees of discontinued production.

At present, the increase of enterprise production costs is mainly reflected in three aspects. First, the price increases have further accelerated, and the prices of various raw materials have increased sharply; two, because of the acceleration of industrial pformation, the remuneration of ordinary labor and technical personnel has increased; three, with the increase of land prices, the cost of leasing land and factory buildings has increased significantly.

High cost has made Chinese enterprises encounter difficulties in export.

According to the data released by the National Bureau of statistics, the contribution rate of imports and exports of goods and services to the GDP was 0.7% in the first half of this year and 0.1 percentage points to the point of economic growth.

Export growth has declined for 4 consecutive months.

The report of the Bank of Communications says export growth may slow down in the second half of the year, and the trade surplus will be further narrowed in the year, from $183 billion 100 million last year to about $120 billion this year, and the pull of net exports to GDP will continue to decline further.

Guo Lei told reporters that since the middle of the year, China's economy has gone out of the big cycle and has been in a small period of adjustment.

And after some inflation in the future, the cyclical nature of the economy will be clearer.

At the end of the three quarter, economic and corporate profits may be bottomed out.

There is no doubt that the current situation will force a number of enterprises to be eliminated in the market, and will also force a group of enterprises to upgrade.

A senior Vanward electric recently told reporters that since the 2008 financial crisis, Vanward has realized that to adapt to the needs of overseas markets, it must "make an issue" on high energy efficiency and new energy products.

These products provide more choices for overseas customers, attracting many businessmen from Europe and America to come to consult.

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"Only by persisting in technological innovation and keeping abreast of international market demand can we push our products to the international market.

It's not just about the power of China, but about the creativity of China. "

The company official said.

Many companies believe that they will get better in July.

"Putting a mouse in an empty warehouse, ten days later, the rats did not starve to death.

In many cases, private enterprises are like rats. They always reflect the instinct of survival and bear the loneliness and loneliness that ordinary people can't bear.

In July 13th, Sun Qingyan, chairman of the the Fuchun River group, left micro-blog's attention.

Although many SMEs are struggling to support it, confidence does not seem to be draining away.

Recently, when there were many Zhejiang businessmen attending the meeting, when more than 300 representatives from Zhejiang Province and other provinces were asked "what do you think the company's business situation will be in the second half of the year", 50% of the representatives of Zhejiang businessmen believed that "there will be some improvement".

The optimism of these managers is not unreasonable.

Zhu Hong said in July 21st that he is now actively preparing for the State Council's leading group meeting on SME development and studying policies and measures to further support the development of SMEs.

Guo Lei also believes that the turning point of policy will be later than inflection point.

After the confirmation of inflation trend, there may be some persistent fine-tuning of policies, such as the implementation of loose credit support and other policy support for SMEs, some emerging industries.

In July 21st, the chairman of a large steel company in China also told reporters in an interview with China enterprise daily that as long as he passed through July, he was cautiously optimistic about the future.

State Statistics Bureau spokesman Sheng Lai Yun said that from the first half of the main indicators data, although some of the economic indicators have dropped, but the overall economic performance of China's current situation is good, economic growth will continue to shift from the rapid growth of the previous policy stimulus to self growth.

Judging from the announcement of the performance of listed companies this year, more than 70% of the listed companies' performance is growing.

According to the Bank of communications report, the main task of macroeconomic regulation and control in the second half of the year is to balance the relationship between "lowering prices" and "ensuring growth". Credit operations do not exclude the possibility of partial relaxation.

In addition, monetary policy is expected to moderate fine-tuning and slow down the pace and intensity of monetary policy in the second half of the year.

"I think the main challenge of China's economy in the second half is how to achieve policy orientation and avoid accidental injury.

It is still necessary to maintain M2 lows and restrict money supply; however, how to guide the limited credit to the real economy and small and medium-sized enterprises and encourage enterprises to do business is still a major challenge. "

Guo Lei told reporters.

The head of the above garment enterprises in Dongguan said that the land is still there and the factory buildings are still there. If the economic environment improves, there is a foundation for a comeback.