The Advantages Of The "Wenzhou Model" Are &Nbsp, And Shoes And Clothing Enterprises Seek Pformation Through "Crisis".

Although the official has repeatedly denied it, there is an anecdotal comment.

The "Wenzhou model" that has lost its dominance

Wenzhou is regarded as a sample of China's private economy.

In the 80s of last century, starting from the family workshop of "former shop and post factory", Wenzhou people occupied small commodities with low cost and low technology.

In the next 30 years, this mode carries the heavy responsibility of Wenzhou's economic development.

But in recent years, due to overcapacity, labor costs, land, raw materials and other costs rise sharply, the appreciation of the renminbi and other factors, the advantages of the traditional Wenzhou economic mode is disappearing.

Buttons, clothes, switches, leather shoes, lighters and other small commodities started in Wenzhou.

Lighter is a microcosm of Wenzhou's industry.

In Wenzhou, 2001 was the most prosperous period of the lighters industry, and there were nearly 5000 lighters in the city.

Metal lighters occupy 80% of the world's market share, but 10 years later, Wenzhou lighter enterprises are already less than 100.

Li Zhongjian, general manager of Wenzhou Dongfang Light Industrial Co., Ltd., said that in the early years, a lighter could earn 10 Fen, but now it can't even earn a penny.

The lack of independent intellectual property rights and low added value, coupled with the rise in labour, raw materials and energy prices in recent years, further reduced the profit margins of lighters.

The collective fall of Wenzhou lighters can be said to be a microcosm of Wenzhou's industrial change, and a true portrayal of Wenzhou's traditional manufacturing industry.

The decline is not just in the lighter industry.

According to the statistics of Wenzhou Federation of industry and commerce, in 2003, there were 4000 shoe making enterprises in Wenzhou, and more than 1000 were shut down.

Huang Fajing, chairman of the Wenzhou Municipal Committee of CPPCC and President of Wenzhou cigarette Association, conducted a survey on "relocation of enterprises and improvement of investment environment" in Wenzhou last year. The results show that Wenzhou has lost its advantages no matter land resources, labor force, raw materials, and other institutional resources.

Zhejiang Suye bird Shoes Co., Ltd. is a women's shoes manufacturer integrating R & D, production and sales, with an annual output of 3 million pairs.

In the more than 2500 existing shoemaking enterprises in Wenzhou, the scale is not large.

Liu Xiaobiao, the company's boss, started his business at the age of 17, but is still under 30 this year.

Liu Xiaobiao said that since the end of last year, a ton of shoe sole material has risen three thousand or four thousand yuan, equivalent to a pair of shoes shoe sole material cost will increase 3 yuan.

The price of glue doubled and the wages of workers increased by 20%.

When electricity is the most intense, it needs to generate electricity by itself two days a week, with an average cost of 1.5 yuan for each pair of shoes. "At ordinary times, the electricity cost per pair of shoes is 1 yuan."

A special survey conducted by the Wenzhou Municipal Bureau of statistics in June shows that small and medium enterprises, especially small businesses and high energy consumption enterprises, are the key objects of power cuts.

Meanwhile, the price of diesel in June increased by about 15% compared with the same period last year, and the cost of generating electricity increased.

Moreover, "due to rising prices, the relative reduction of migrant workers and the continuous growth of employment demand of enterprises, Wenzhou enterprises'" recruitment difficulty "has continued since the Spring Festival."

About 16% of the surveyed enterprises believed that financing was very difficult.

The difficulty of financing directly increased the financial cost of enterprises. In 1~5 months, the financial expenditure of Industrial Enterprises above designated size increased by 43.6%, and interest expense increased by 46.1%.

In addition, raw material prices continued to rise.

From 1 to May, the purchase price of raw materials in Wenzhou increased by 8.4% over the same period last year.

"The high interest rate of private lending is only the last straw to crush the owners of small and medium-sized enterprises."

Zhou Dewen said, in fact, all kinds of heavy burdens have already made enterprises "physically unable to support". Behind the chaos of private lending, it reflects the hardship of industry and the profitability of small and medium-sized private enterprises.

There is a widely quoted case: a boss has a staff of more than a thousand people, and he works hard at the factory for a year, with a profit of less than one million yuan.

The wife of the boss invested in the property market in Shanghai, bought 10 suites, and gained more than 30 million yuan in 8 years.

Wenzhou people experience the appreciation of capital appreciation, such as speculation, fried coal, fried minerals, even red wine and fried artworks. Many private enterprises, who rely on industry and start to "escape" the real economy, take the initiative to enter the capital market.

A business executive said that manufacturing profits were getting thinner and thinner, while the high cost increased the pressure of business operation, and also accelerated the withdrawal of funds from the real economy.

According to the data of the Wenzhou central sub branch of the people's Bank of China, more than 90% of Wenzhou's private lending in 2004 was inflow into the real economy, and this year it has shrunk to 35%.

According to the survey conducted by Wenzhou finance office on 324 enterprises in 2010, there were 119 investments outside the main business in 2008, up to 138 in 2009, and 163 in the first quarter of 2010.

"Made in Wenzhou" examines "made in China"

"When the profit generated by the capital field is far greater than that of the manufacturing industry, the capital will be away from the real economy."

More than one industry told reporters.

In the eyes of many economists, we can see "made in China" from "made in Wenzhou".

The survival of SMEs in Wenzhou not only shows the plight of Wenzhou businessmen, but also reflects the fate of SMEs in China's economic fluctuations.

It is understood that from 1998 to 2008, the profit growth rate of China's general industrial enterprises was 30.5%.

But the formation of this high profit is largely due to the distortion of factor resource prices, low labor costs, low land costs and low environmental costs, making China a "depression" for capital to acquire value.

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The "Wenzhou mode" of intensive, low cost, small profits and quick turnover is the epitome of China's economic development mode.

With the development of the world economic situation, the competition of labor-intensive industries such as small profits and quick turnover is becoming increasingly fierce. The emerging economies in Southeast Asia, like their low cost labor resources, preferential policies for exports and trade preferences of importing countries such as the United States and the European Union, are beginning to squeeze the Wenzhou enterprises that relied on small profits but quick turnover.

Nike, one of the world's largest sporting goods manufacturers, reported in the fourth quarter of last fiscal year that Vietnam has become Nike's largest production base, and this position will also be maintained in 2011.

"The price of human resources in China is rising, and more and more international manufacturers are moving their factories to Southeast Asian countries with cheaper labor."

Wenzhou a shoe enterprise boss said.

An Asian shoe acquisition center manager who supplied WAL-MART, Carrefour and other large supermarkets told reporters that he had orders for 8000~9000 million a year, and most of the orders were completed in Wenzhou, and this year's orders are close to 80% for India and Vietnam.

In the eyes of scholars who are concerned about Wenzhou's economy, the problems of Wenzhou enterprises appear on the surface of Wenzhou's small and medium-sized enterprises, which have been closed down due to the fragmentation of capital chains. In fact, the deep-rooted root lies in the fact that Wenzhou's economic production mode has begun to marginalized along with the rise of the world's new economy (310358, fund bar).

In recent years, the Wenzhou industry, which has the path dependence of the export oriented economy under the dividend policy, has become very weak. The supporting factors are insufficient, the bottlenecks of innovation and the pressure of industrial upgrading have caused a large number of industrial enterprises to move out.

Statistics show that from 2006 to 2010, Wenzhou's capital invested 300 billion yuan in all parts of the country, while in the same period, only 130 billion yuan was invested in Wenzhou's local industry.

"Events are just catalysts."

Some people in the industry believe that the fundamental problem of Wenzhou enterprises is not the fragmentation of the capital chain reflected on the surface of the event, as well as the simple loan to the people behind the usury.

Data show that in the past 10 years, the investment rate of Wenzhou has always hovered between 31%~37%, 13.6 percentage points lower than the average level of the Yangtze River Delta city, and the growth rate of investment is 10.6 percentage points lower than that of the Yangtze River Delta.

In the 11 cities of Zhejiang Province, Wenzhou ranked third in the GDP per capita.

In the first three quarters of this year, the whole city of Wenzhou completed 112 billion 500 million yuan in fixed assets investment. In terms of total investment, Wenzhou ranked fifth in Zhejiang, half of Hangzhou and 3/5 of Ningbo. "This is not commensurate with Wenzhou's position and role as the first largest city in the province and the third largest city in the economy."

Chen Derong, vice governor of Zhejiang province and Secretary of Wenzhou Municipal Committee, said frankly.

"Wenzhou is not short of capital. It lacks the spirit of industry."

Wenzhou officials believe that Wenzhou's private lending crisis is also a risk warning for China's economy. The status of "made in China" has been changing for 10 years in the world market, and the "golden age" that relies solely on low cost advantages has been over.

Seeking pformation and upgrading by "crisis"

Whether official or private, many people believe that the fundamental way out for the Wenzhou issue lies in the return and upgrading of manufacturing industry.

An economics professor at Wenzhou University thinks that solving the financial chaos of private lending in Wenzhou, opening up informal financial regulation and making private lending "regularized" is only a short-term emergency strategy.

In his view, the private credit crisis in Wenzhou has both the reasons why the local surplus funds are concentrated to the usury industry and the natural elimination brought about by the industrial upgrading of Wenzhou's local SMEs. There are reasons for supply, there are also reasons for demand; there are both policy factors and institutional causes.

"At the critical moment of economic pformation."

Zhou Dewen said that China and the world have already said goodbye to the scarce economy. In the era of surplus economy, a large number of commodities are surplus. Only by pformation and upgrading can Wenzhou enterprises maintain the greatest interests.

"The general manufacturing industry is moving out of China, which is an inevitable labor pains in the process of China's industrial upgrading."

In fact, the other emerging economies in the world have experienced such pains in the process of pformation to the moderately developed economies, said the head of the Wenzhou Footwear Association.

It is reported that in order to control the cost of manpower, Nike has been relocating its main production base in the past 30 years.

It was first in Japan, then in Korea, in Taiwan, China, and later in China's Hongkong and Philippines, Malaysia and Thailand.

China became a new factory in Nike in 1981.

Until 2010, Chinese manufacturers had been Nike's largest partners, but after 2010, this "throne" was taken away by Vietnamese.

Wenzhou's crisis today is also a microcosm of China's economic model.

Zhou Dewen said that pformation and sustainable development are not only aimed at Wenzhou enterprises, but the current economic development situation has forced Chinese enterprises to pform themselves: upgrading industrial value chains and jumping from traditional industries to high value-added industries.

In response, Zhao Hongzhu, Secretary of the Zhejiang provincial Party committee, said in an interview with the central media in October 21st that Zhejiang will focus on the long term to help enterprises pform and upgrade and form a rational investment oriented and healthy development mechanism.