The Epitome Of China's Manufacturing Transformation

The lean middle-aged man holds a granddaughter with bare arms in his arms and a line of string on the other arm. He is thinking about the future of his family workshop in Zhili, China's children's clothing.

Mr. Song, who does not want to reveal his name, is an inevitable victim of China's maturity. He worked as a farmer, worked in a factory, and eventually opened a children's clothing factory. But as China moves towards the value chain, High-end At the moment, he must find another way to make a living.

Mr. Song's workshop is located in a dilapidated village in the suburbs of Zhili. Pointing to his living room, he said, "when I become a farmer, I can't live, so I came here, but the workshop can barely survive." Mr. Song's 7 relatives worked in this workshop. They spent one hour bending around the sewing machine for 12 hours a day, producing and supplying the country. market Cheap clothing 。

In the vision of the Chinese Communist Party for its manufacturing industry, it does not include such a workshop: Chinese leaders hope that China will no longer produce cheap goods, but start inventions. But at the age of 46, Mr. Song is no longer young. He has little money and no education. He can not climb the value chain established by the economic planners.

He and his neighbors still retain their old models. Because of rising costs and squeezed orders, their margins are very small, and whether they can survive will be a problem.

Last month, the local government doubled the tax of 300 yuan (US $47) per sewing machine, which made them worse. This "head tax" has increased 6 times in two years.

Some people suspect that the local government wants to force family workshops to go bankrupt by means of Taxation, because large factories are short of labor and require individual owners to work for them.

Others believe that tax officials intend to misappropriate income tax, because the latter refuses to issue receipts. In either case, tax increases have made residents angry. After several days of riots broke out, the local government made concessions and abandoned the planned tax increase.

Similar protests have spread throughout China as the Chinese economy slows. The latest time is in Wukan village in southern China, highlighting the economic plight of the public in some areas.

The government's abandonment of tax increases does not help solve Mr. Song's problem. His rent almost doubled over the past two years. At the same time, due to inflation, unseasonable warm winter and possible economic recession, the demand for low-grade winter jacket produced by Mr. Song has dropped dramatically. When Mr. Song returned to his hometown in Henan next January, he would look for a cheaper place to do business.

Mr. Song asked with a wry smile, "business, what business?" this Henan people came to weaving because he heard that they could live a good life here.

Others have already walked ahead of Mr. Song, the Chinese government's intention to disrupt the pattern of its own economy and the impact of the global financial crisis, which has led to successive economic emigrants, both of whom have moved to the Zhili and also from here.

After the financial crisis hit China's export sector in 2008, more than 1000 children's clothing manufacturers moved from the export hub of Guangdong and Fujian to weaving mills to produce clothing for the domestic market. With the support of the surge in domestic retail sales, Zhili town has flourished and accepted migrant workers from neighboring Anhui. But fierce competition has pushed up local rents and labor costs, leading to a wave of withdrawal from weaving.

Zhang Xiaobo, International Food Policy Research Institute, studied the local economy in Zhili. He thought it belonged to the natural order of China's economic maturity.

Zhang Xiaobo said, "the future of these family workshops will be in Anhui", where the local government is providing tax and other incentive policies, and "weaving will become a logistics center". Meanwhile, the larger factories in Zhili will enter the high-end market.

Guo Hong, owner of Huzhou East Knit Dress Co, said that she was investing in innovation so that the company could enter the high-end of the value chain, said East. So far, to do this, it seems that we only need to subscribe to Korean and European fashion magazines and copy their designs.

But as Chinese consumers become more and more critical, Guo Hong has no choice but to increase R & D. "If your product is good, you can sell it, and on the contrary, you can't sell it," she said.

As China's economy matures, China will need not only people like Mr. Song, but also people like Guo Hong, but they are not necessarily in the same area. China's world factory is developing, and the pressure and tension brought by migration may deteriorate further, and then things will improve.