The Shoe Industry'S Low Cost Era Is Over?

After entering the middle stage of industrialization, the contribution of technological progress to economic growth in the broad sense is far greater than the accumulation of tangible capital.

The end of the low cost era shown by the rising food prices shows that China's economic development is likely to have entered Lewis's turning point, and the challenge of a comprehensive pformation of the mode of economic development is pressing ahead.

Since last year, one of the most important concerns of Chinese people is the rise in prices.

In this round of price increases, the more prominent is the rise in food prices.

In 2007, CPI rose 4.6% overall, and the food portion was as high as 11%..

The rise of international grain prices and the large amount of food crops used as bio energy resources are all causes.

But for China, what is more noteworthy is the endogenous nature of this round of rising food prices.

The most important aspect is that over the past 30 years, tens of thousands of rural surplus labor force has been absorbed by the second, third industries of cities and towns.

Since 2004, the "shortage of migrant workers" first in Guangdong and later in other provinces and cities shows this problem.

The reduction of the "industrial reserve force" affects not only the urban industry, but also the direct result of agricultural production.

Although this does not mean that China's total food supply is decreasing, the increase in food demand due to the expansion of China's population base and the increase in food consumption structure affect food prices.

2007 may be the turning point of China's labor structure change beginning to affect food prices.

What kind of results will it bring?

First of all, as seen in the past year, urban residents have to spend more money on food. It naturally forces companies to raise wages for their employees, and the state must provide more subsidies to low-income families.

The minimum monthly wage standard for shoemaking workers in Dongguan, Guangdong has increased from 450 yuan to 690 yuan in the past five years, and the increase has exceeded 50%. in five years. The subsequent impact is the increase in enterprise expenditure and the increase in production costs. This will undoubtedly create strong pressure on labor-intensive industries with low profit margins and low cost.

Last year, there were more than 1000 shoe factories and related enterprises in Guangdong bankrupt, and the main reason was the rising production costs.

Not only the footwear industry, but also other labor-intensive industries such as clothing, toy processing and electronic processing in Guangdong, the current situation is much the same.

The rapid rise of food prices in the past year is a strong signal, which indicates that the era of low-cost China has ended.

In fact, the price increase is not just about food. The price of raw materials supporting China's industrial production has been increasing rapidly in recent years.

Taking oil as an example, the international oil price was less than US $40 at the beginning of 2007, but by the end of the year, it had reached US $99.

When the calendar of 2008 has just opened, international oil prices have exceeded 100 US dollars.

China's rapid economic development in the past, the success of the low end manufacturing industry depends on the low cost advantage.

The low cost first lies in the cheap labor force, and a large number of surplus rural labor force is available.

Secondly, natural resources, land, oil and other mineral resources are all far below the international level.

Third, the environmental cost is very low. Most polluting enterprises have never considered paying for pollution.

However, the above aspects have been or are undergoing qualitative change.

Rural surplus labor force has gradually been absorbed by the urban industry and commerce. It is very difficult to continue to recruit workers with low wages.

The era of low price of natural resources will be gone forever.

In December 24th, when the end of last year, the State Council promulgated some opinions on promoting the sustainable development of resource-based cities. For the first time, it defined the cost structure of future resource products, which will change the price formation mechanism of resource products such as oil, gas and coal in the past.

Regardless of the environmental cost of production, and because of the serious environmental pollution problems, the external pressure on the international community to reduce emissions has begun to be severely restricted by state laws.

It is reported that the environmental tax will be introduced from 2008, and it will be one of the key tax policies promoted by the government.

Under such circumstances, labor-intensive industries and economic development models won at low cost, at least in the southeast coast of China, have been difficult to sustain. Upgrading the technology level, reforming the system of systems and adopting new industrial organizations and so on bear Pete's "innovation" is imperative.

This pressure has already been felt in some provinces along the southeastern coast of China.

Take Guangdong as an example.

A few years ago, Shenzhen put forward four "unsustainable" problems such as "land shortage, shortage of resources, overpopulation and overdraft".

Guangdong's choice is to improve the regional development environment and expand the industrial incremental space, and strive to promote the pformation of economic development mode.

Since the beginning of the new century, Guangdong has decided to join hands with Hong Kong and Macau to build "an important economic center of the world", and build a "Pan Pearl River Delta" economic cooperation zone with the Pearl River Basin provinces. At the same time, it vigorously adjusts and optimizes the economic structure, enhances the capability of independent innovation, and decides to pform Guangdong into "the world's important high-tech research and development base and achievement pformation base".

These efforts have also achieved initial success. In 2006, the contribution rate of Guangdong's technological progress to economic growth has reached 50%. The output value of high-tech products increased from 469 billion 900 million yuan in 2002 to 15548 billion yuan in 2006. Fixed asset investment growth, emissions of major pollutants, energy consumption per unit of GDP, and construction land needed for each additional billion GDP were all falling back in Guangdong.

The mode of economic growth in Guangdong is gradually shifting from the investment in the past to the intensive development road with the upgrading and upgrading of science and technology as the new driving force.

China has entered the middle stage of industrialization.

From the experience and experience of the first developing countries, economic growth is mainly dependent on capital accumulation at the early stage of the development of modern industry, that is, "industrial revolution" or "take-off". After entering the middle stage of industrialization, the technological progress in broad sense contributes far more to economic growth than the accumulation of tangible capital.

The end of the low cost era shown by the rising food prices shows that China's economic development is likely to have entered Lewis's turning point, and the challenge of a comprehensive pformation of the mode of economic development is pressing ahead.