The Most Severe Time In 20 Years, Who Can Stay In The Pearl River Delta?

The implementation of the labor contract law triggered the pain of the "world factory" that triggered the Domino effect. Thousands of shoe factories went bankrupt, and more than ten thousand Hong Kong enterprises were faced with a wave of closure. More and more small and medium-sized enterprises planned to move away or not to continue.

"30 years Hedong, 30 years Hexi."

January 16th, Foshan Temple car station.

Xiao Hanjun, a migrant worker in Hubei, and seven or eight fellow townsmen waited for a lot of parcels in the cold wind of the station square. Before leaving the bus in the southern city, Xiao Hanjun left the sigh.

Approaching the new year, however, Xiao Hanjun and his party are not going home this new year.

More than half a month ago, their cowboy processing factory in Junan Town went bankrupt, and they collectively evacuated after receiving the final wage compensation.

Next spring, their destination from their hometown will probably be a factory in Suzhou.

Xiao Hanjun, 34 years old, almost wept. He still remembered the excitement and longing of Guangdong when he first came to China 10 years ago.

Now everything is a smoke cloud.

In the first month of the new year, the Pearl River Delta in the winter is experiencing an unprecedented pain: thousands of shoe factories have closed down, and more than ten thousand Hong Kong enterprises are facing a wave of closure. More and more small and medium-sized enterprises are planning to move out of here.

The Pearl River Delta, which once dominated the Chinese economic landscape for many years, will be a history of the lively and brilliant world factory.

It is realistic and historical inevitability to move out and import from traditional labor intensive industries to modern industrial systems.

The process of rebirth is a painful process. What will be the future of the Pearl River Delta where enterprises and foreign workers move?

The Pearl River Delta is standing at a fission crossroads in the times of high pressure, agitation, doubt and confrontation.

The hardest time in 20 years - the quotations from the Pearl River Delta business enterprise "no one wants to go, but there is no way to sustain it."

The RMB continued to appreciate, the price of raw materials increased, the cost of wages increased, recruitment was difficult, export trade was suppressed, and policies were frequently adjusted. Just now, the new labor contract law and the "two tax unification" new policy were promulgated and implemented. "We have hung a knife on the head."

"The operation environment of small and medium-sized enterprises in the Pearl River Delta is just like an increasingly tight network."

"Everything has gone up, making no money, even the workers are hard to recruit."

"The space for development here is getting smaller and smaller."

The labor contract law, which was implemented on January 1 by thousands of shoe companies within one year, gave some enterprises the final palm to decide to move away.

The collapse of shoe companies has been fatal for a long time. The labor contract law is only the last straw. Liang Jiayao's office is hung with a map of Vietnam. He pointed to the location of Yi An county in the southern part of Pingyang. "Next year, our new factory will move here."

No joy of moving.

There was a bit of frustration and helplessness in the Putonghua with Liang Jiayao's hands open.

At the age of 52, he is the owner of a shoe factory in Dongguan. Like many bosses from Hongkong to mainland China 18 years ago, she started factories in Houjie Town, Dongguan, the world shoe capital. However, in the past six months, many of the shoe enterprises around her disappeared, and Liang Jiayao was preparing for his factory.

In January 12, 2008, more than 20 days before the Spring Festival, the Hongkong boss flew back to Guangzhou from Hu Zhiming, Vietnam. The first thing to do was to make a phone call and arrange for the company to discuss the relocation of the factory.

"No one wants to go, but there is no way to sustain it."

In Liang Jiayao's view, the load of enterprises is coming in a chain of "acceleration".

The RMB continued to appreciate, the price of raw materials increased, the cost of wages increased, recruitment was difficult, export trade was suppressed, and policies were frequently adjusted. Just now, the new labor contract law and the "two tax unification" new policy were promulgated and implemented. "We have hung a knife on the head."

Liang Jiayao did not deny that the labor contract law, which was implemented on January 1, is the last palm to push him to decide to eventually move out.

At the end of 2007 before the implementation of the new law, the shoe factory basically went out of business, and more than 600 employees were disbanded nearly 2/3.

Liang estimates that if the labor contract law is applied, the cost of labor in shoe factories will increase by 20%, which is unbearable for shoes factories that are overburdened with profits and hovering around 8%.

"Now the frequent movement of workers is not only trouble but also death."

"In Dongguan, about 200-300 of the 1000 shoemaking enterprises went bankrupt."

Asian Footwear Association Secretary General Li Peng said.

Dongguan is only a corner of the Pearl River Delta. Li Peng said that Guangdong shoe manufacturers mainly concentrated in Dongguan, Huizhou, Guangzhou, Heshan and Zhongshan, and there were 5000-6000 altogether.

Over the past year, more than 1000 large and medium-sized shoe companies have been closed.

There are more than 3000 shoe factories in Huidong, where shoes companies are more concentrated. In the past two or three months, four hundred or five hundred small and medium-sized shoemaking and shoe factories have been closed.

Jin Fei, manager of Dongguan Hong Teng shoe factory, told reporters that the new year is coming, and many shoe factories that are still in the process are considering the same problem: closing or moving?

He expects a large number of shoe companies to close after the Spring Festival.

The reason why shoe companies are in a large area of collapse is that Jin Fei does not agree with the new law.

He believes that the fatal thing is the "internal injury" that the enterprise has suffered for a long time. The labor contract law is only the last straw.

The so-called "internal injury", Jin Fei said, the Pearl River Delta more than 80% of the shoe enterprises still rely on the "low cost, low profit" processing trade mode, always at the bottom of the price chain, the profit is only between 5%-8%.

In recent years, a series of raw materials, wages, hydropower, factories and other costs rose rapidly, "before the implementation of the new law, most shoe enterprises are at their last gasp."

Jin Fei said that most of the early closed businesses were low-end shoe companies, some of which were moved and moved to the inland provinces or Southeast Asian regions where labor force and production cost were lower.

This statement is supported by the association of Asian footwear industry. The Association statistics show that about 25% of the closed shoe enterprises have moved to Vietnam, Thailand, India, Indonesia, Malaysia and other places in Southeast Asia, and about 50% have moved to the mainland provinces such as Jiangxi, Hunan and Guangxi, and about 25% are still watching.

More than 10000 Hong Kong funded enterprises feel sorry for the new year?

According to industry analysis, there will be close to 1.2 employees in the Spring Festival before and after the closure of small and medium-sized enterprises with less than 200 employees. Among them, the retreat of the footwear industry mainly based on Hong Kong funded enterprises is only a microcosm of the collective migration of the manufacturing industry in the Pearl River Delta.

Dongguan economic and Trade Bureau told reporters that in the traditional manufacturing industry, such as clothing, textiles, plastic products, electronic components, metal and non-metallic products, there was a large-scale withdrawal of enterprises.

Over the past month, journalists have visited Dongguan, Foshan, Guangzhou, Zhongshan and other places. Some of the old industrial parks which are popular with people are now deserted, and many factories are left empty.

In January 6, 2008, Zhu Yongxin, a 11 year old garment factory in Zhangcha, Foshan, received a contract from Zhuzhou. He was planning to move the factory to Hunan's Changsha Zhuzhou Xiangtan economic zone after the year.

"Everything has gone up, making no money, even the workers are hard to recruit."

Zhu Yongxin said that the copper produced in 2004 was still more than 20 thousand yuan and a ton, and now it has risen to more than 60 thousand yuan per ton.

In February, it used to be 60 yuan a barrel, and now it rises to 75 yuan.

Recruitment, two years ago was 600 yuan to 800 yuan of wages, now rose to around 1200 yuan, technical workers to 1500-2000 yuan, which is still unable to recruit people distress.

"Especially in the last two months, our garment factories have closed a lot."

Guangzhou Taihe Town, where Qiu Lin, the owner of the handicraft factory that has been exporting for more than 10 years, is also planning to move the factory to Africa.

"We mainly export to the European Union, and the cost of raw materials and labor in Africa is much lower."

Resin based raw materials in the Tai Chi craft factory, resin in 2000 is 5500 yuan a ton, now up to 14000 yuan per ton.

"Let go of raw materials and wage costs do not say that we can still" hard to swallow ", but this year's continuous policies have forced us to the crater.

The suicide of Zhang Shuhong, a toy dealer in Foshan in 2007, has brought pressure and panic to the toy craft enterprises, and then various restrictive policies followed.

In July 1, 2007, the export tax rebate policy for some commodities was adjusted; in July 23rd, the "No. 44" ("processing trade Restricted Commodities List") was promulgated, and the export of 1853 processing trade such as textiles and furniture was limited; at the end of December, a list of prohibited categories of processing and trade of the 589 new products was announced.

On January 1, the labor contract law and the "two taxes combination", Qiu Lin said, directly led to many of his colleagues closed down, "the remaining 1/3 is less than that, and it is much more shut down than moving away."

A survey of Hong Kong businessmen in the Pearl River Delta region by the Hongkong Federation of industry shows that 37.3% of the 8 Hong Kong enterprises in the Pearl River Delta are planning to move all or part of their production capacity away from the PRD, and more than 63% of them plan to move out of Guangdong.

A Taiwan investment company predicts that labor costs will increase by 8% in 2008. Many Taiwanese enterprises will be pferred to inland provinces or Vietnam, and hundreds of small investment factories in Dongguan and Shenzhen will be closed next year.

Chen Yonghan, President of Shenzhen Association of processing trade enterprises, also said that many enterprises believe that this is the most serious moment in the past 20 years. They are facing many pressure factors such as environmental protection requirements, workers' minimum wage increase, tightened trade policy, bank stop lending, shortage of migrant workers, tight electricity supply, labor contract law and local government's urgent industrial upgrading and pfer.

Chen Yonghan said that according to this situation, there will be nearly 1.2 employees in 200 or less small and medium enterprises close down before and after the Spring Festival.

Liang Bai, director of the Hongkong economic and Trade Office in Guangdong, also predicted that in the next two years, the 80 thousand processing trade oriented enterprises in the Pearl River Delta will face a life and death decision.

He appealed to Hong Kong enterprises to pform, upgrade or pfer as soon as possible, and the sooner they act, the better.

Domino collapse chain analysis of the head of a packaging factory in Dongguan, a large area of business failures or relocation, the Domino effect is taking shape, after the Spring Festival, "collapse shock wave" will become more and more obvious.

1 more than ten thousand factories are closed down, and 20 small factories will be affected.

January 10, 2008, Dongguan town hall.

A cardboard box worker posted a new advertisement on the pole near the vegetable market. "Because of the company's other development, there is a shortage of cash flow."

The whole plant is sold at a low price.

Guo Tingting, the owner of the carton factory and Sichuan people, told reporters that the factory used to provide carton packaging for Dongguan, Shenzhen's shoe factories, garment factories, electronics factories, and so on. The customers whose previous business were relatively regular had recently collapsed, and the orders for the carton factories were suddenly reduced and forced to be pferred.

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