The Collapse Of Labor Pains Spawned Production Opportunities For Textile And Shoemaking Enterprises

Some enterprises fail to say that the whole industry is in decline.

Recently, reports of "domestic 1/3 textile enterprises are facing closure", "thousands of shoe making enterprises in Guangdong have gone bankrupt or moved out", and "a large number of Korean capital left in the middle of the night" has been flooded with reports. Many people believe that this is a signal of major changes in the macro-economy this year.

The industry believes that, due to the rise in labor costs and the impact of national macroeconomic regulation and control, at present, light industry and textile enterprises are facing great pressure, but it is a fact that only a few enterprises fail.

Jiang Zhe, vice president of the China Textile Import and Export Chamber of Commerce, said: "low labor costs and high proportion of bank credit are the two major advantages of China's light textile industry development. But in 2007, the exchange rate increased by 7 percentage points, the labor cost increased by 20%, the export tax rebate reduced by 2 percentage points, the production data rose by more than 5%, and the interest rate rose 1.5 percentage points.

Affected by this, the average cost of light textile enterprises rose by more than 15% in 2007, and the textile enterprises suddenly lost their cost advantages.

"Since 2007, the textile industry has felt the pressure of credit crunch.

Banks generally refuse to continue lending to the industry which is heavily affected by macroeconomic regulation, with added value and generally low profits.

Many enterprises have already used up the loan amount in 2008. "

Sun Ruizhe, vice president of China Textile Industry Association, said.

"RMB appreciation and rising labor costs are hard to avoid in all industries.

Last year, the export tax rebate rate of textile and light industry decreased by only 2 percentage points, while other industries were generally 4 percentage points or even 8 percentage points. Why can other industries survive and the textile industry can not survive?

The problem is on the upgrading of industrial structure.

An expert from the national development and Reform Commission's industry division put forward different opinions on the many people who blamed the dilemma of the textile industry on macro regulation and control.

Du Yuzhou, President of China Textile Industry Association, said that the entry threshold of China's light textile industry is very low, and it is a small and medium sized enterprises that get together and have serious excess capacity.

According to statistics from the textile industry association, there are 4 Enterprises above Designated Size in the domestic textile and garment industry, plus a large number of small businesses, the total number may be close to one million.

The vast majority of enterprises are engaged in OEM processing, without their own brands, nor have their own R & D designs. The technical content and added value of products are very low, and the profits of many small and medium enterprises mainly come from tax rebates.

Because of the serious excess capacity, enterprises can only seize the market by pressing each other down, and silently suffering from the risk of loss.

In 2007, China exported 8 billion 850 million pairs of shoes, accounting for 70% of the world market share, and exported textile and apparel 171 billion 180 million US dollars, accounting for 1/4 of the world share, but the profit margin of the industry was less than 1%.

When costs increase substantially, those small, low profit and underfunded enterprises are hard to sustain.

The opportunity to "shut down is, after all, a minority and will not threaten industrial safety". According to Li Peng, Secretary General of the Asian Footwear Association, "there are more than 5000 shoe factories in Guangdong in 2007. If there are ancillary industries, there will be more than 2.

The total production capacity of shoe manufacturers in that year only accounted for 10% of the footwear industry in the province, and was not as good as a leading enterprise.

"The main form of relocation is to set up factories in the mainland instead of the whole relocation," said Wang Ying, Secretary General of the China Light Industry Products Import and Export Chamber of Commerce. "The cost of land and labor resources in coastal areas is relatively high, but the supporting capacity, logistics level, sales channels, and R & D design are still far ahead.

An export-oriented enterprise moving to Hunan, Jiangxi, Anhui and other places can reduce labor costs by 20%, but logistics costs may increase by 2 to 3 times.

We should respond to the fact that although most enterprises are living without worry, the situation in 2008 is still very grim, and some policies seem to be readjustment.

Jiang Zhe said.

Enterprises are strongly reflected in the excessive appreciation of the exchange rate and the labor contract law.

Just after the new year, the exchange rate of RMB against the US dollar has exceeded 1: 7.15, close to the first 6 months of last year, and many enterprises have not expected it.

Beijing copper bull company lost 1 million 530 thousand yuan.

According to the labor contract law, the enterprise will pay 2 times the salary for overtime work, and the holiday will pay 3 times the salary. Now the enterprise is working overtime 1 - 2 hours, which is equal to more than 25% of the salary.

Nowadays, enterprises generally pay work-related injury insurance and medical insurance to workers. If they want to pay five risks and one gold as urban household workers, the labor cost will increase by more than 40% this year.

Enterprise development can be said to be difficult.

In view of the difficulties faced by the textile enterprises at present, enterprises strongly urge to slow down the pace of RMB appreciation, no longer introduce policies to reduce export tax rebate, and give labor-intensive industries a certain pitional period in implementing the labor contract law.

"If we don't do this, we can't afford to fail the 1/3 business this year."

Feng Guixiang, general manager of copper bull clothing import and export company, said.

Experts from the national development and Reform Commission suggested that the state should increase support for credit, taxation and exhibitions to encourage exports of independent brands and independent intellectual property products, including further lowering the import tariff level of some advanced equipment in the textile industry, and upgrading traditional industries with advanced technology.