Ask Pearl River Delta Shoe Enterprise "Close Down Tide"

Behind the "cold winter" of processing trade in the Pearl River Delta is market pressure and active regulation. In half a year, thousands of factories have been closed down in the Pearl River Delta, which is trapped in high cost and increasingly strict supervision. The profit margins of labor-intensive enterprises have been seriously squeezed. The new labor contract law, increased tax burden on foreign-funded enterprises, and constantly strengthening the RMB exchange rate...... Multiple factors forced these factory owners to abandon factories and evacuate them collectively. The low value-added processing trade is facing more and more difficult predicament: the pessimistic enterprises in the toy, shoemaking, textile and garment industries expect that more than 1/3 of the industry will be eliminated this year. However, this result may be exactly what the government wants to see. A Ministry of Commerce official told reporters last Friday that the special investigation conducted by the foreign trade division just showed that the collapse of business in Guangdong did not hurt the overall situation. The industry is mainly labor-intensive industries such as shoemaking, textiles, clothing, toys and furniture, while the export machinery and IT have not been affected, the person said. In the Dongguan Fu'an dyeing and printing plant, which just closed down in February 29th, the industry saw the shadow of regulation. The plant is a wholly owned subsidiary of Futian group, a listed company in Hongkong. In 2006, Fu'an was investigated by the State Environmental Protection Administration and the Guangdong provincial environmental protection department for about 10000000 tons of illegal discharge of over standard waste water within two years. This is a great annoyance for Dongguan to lose its face. A textile industry in Guangdong said: "after the accident, Futian group is also aware that its good days in Guangdong have come to an end, and then gradually move out of the Guangdong subsidiary and turn into a factory in the mainland. The announcement of the collapse of the Dongguan plant is within expectation." A local economic and trade system official also said that the attitude of the local government has always been very clear. We hope that such industries as shoes, clothing and toys will move out to make room for the relocation of new and high-tech industries and capital intensive industries such as automobiles and electronics. 1 bankruptcy! Go bankrupt! In February 29th, Chi Ling, Houjie Town, Dongguan. On both sides of the Dongming Road, several factories closed the iron doors, and a shoe factory called "Ding Fu" was also affixed with a court seal. "The boss has run away, the factory has collapsed, and everyone is gone!" The owner of a nearby restaurant, pointing to the deserted streets, said he was considering closing the stalls and returning to his hometown, although his restaurant was still empty during the meal time. "Now there are a lot of idle factories waiting to be sublet," said a staff member of a nearby housing agency. The furniture factories of Daling mountain, Houjie's shoe factories, and some toy factories and garment factories have been idle. "Who could have thought that it was the year before last, or did everyone wait for the rental plant?" The factory closes, the old shoe equipment purchase price is pressed extremely low - a set of 1 million yuan equipment, can sell 200 thousand yuan even if not bad. "Almost every day there are factories shut down!" Fan Zheng, who has just disposed of a set of shoemaking equipment, said. After careful consideration, he finally decided to close the factory which had been working hard for 8 years. He calculates, "drag on again, the property that is saved in the early years may all compensate empty." Since last year, the private shoemaking factory, which has 1000 employees, has already been unprofitable, and the processing of the materials it processed before 2007 can bring 3%-5% net profit every year. Before the Spring Festival, Fan Zheng took out 10 million yuan as a compensation for demobilized workers. He worked for less than one year and lost one month's wages. He lost two months' salary in one to two years, and so on. He said that although some of the old employees were dissatisfied, the compensation scheme was quite generous in many factories in Dongguan. At the end of last year, the "Ding Fu" shoe factory owner fled to Taiwan on Sunday for a rest break, and has never been seen again since then. The factory's arrears of wages, suppliers' money and water and electricity charges have exceeded 20 million yuan. "Ding Fu" is not an extreme case. Recently, there were reports that more than 100 Korean factories were illegally closed in Shandong Jiaozhou overnight. A similar situation was also staged in Guangdong. Some unscrupulous factory owners took advantage of the Spring Festival holiday. Workers returned from the festival only to realize that the arrears of wages had not been returned. Only those suppliers who were in arrears of money were blocking the factories that had already been empty, hoping to recover some compensation from the remaining equipment. 2 1/3 factory or outgoing Fan Zheng said, it is not clear how many factories have fallen down, nor how much of the illegal bankruptcy. "What we can see is that after the Spring Festival, there have been several workers collectively blocking the town government officials in Dongguan, hoping to help recover the arrears of wages." The difficult situation of the footwear industry in Guangdong aroused the vigilance of the Asian footwear industry association early last year. A research report released by the chamber last November showed that in the first three quarters, nearly 1000 shoe factories and related enterprises in Guangdong had been closed down or closed up by various courts or courts, or moved elsewhere. Li Peng, Secretary General of the chamber of Commerce, told reporters that the manufacturers concerned accounted for about 10% of the footwear manufacturers in Guangdong Province, while the Pearl River Delta region accounted for 40% of the total shoe exports. In fact, the current figure should be higher than the above statistics. After the end of the survey, the collapse of shoe factories showed an accelerating trend. In the South China Sea, Liu Kun, general manager of the Golden Shoe industry of Taiwan funded footwear enterprises, said that the industry will be the reshuffle year in the next two years. More than half of the enterprises will voluntarily close down and withdraw from the footwear industry. The rest of the enterprises need to find new ways. A little strength is considering transferring capacity to the mainland or Southeast Asia, or upgrading and upgrading the added value of products. Bad luck is not just about shoemaking. Wang Qian, editor in chief of the first textile network, said that although there are no research figures to accurately describe the proportion of enterprises that have been eliminated by the textile and garment industry at present, it is expected that about 30% of the enterprises will be out of business in the year, and the business is expected to be even more pessimistic. The Textile Industry Association believes that 30% of the proportion is high, "15% acceptable." Last year, the toy industry, which encountered quality gate events, may be worst. A large toy manufacturer in Guangdong said that it was a rough estimate that the failure of Guangdong toy dealers could reach 20%. He said that a prestigious elder sister in the industry has also recently reported that he is going to close his plush toy factory in the South China Sea with more than four thousand employees. "She has been working for more than 10 years, and it really makes us feel that the industry is bleak." This person expects that the number of toy companies eliminated this year may exceed 1/3. In the past more than 3 years, the negative impact of RMB appreciation, raw material prices, labor costs, labor shortage and electricity shortage has been squeezing the profit margins of enterprises. At the policy level, export rebates, processing trade and environmental monitoring are also constantly being adjusted, including export enterprises, including shoemaking enterprises. Li Peng just submitted to the State Council policy research center a report, in the analysis of the reasons for large-scale closure of shoe enterprises, or lightly or seriously stated more than 10 factors. Some large toy enterprises in Guangdong are also working with the chamber of Commerce of the China Light Industry Arts and crafts import and export association under the Ministry of Commerce. It is reported that the survey requires enterprises to elaborate on the impact of the new labor contract law on employment, the extent of cost increase and the employment situation after the Spring Festival. In addition, the extent of the decline in orders caused by the US economic downturn, the appreciation of the renminbi and the losses caused by the export tax rebate adjustment are all under investigation. Respondents generally said that the collapse of business is the result of multiple factors, but the reasons for the specific cases are different. Fan Zheng mentioned above that the continuous appreciation of the renminbi and rising prices of raw materials are the main reasons for its closure. "Overseas buyers such as the US and Europe do not accept new quotations after rising costs," he said. "Unable to raise prices, companies can only reduce their profit margins, but the reality is that the average shoe net profit level of the whole shoe-making industry is only 3%-8%. If we can't raise the price, then the order will mean loss. Liu Kun, the Golden Shoe industry, said that the new labor contract law to be put into effect in January 1, 2008 and the combination of two taxes are the last straw to crush the camel. Liu Kun said, preliminary estimates, these factors to the enterprise cost increased by more than 20%. A Dongguan toy enterprise in Hong Kong, which has just closed down, may be a typical case. People in Guangdong toy industry have revealed that recently, many lawyers contacted Dongguan workers in the South and expressed their willingness to recover all kinds of protection and overtime payments that the owners did not pay according to the regulations last year. After a long stalemate between factories and workers, the Hong Kong businessmen made a compensation of 2 million yuan, and the factory also announced the closure. 4, "no harm to the overall situation". In fact, at the end of last year, the media began to stir up the collapse of enterprises, which has aroused the concern of regulators. The Ministry of foreign trade of the Ministry of Commerce recently dispatched 5 investigation teams and went to research in various parts of the country. In addition, the light industry chamber of Commerce and the textile industry association are also exploring the situation through questionnaires or field visits. According to the Ministry of Commerce, the results of the survey of the foreign trade division have already been released. There are two conclusions: first, the situation of enterprise failure is not as serious as that of the media. Second, the present situation does not hurt the overall situation. According to the source, from the bottom of the situation, there are more enterprises in Guangdong area, which are mainly labor-intensive industries such as shoemaking, textile, clothing, toys, furniture and so on, while the export of big electromechanical and IT are not affected. According to the data released by the customs, in 2007, Guangdong exported 369 billion 250 million US dollars, of which the export of electromechanical products was US $253 billion 300 million, accounting for nearly 70%. Exports of textiles, clothing, shoes, toys and furniture that went bankrupt in 2007 were $42 billion 367 million, $10 billion, $5 billion 890 million and $8 billion 970 million, all of which accounted for 18% of Guangdong's exports last year. In addition to boring figures, the policy orientation is also worthy of attention. In fact, local governments and local economic and trade systems have been psychologically prepared for the closure of these enterprises. A local economic and trade system official said on Sunday that most of the enterprises currently eliminated are mostly stacked exports, and the added value of products and the profits of enterprises are not high. In the case of excess capacity, the elimination is normal, but some illegal problems arising from the failure of enterprises need to be vigilant. As for relocation, "go away!" He said that the attitude of the local government has always been very clear. We hope that such industries as shoes, clothing and toys will move out to make room for the relocation of new and high-tech industries and capital intensive industries such as automobiles and electronics. He said that although industrial upgrading is a spontaneous market process, there are many times in which the government has the only hand to push through policy adjustments. "There are so many resources in Guangdong on such a large plate. If it is stuffed with toy intensive industries such as shoes, textiles, furniture and toys, then there will be no room for capital intensive industries such as automobiles, electronics and other high-tech industries." Journalist's "precision strike Guangdong" factory closures in Guangdong did not surprise the industry. A researcher close to the Ministry of Commerce said that factories in Guangdong had not been standardized for a long time, and in 2008, when the new labor contract law was put into operation, the interests of factories in Guangdong were the first to be touched. Although the collapse of the tide and the downside risks of the US economy are increasing, many enterprises hope that the decision-making level will become more relaxed in the 2008 foreign trade policy formulation. However, the researchers said that the policy behind Guangdong is still not optimistic. It is worth noting that the enterprises that deal with the current round of collapse occupy a considerable proportion of the processing trade enterprises. The decision-making level has been trying to adjust the structure of China's foreign trade and reduce the contribution of processing trade in exports. The export of processing trade has made China gain little in globalization. Many people satire that China's foreign trade is just "making two handmade money". There is a saying in the foreign trade circles that if the profit of the whole industrial chain is 100%, then the processing trade will only get 10% of China's profits, while the earlier stage R & D and later channels can take 90% of the profits. And Guangdong.