Fact Finding Of Smes In Wenzhou

Editor's note: this period is a deep attempt to investigate rumours of Wenzhou's small and medium enterprises' bankruptcy.

Wenzhou used to be the forefront of the market economy, but the business of some small and medium business owners was not very good.

We are looking for pathology to find out the prescription.

Some owners may calculate on the new labor law, and complain that the adjustment of labor relations has increased their cost, but in fact it is not.

In its latest research report on macro China, Citibank pointed out that without considering the far more intensive labor force in China than in the United States, China's labor cost is only 5% of that of the United States.

Although many of the world's affairs can not be simply compared, we understand that the new labor law merely reversed the distorted industrial relations.

Both sides must recognize this trend.

Now, the public government has made the first prescription.

We look forward to the next prescription, for example, since the new labor relations have corrected the cost of the enterprise, the fiscal and taxation system on the chain of infrastructure should also be adjusted.

Tax cuts may be a natural thing to do.

2008 is a leap year.

More than usual.

But on this day, there are traps in macroeconomic observation.

The first quarter data have been announced, and the GDP of the whole country has increased by 10.6% over the same period.

It was completed in 91 days.

In the first quarter of last year, there were only 90 days.

On this day, all the data should be looked at in a different way.

If the increase is deducted, the comparable real data of GDP in the first quarter of 2008 will be rewritten.

Growth will not be 10.6%, but only 9.5% (10.6%-1/90).

Li Xiaochao, a spokesman for the National Bureau of statistics, previously disclosed that GDP dropped 1.1 percentage points in the first quarter.

If the number of days increased, the actual drop will be even bigger, reaching 2.2 percentage points.

For China's economic data with sustained and rapid growth, this is a data worthy of vigilance.

This was formed by a series of macro tightening measures before and after 2008.

What is even more worrying is that the real policy effect of these macro tightening measures will take longer to digest.

If we consider the CPI and PPI that continue to grow, the current GDP's deductible factors will be more complicated.

But there are far more complex factors and situations.

Since last year, from the Pearl River Delta, the Yangtze River Delta to the Bohai rim, the three most dynamic engines of China's economy have witnessed a large number of small and medium-sized enterprises' failures and stoppage and half stoppage.

A series of changes in microeconomics have made China's macro-economy in a high fever, sneezing and colds.

But this is merely a symptom of pathology.

The seriousness of the problem is that the current situation is "half is seawater, the other is flame".

The overheated economy is accompanied by the danger of tightening.

In the face of this intractable phenomenon, the policy is in dilemma.

This is the state of the whole country.

There are more serious areas.

The growth of high fever gradually retreat eastern economy to see Zhejiang, Zhejiang economy to see Wenzhou.

The typical significance of Wenzhou is not only the Wenzhou model, but also the barometer of the most dynamic private investment.

After May 1, the Wenzhou municipal government held an emergency executive meeting of the municipal government.

This is an enlarged meeting.

From the government and private sector (business people) to discuss the increasingly severe economic situation.

"This is the most difficult and grim year for Wenzhou in the past 30 years."

A participant told our reporter that this is the common feeling of most participants.

The conference also conveyed a shocking data. "Zhejiang's economy has slipped in the first quarter, and Wenzhou has been the biggest drop in Zhejiang".

The participants refused to disclose the true sliding data.

But the data from Zhejiang province have been disturbing.

In late April, Zhejiang announced its economic data for the first quarter, and the GDP growth rate dropped by 2.8 percentage points over the same period.

If the same year is considered a leap year increase, the actual drop will be as high as 3.9 percentage points.

This is rarely seen in the past 30 years of reform and opening up.

Data released on the same day also showed that as a barometer of the first and second industries, the contribution of Zhejiang's third industry to GDP was only 5.1 percentage points, the most obvious drop.

Zhejiang province is so, Wenzhou is worse.

Taking Ruian, one of Wenzhou's strongest economic strength, for example, the GDP growth rate dropped 4.4 percentage points in the first quarter. Considering the leap year factor, it actually dropped 5.5 percentage points.

Ruian or Wenzhou are relatively good, and others are worse than Yueqing, Lucheng and Longwan.

According to the data reported by the provinces, municipalities and counties, the slide of a series of data in the spring of 2008 is no longer a structural problem.

"One production, second production and three production decline all the way down, which is also a rare case this year", an economist in Zhejiang said.

The conclusions of the economic analysis conference from all levels of government analyzed various complicated factors at home and abroad. But what kind of survival state is the real micro economy?

At the end of April, Zhou Dewen, President of Wenzhou Association of small and medium enterprises, submitted a report on his investigation of enterprises for some time at the request of the Wenzhou municipal government.

According to the report, 20% of Wenzhou's small and medium-sized enterprises are in a state of shutdown, shutdown and semi shutdown, or even go bankrupt.

"Now that money is enough, but if we look at this situation, if we continue to support it, we will not be able to get old books into it."

At the end of April, when our reporter was investigating in Wenzhou, a local boss in Ruian told reporters this.

He has just shut down one of his businesses.

Shortly after his presentation in Zhou, another investigation report, which lasted three months by the Entrepreneurs Association of Ruian economic and Trade Commission of Wenzhou, was sent to the Ruian municipal government.

This report can be said to be "shocking".

The report, entitled "analysis of the industrial economic situation of Ruian's implementation of the labor contract law", pointed out that "2008 is the year when Ruian's industrial enterprises are facing the severe test of the limit test. It is also the most difficult and unstable unstable year for Ruian's industrial economy since its reform and opening up."

The report shows that most of the three leading industries and six traditional industries of Rui city are labor-intensive industries, of which 20% have been closed down, and the footwear industry has already shut down 1/3.

In addition to shutting down, the relocation speed of SMEs in Ruian continues to accelerate. A report by the Ruian clothing trade association points out that many casual wear, underwear enterprises and a small number of Western-style clothing enterprises have migrated to Changshu and other places.

The survey report also clearly pointed out that a substantial adjustment in labor and capital, the rise in prices of raw materials and energy and the tightening of macroeconomic regulation and control have accelerated the increase of production costs of enterprises.

Taking labour and capital as an example, the report pointed out that in 2008, industrial enterprises in Ruian were expected to spend more than 1 billion 600 million yuan to 2 billion yuan on the cost of labor.

This is the Domino effect triggered by a series of macro tightening policies.

Our reporter also learned during the investigation in Zhejiang that as a Zhejiang experience and a Wenzhou model, the difficulty lies not only in the macro aspect, but also in the micro field of enterprises.

The creation of enterprises has been the most powerful footnote for China's growth story.

But according to our survey, 20% of small and medium-sized enterprises have reached the edge.

How serious is the problem of cost and cost? That's a problem.

There were many cases before.

But how serious the industry and business of a place are faced with is unclear.

First and foremost is the rise in prices of raw materials and energy.

According to the survey conducted by the foregoing report on 9 industries in Ruian, the data given by entrepreneurs is that the average increase in energy and raw materials is over 10% on average, and the highest increase is over 30%.

Among them, steel price increased by more than 10%, copper price increased by 16%, chemical products increased 1.2 times, non-ferrous metals increased 23%, rubber increased 23%, and PVC resin increased by 200 yuan per ton.

At the same time, the price increase of products is only about 3 percentage points, so the profit margins of enterprises are getting smaller and smaller, even to zero.

Specifically, the 31 enterprises involved in the survey, in terms of raw materials and energy prices, were expected to spend more than 300 million yuan in 2008 than in 2007.

Among them, the group is expected to increase by more than 200 million yuan over the same period last year, and the increase of 33 million yuan.

If in 2008, according to the 89 billion industrial output value of Ruian as the base, the average cost of raw materials and energy was calculated by 60%, or 53 billion 400 million, and the price index was 10% average. The enterprises in the city need to spend more than 500 million yuan on the increase of raw materials and energy prices.

That is to say, in 2008, the cost of labor and raw material and energy costs of industrial enterprises in Ruian increased by about 7 billion over the previous year.

The total revenue of Ruian in 2007 was only 4 billion 3 million yuan.

The loss of raw materials and energy is 3.3 times more than 2 billion 116 million of Ruian's local fiscal revenue in 2007.

Beyond the cost of raw materials is the cost of macro-control.

Survey data show that in 2008 the macro-control monetary tightening, the bank interest rate index averaged over 25% over the same period, and some enterprises reflected that the year-on-year has exceeded 40%.

The 31 companies involved in the survey will need to spend more than 3550 yuan in 2008 because of the interest burden. Among them, there are 13 enterprises with annual interest rates of more than 1 million yuan, including the Great Wall, Genting, Walda, Jinshi and so on.

Interest is beyond the cost loss caused by the appreciation of the renminbi.

The survey showed that 22 of the export enterprises were expected to lose RMB 41 million 500 thousand yuan in 2008, if the RMB exchange rate exceeded 7 yuan in 2008.

In addition, export tax rebates.

According to the average reduction of export tax rebate by about 4 percentage points, 31 enterprises involved 17 export enterprises, and it is expected to reduce revenue by more than 4000 yuan.

To our reporter's surprise, the investigation report also believes that the state's macroeconomic regulation and control is tightening up and increasing the social burden of enterprises.

The report said that the expenditure of various enterprises such as poverty alleviation, sponsorship and so on, only amounted to 17 million 600 thousand yuan for the 31 Enterprises surveyed, with an average of about 570 thousand yuan per enterprise, with a minimum of 200 thousand yuan or up to 3 million yuan.

The rise in costs has led to a sharp decline in corporate profits.

The three leading industries and six traditional industries of Rui city are mostly labor-intensive industries.

In the 75 billion yuan output value of 2007, the output value of high-tech products was only 10%, lower than the average level of Zhejiang province by 4 percentage points, and the average tax rate of Ruian high-tech enterprises was only 7%-8%.

If we analyze from the structure of enterprises, it will not be ideal.

In 2007, the 75 billion yuan industrial output value of Rui safe city was divided into 2 enterprises and 500 thousand workers in the city. The annual output value of each enterprise is only 3 million 750 thousand yuan, and the per capita output value is only 150 thousand yuan. If the profit rate of 10% is calculated and deducted, the profit margins of enterprises can be imagined.

The last piece of surplus value dominoes after the tight macro tightening policies and measures, and the value source of the small and medium-sized enterprises in the southeast coastal area has reached a difficult time.

This is an open secret.

If you go to any manufacturing enterprise on Saturday, you will find that the company will continue to run at a high speed this weekend.

It's good to have four days off.

General manufacturing enterprises only have two days off a month.

The devil is hidden in details.

The direct result of the five day operation and the six day operation of the enterprise is that the latter will increase by 20% in the industrial output value than the former.

For a long time, this is an open secret for China's economic growth and rapid growth of manufacturing industry.

Matching this open secret is the monthly salary of workers' wages.

In these manufacturing enterprises, the concept of working hours is not 20.54 days, but 26 or even 28 days.

But now the monthly salary model will be ended.

At the end of April, Chen Zewu, chairman of Wenzhou Seine group, told our reporter that their labor costs will increase by 40% this year.

The change of data is a cost game that small and medium-sized enterprises have to accept.

"Our labor costs will increase by 40% this year," Chen Zewu, chairman of Wenzhou Seine group, told the newspaper at the end of April.

This is a cost game that small and medium-sized enterprises have to accept.

This figure has come so fast that it is an unexpected problem for entrepreneurs, but it is a long standing problem, but it broke out today.

Numbers are not hard to calculate.

After the promulgation of the new labor contract law, the working time on the weekends will be counted as two times the overtime pay.

For example, before the company's monthly salary is 2 days a month's rest, the other 6 statutory rest days are required to be calculated on the basis of 6 =12 days overtime.

This means that after the implementation of the new labor contract law, enterprises will have to pay more than 12 days' wages per month, which is 57.6% of the standard working days of 20.83 days.