Dongguan Shoe Industry And Other Industries Are In A Dilemma Of Upgrading.

Zheng Yeming's first words to reporters are: "shoes enterprises are hard to do."

The question of whether or not to run the shoe factory troubled Zheng Yeming for a few months, and finally decided to stick to it.

After that, he spent all his efforts to use all kinds of relations between his relatives and friends. He found a Credit Guarantee Corporation to guarantee his shoe factory and loan a 6 million yuan working capital to the bank to alleviate the urgent shortage of funds. This figure is almost the annual profit of his shoe factory.

Zheng is the boss of a shoe factory with nearly 1000 employees in Liaobu town of Dongguan. It is like the operator of a large number of shoe manufacturers who have closed down for more than a year in Dongguan. He has run into the most difficult year in running shoe factories for 7 years.

Although getting the loan gave him hope to tide over the difficulties.

However, Zheng Yeming is still not optimistic about the prospect. He believes that by the end of this year, more shoe enterprises in Dongguan will go bankrupt.

According to data from a research firm in Dongguan, nearly 2000 shoe companies in Dongguan have closed down in the past year.

Zheng Yeming, who is familiar with the footwear industry in Dongguan, agrees with this statement.

The collapse of so many enterprises is undoubtedly the situation that Dongguan rulers do not want to see.

Liu Zhigeng, Secretary of the Dongguan municipal Party committee, said at a recent meeting: "Dongguan's industrial upgrading is not about the death of enterprises."

However, in fact, in recent years, the "death" of local enterprises has exceeded the expectations of the rulers.

Dongguan is the most famous manufacturing factory in the world.

More than 20 years ago, Dongguan introduced the processing trade industry and formed the "Dongguan model" which later made Dongguan proud. It once became an example for other regions in China.

However, over the past 10 years, the "Dongguan model" has been widely criticized. "Sweatshops", law and order, and environment have become the focus of controversy in the "Dongguan model".

Dongguan's rulers are also beginning to reflect on themselves. In the beginning of the new century, they proposed industrial upgrading to create a new Dongguan.

However, the owners of industrial upgrading - Zheng Yeming, the boss of the enterprises, have not yet known how the upgrading of the industry has been promoted. Even many officials at the grass-roots level are hard to say clearly.

Zheng Yeming said, "don't say we don't know. Even the government officials don't know what to do, especially the officials at the town level."

Jiang Lin, director of Dongguan science and Innovation Investment Institute, said: "this argument is reasonable. Many officials do not know where the upgrade will go."

From the overall perspective of Dongguan, the processing trade still accounts for most of the economic share after the upgrading of the past 10 years.

Jiang Lin said: "processing trade enterprises are willing to upgrade only a small part, and a small number of enterprises have little success in upgrading."

In the past 30 years of reform and opening up, Dongguan has created a road with its own characteristics.

30 years later, they stood for a new starting point to explore an upgrading road.

But as Jiang Lin said, the upgrading of Dongguan's processing trade enterprises is "in a dilemma".

In recent years, the collapse of Dongguan's processing trade enterprises has not been interrupted.

However, both business owners and local governments seem to be powerless to reverse this trend.

Jiang Lin said: "the government of Dongguan certainly does not want to see so many businesses go bankrupt, but what can they do?

It can only be said to the outside world that this is the law of the market.

Researchers in Dongguan generally believe that shoemaking industry has been pushed to the forefront of the collapse because of the appreciation of the renminbi and so on. Most of the enterprises in Dongguan still face the same fate as shoe factories.

"If they do not change themselves, sooner or later, they will face the same predicament as shoemaking enterprises."

The editor in chief of a Dongguan media said.

Zheng Yeming said: "take the bankrupt shoe enterprises, if there is a working capital, it may survive."

However, the government will no longer use the policy to provide such funds as it has done for the past 20 years or so.

Banks also know that this industry is not "boom" and will no longer easily invest in them.

Many shoe companies did not go through this, and Zheng Yeming was lucky because he was a native of Dongguan, and he got help from his relatives and friends.

Almost all shoe factories in Dongguan export products, get orders from Hongkong or abroad, then produce and sell them to Europe and America.

The simple processing mode makes it subject to foreign markets, and its ability to resist risks is also very low. The appreciation of the renminbi makes these enterprises almost unbearable.

Zheng Yeming said: "only the appreciation of the renminbi, the profits of each pair of shoes will be reduced by 5%."

According to the statistics of a bank in Dongguan, the annual sales profits of footwear enterprises in Dongguan are 8% to 9%.

The promulgation of new labor law and the increase of cost have accelerated the "death" of shoe enterprises.

Zheng Yeming said that these factors reduced the profits of shoe factories by almost 10 percentage points from last year.

Since 2007, workers in many shoe factories in Dongguan have been repeating this kind of experience. At the end of April this year, workers in Humen Dongguan double Jie Shoes Co., Ltd. packed up their bags and prepared to find another way out.

However, they could not leave immediately, because the factory, which once owned more than 1600 workers, failed to manage the wages of workers after the collapse.

The factory stopped working a day ago, and the workers did not get any information before that.

The Hong Kong dollar also fell by 2.71% compared with HK $4.05.

Data from a Dongguan based research firm show that nearly 2000 shoe factories in Dongguan have been "disconnected" like the shoe factory in Humen in the past year.

There were media reports that in the first three quarters of 2007, Dongguan closed down nearly a thousand shoe enterprises.

The company is at a loss. Dongguan has 15000 processing trade enterprises, known as the "world factory", which are almost full of every corner of Dongguan.

Jiang Lin said, "we have to rely on these enterprises to upgrade if we want to upgrade."

He explained that industrial upgrading is nothing more than improving technology and technology, reducing employment, or building its own brand.

"We all know this, but we don't know how to operate it."

Said the owner of a furniture factory in Houjie.

The boss who only had primary school culture was the most common farmer in Dongguan 20 years ago.

There is not much difference between business owners and outsiders. In the face of enterprise upgrading, they are also at a loss.

Like the external evaluation, the owners have complained about Dongguan's upgrading for many years and think the local government is not doing enough.

Zheng Yeming said, "the government only says on its lips that there is no concrete concrete action.

Many officials of the town government do not know how to upgrade, let alone us.

We did not give us training on how to sell domestically or how to make brand, nor did we provide us with any information about market development.

Zheng Yeming said that he had been upgrading the industry for many years, but he could not recall a policy that was very beneficial to the upgrading of enterprises.

However, Jiang Lin's view is different. He said: "the local government is really at a loss in the specific implementation of the upgrade, but because every enterprise has different market directions, the ruling party can not guide every enterprise, and the road also needs to go on by itself."

But for many enterprises in Dongguan, it is impossible for them to take the road of upgrading alone.

For example, the electronics industry, general manager of an electronics factory in Tangxia Shahu industrial area, Ning Xing, said that the electronics industry is different from the shoemaking industry. The electronics industry in Dongguan is a more perfect industrial chain. If we want to upgrade, only the whole electronic industry chain upgrade, the relevant manufacturers will be able to improve technology and reduce employment.

But who can lead the whole industry chain?

Faced with these situations, many enterprises are reluctant to try.

Over the years, they have certain fixed orders, which can survive if they are processed.

Jiang Lin said, "they do not want to take risks because they have risks in improving technology and making brands. Even if they have capital, they prefer to invest in industries like real estate or hotels."

Such thinking has become a common mentality of Dongguan business operators.

A boss in Dalang Town, who runs a woolen mill for many years, said, "create a brand?

It is a matter of thousands of soldiers crossing a single log bridge, or do not engage in "fancy" things.

The boss, who has over 50 years of age, worked hard in the processing trade industry in Dongguan for nearly 30 years and became an entrepreneur of the rich side.

In recent years, he has invested part of his capital in real estate, hotels and other industries, and has not tried to turn his woolen mill into an independent brand enterprise.

It is generally believed that most of the business owners in Dongguan are now working hard in the processing trade industry for many years. They have become accustomed to the simple "survival" way of relying on orders. They will not easily take the risk of taking risks, or even let them go bankrupt and keep some of the funds they have made over the years.

The water diversion project from the east to the most prosperous old city of Guancheng in Dongguan, which had been used for irrigation, turned into a sewage ditch. It has never been crystal clear for more than 20 years. The black river is lying on the thin river bottom, giving off a foul smell.

This is one of the costs of Dongguan's economic development.

Dongguan has changed greatly in recent years, and the process of urbanization and strong financial support have made the city more beautiful.

But despite repeated efforts by the government, the situation of the East Canal diversion can not be changed because too many enterprises need it.

Researchers in Dongguan believe that sometimes trade-offs are hard to decide.

East to the canal and then to the west, it is high town. Here is a Yuyuan shoe factory, a Taiwanese capital company that is in a dilemma for the local government.

It is known as the world's largest shoemaking factory. It has more than 80 thousand employees, producing internationally famous brands such as Nike, Adidas, Jordan and so on. At the same time, it is also a factory widely criticized by the outside world. China Labor observation has reported in detail a factory's "Irrationality" and accused it of being a "sweatshop".

It was this factory that was recently rumored to move to Suzhou.

However, some insiders say that this rumor is just to ask the local government to provide more favourable living conditions for it.

The source said that the purpose is to get cheaper land to meet the needs of the factory.

A person who knows a lot about Yuyuan shoe factory believes that if it is to be pulled out, it is almost impossible, because its technical personnel and equipment can not be moved easily.

Even in this case, the local government has to give in to its conditions, because its share of the local economy is too large.

"Let foreign enterprises upgrade, the situation is not optimistic."

Jiang Lin analyzed this way.

He studied the economic situation of Dongguan for many years, and thought that Dongguan's Taiwanese businessmen's consistent style of work was "closing the door to do". They did not allow workers to leave the fence of the factory, did not participate in the construction of local public facilities, had their own Taiwanese business schools, and had Taiwanese Association, which basically did not integrate into the mainland society.

"If they do not understand the ideas of the mainland people and do not deal with the mainland enterprises, it will be very difficult for them to do domestic sales and make brands."

Jiang Lin said.

According to Jiang Lin, there are more than 14000 Hong Kong and Taiwan enterprises in Dongguan. They almost include most of Dongguan's enterprises with a certain scale, and these enterprises are hardly controlled by the Dongguan government.

"It's hard to upgrade them."

Jiang Lin concluded.

Jiang Lin mentioned another resistance to upgrading. "In fact, the Dongguan municipal government has made great determination to upgrade Dongguan's industry. However, officials at this level of the town government generally do not know how to launch it, and they do not want these enterprises to reduce their employment in their subconscious.

Because of the lack of employment, the catering and hotel services in the town are hard to sustain.

Revenue from the population has also decreased. "