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    Industrial Pfer: Pain In The Pearl River Delta

    2008/6/9 0:00:00 10419

    Pearl River Delta

    Editor's note: since the end of last year, the Pearl River Delta has experienced a series of "growing pains" after years of rapid development in the context of rising raw material prices, tight land use, rising labor costs, tight monetary policy and appreciation of the renminbi.

    Did Pearl River Delta enterprises move out?

    How serious is the relocation?

    Are they going to "root out" completely, or expand their industries to rearrange the industrial chain?

    After nearly two months of investigation and interview, our reporter listened to voices from all walks of life, visited the status quo from the enterprises, combed the views of experts, and wrote a series of reports on this basis. From today on, the newspaper launched the "Pearl River Delta enterprise relocation survey" in the upper, middle and lower chapters, and revealed the necessity and inevitability of industrial pformation and structural adjustment while showing the true situation of the Pearl River Delta to the readers.

    Solid backbone - whether it is no longer tall and straight in 1978, the spring breeze of reform and opening up awakened the deep sleep of the South China Sea.

    In 1994, Guangdong province established the Pearl River Delta Economic Zone, which opened the curtain of the rapid development of the metropolis economic circle with the highest marketization and internationalization degree in China.

    Here, Shenzhen speed, Pearl River Model and market mechanism have been created, creating the awareness and experience of reform and opening up.

    There are also new things such as "three to one patch", "four links and one leveling", "nesting Phoenix", "two out of doors", "external inline", "borrow the ship to sea", "road maintenance road" and other new things, which has led to the spring tide of China's rapid economic development.

    As a huge engine of China's rapid economic development, the Pearl River Delta has created a historical miracle in the past 30 years and amazed the world.

    Standing on the 30 level steps, the "preferential treatment" in the Pearl River Delta has now become a "universal benefit".

    However, with the reduction of export tax rebates, RMB appreciation, subprime debt crisis and the promulgation of the new labor law,

    A series of policy adjustments to adjust the structure of foreign trade and the sudden changes in the external environment have led to the monopoly of the Pearl River Delta in the Chinese economic domain for more than 20 years. The Pearl River Delta has no choice but to watch a large number of traditional intensive (export-oriented) industries.

    As Wang Yang, a member of the Political Bureau of the CPC Central Committee and Secretary of the Guangdong provincial Party committee, said, "the economic strength is constantly increasing, and the sense of reform has declined, and the competitiveness of sustainable development has declined. The original advantages are no longer exist or are not obvious."

    On January 1, 2008, the new labor contract law was implemented. At noon on the 6 day, Wang Ji, from Liaoning, took the door of a carton factory in Dongguan with him for 7 years.

    He lost his job with him, and there were hundreds of workmates who had the same bad mood.

    Of course, this spring in the Pearl River Delta, followed by more small and medium-sized business owners despondent faces.

    The prestigious "world factory" in the Pearl River Delta is suffering from a sharp industrial shift.

    In February 26th, "the Pearl River Delta: brilliant has become yesterday's old dream?" appeared in the Wall Street journal with a striking title.

    The article points out that in the past 20 years, the Pearl River Delta region, which has become the "world factory", is now facing the situation that thousands of enterprises have abandoned. It is predicted that 10% (about 7000) Hong Kong funded factories will stop production this year.

    For a time, the Pearl River Delta was once again pushed to the cusp of the media by the major media.

    If the cost of a series of raw materials, hydropower, plant and land has been rising rapidly, the majority of enterprises have been tortured. Then the following restrictions have been enacted (such as the export tax rebate policy of some commodities adjusted in July 1, 2007, the No. 44 processing trade restriction catalogue promulgated in July 23rd, the export of 1853 processing trade such as textiles and furniture), and by the end of December, the list of processing trade prohibition categories of the 589 new products has been released, which has led to a total outbreak of the industry's role in its own disadvantages and internal and external troubles.

    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.

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

    The owner of a shoe factory in Dongguan has no doubt that the implementation of the new labor contract law is a booster for forcing him to decide to move away.

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

    According to the questionnaire survey of Shenzhen's relocation enterprises, among the many reasons for the relocation of enterprises, the first factor is "factory rent, gold and precious", accounting for 57.8%; the second factor is "labor costs, including wages, welfare and social security costs", accounting for 53.3%; the third factor is "land demand can not be satisfied", accounting for 45.6%.

    The protagonist of the "massive relocation of enterprises in the Pearl River Delta" is a processing trade enterprise with tens of thousands of furniture and characteristics of migratory birds.

    It is understood that more than 80% of the PRD enterprises still rely on low cost, low profit processing trade mode, always living at the bottom of the price chain.

    The collapse or relocation of large enterprises led to the formation of the Domino effect. The chain formed over the years was rapidly disintegrating.

    A person in charge of a packaging factory, for example, said that a large shoe factory would be closed, and all kinds of accessory factories, such as carton factories, printing factories and packaging factories, would be implicated.

    Usually there are ten or twenty small factories in large factories.

    The closure of these small factories will lead to a chain reaction to the lower life chain. Shops will go out of business, kindergartens for foreign workers will be closed, and many other related industries will also be closed down.

    According to Guangzhou customs statistics, the total export value of Guangdong in the first quarter of this year was US $86 billion 730 million, an increase of 16% over the same period last year, down 12.2 percentage points from the same period last year.

    Among them, exports of textiles, clothing and plastic products declined, while the growth rate of exports of toys and footwear slowed down.

    The top 5 cities with export value are Shenzhen, Dongguan, Guangzhou, Foshan and Zhuhai. Besides the increase of Dongguan export, the export growth of the other 4 cities has dropped.

    In the same quarter, Guangdong exported $16 billion 258 million to the US, an increase of 4.8%, an increase of 10.7 percentage points.

    The total import and export volume of foreign trade in Guangdong accounts for 1 / 3 of the whole country, and the dependence on foreign trade is as high as 160.4%.

    Once problems arise, the impact will not be limited to Guangdong or the Pearl River Delta.

    The old pattern of survival and development of the huge group and the traditional labor-intensive industries in the Pearl River Delta region is approaching the most severe challenges in the past 20 years.

    To go and not to go -- to find cheap and cheap land and labor force, plus port location, is the condition for export processing trade enterprises to take root. Now, when land and labor force have become scarce resources in the Pearl River Delta, the pfer of processing trade becomes a necessity.

    This year, the news that GDP entered 300 billion yuan in Dongguan broke the news. After 20 consecutive years of rapid growth, it slowed down a new low last year.

    Data show that Dongguan has been nearly saturated due to industrial land. In the first half of 2006, only 24 projects with the initial investment exceeding US $5 million were forced to shelve due to the fact that land use targets could not be resolved in time, involving a total investment of US $1 billion 168 million.

    According to the survey of the Guangdong provincial development and Reform Commission, some industries in Dongguan begin to migrate, mainly involving small and medium-sized woollen and textile industries, including electroplating, bleaching and dyeing, and low value-added labor intensive manufacturing enterprises. Some textile, hardware and furniture enterprises in Zhongshan are shifting due to difficulties in recruiting workers, rising labor costs, and leasing factories. Foshan takes appropriate subsidies to mobilize high energy consuming and highly polluting enterprises to move; Shenzhen's industrial pfer is impulsive, among which 30% of the watch industry has chosen to move partly or even completely.

    From the point of view of pferring to Qingyuan, Heyuan and Yangjiang have pferred more enterprises, and there are few enterprises in the areas such as Shanwei, Zhanjiang and so on.

    Is it a wait-and-see confrontation?

    Or find another way to find room for development?

    In the process of going or not, most of the manufacturing groups in the Pearl River Delta are still facing the army in the dark.

    However, more and more powerful processing trade enterprises choose to save themselves.

    It is understood that in order to improve efficiency and avoid many labor disputes that may arise from the labor contract law, a new trend of self rescue of some foreign-funded enterprises in the Pearl River Delta is to purchase some automated equipment instead of employees or reduce employment.

    Guangdong Dongguan Delta Electronics manufactory is a Taiwan funded electronic product manufacturer with more than 20000 people.

    Since the reform of the RMB exchange rate formation mechanism, Delta Electronics manufactory has integrated the departments and product lines, so that the internal productivity has been effectively improved, and the efficiency of the same production line has increased by 4 times since 2005.

    At the same time, in order to cope with the cost increase caused by the rising cost of manpower, the factory has reduced the number of workers by increasing automation.

    In addition, the factory is also actively exploring the procurement channels for raw materials and controlling operating costs.

    Guangdong Kaiping Ben Da Textile Co., Ltd., through continuous strengthening communication with banks, reasonably uses the financial derivatives such as forward settlement and spot selling to avoid the risk of RMB appreciation.

    Guangdong still has many foreign trade enterprises to deal with the RMB exchange rate reform by adjusting the product mix, increasing the added value of products, changing the pricing strategy, increasing foreign exchange liabilities and changing the way of trade settlement.

    Based on various effective measures, since the reform of the RMB exchange rate formation mechanism in July 2005, Guangdong's foreign related economic operation has maintained a good momentum of development, and the import and export of foreign trade has been developing steadily and rapidly.

    In 2007, the total import and export volume of the province was 634 billion 50 million US dollars, an increase of 20.2% over the same period, of which 369 billion 250 million US dollars in exports, an increase of 22.2% over the same period last year.

    With regard to the difficulties faced by the Pearl River Delta export-oriented enterprises at home and abroad, the annual output of more than 8000 employees is about 1800~2000 000, which is the number one export oriented enterprise in the United States. The general manager of the oasis shoe industry, general manager, said: "the EU's restrictions on China's export products have been numerous. In the US market, because of exchange rate, labor costs, raw material costs and so on, it has been relatively difficult to operate.

    But we think this kind of difficulty is temporary.

    Moreover, the local government of Guangdong is also very open. Dongguan has many advantages here. I think we can wait until the spring comes. "

    Dongguan's Fanchang curtain manufacturing enterprise is also an export-oriented enterprise. It has tens of thousands of employees and is the largest curtain manufacturer in the world. Its annual export volume is about 3 billion yuan.

    Deputy general manager Zhuang Xiqin said frankly: "after this round of shuffle, many small businesses have gone bankrupt, so long as we hold on to the future living environment, it will be better.

    So many manufacturing enterprises in the Pearl River Delta will not die.

    Those who can defend to the end will be able to wait for opportunities.

    In the faint anxiety, we have both the desire for change in reality and the firm confidence in the future.

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