Thousands Of Shoe Factories In Dongguan Fail To See "Made In China".

In recent two years, negative news has been coming from some manufacturing bases in Guangdong, for example, there are about 1000 shoe factories in Dongguan.

In fact, many shoe factories there are ready to move out.

On the surface, the failure of shoe factories can be attributed to three reasons: RMB appreciation, labor cost rise and the implementation of the labor contract law.

The deeper reason is that the vast majority of "made in China" products still remain in the low-grade replication stage so far.

Dongguan is known as the "world shoe capital", which accounts for 1/10 of the world's total output. But the core problem is that Dongguan's shoes are not Nike, not Adidas, but shoes that are too common to be produced. Every country can produce if it wants to.

When the RMB did not appreciate, Dongguan's shoes had an advantage over other countries when the labor cost was relatively low, that is, the price was cheaper.

Now that the renminbi has appreciated, the price advantage will no longer exist.

"Made in China" should take the road of innovation. The OECD issued a research report last March, saying that if China wants to enter the ranks of innovative countries by 2020, it must enhance the output efficiency of R & D investment and raise the overall level of education.

Since 1995, China's R & D investment has increased by an average of 19% per year, reaching 30 billion US dollars in 2005 (at the current exchange rate), ranking sixth in the world.

At the same time, the growth and total volume of Chinese scientific research personnel is also amazing.

From 1995 to 2004, the number of scientific researchers increased by 77%, and the total number reached 926 thousand, second only to the 1 million 300 thousand in the United States.

But according to the OECD Research Report, so far, China's research investment is mainly focused on equipment renewal, product testing and high-end technology, while the emphasis on basic research, long-term projects, energy and environmental protection technology is not enough.

In short, in terms of China's current situation, it is still a long way to go to build a modern, mature and perfect innovation system.

The OECD believes that although China's research team is expanding, it is still facing a shortage of professionals.

China should vigorously improve the quality of the University centered research system, with particular emphasis on the training of managers and entrepreneurs.

Relevant data show that the scientific research achievements and technological innovation achievements of R & D in China are much lower than the world average level. The total investment in science and technology, including manpower and financial resources, is about 1/4 of that in the US. The output of science and technology is only 8% to 9% in the US. That is, the efficiency of science and technology in China is only about 1/3 of that in the United States, and there is still much room for improvement in the efficiency of input and output of science and technology.

In order to improve the efficiency of capital use and strengthen the supervision of scientific research funds, it is also an important aspect to give full play to the enthusiasm of R & D and innovation of government, enterprises and private technology investment.

Since the mid 80s of last century, China has implemented a series of economic reform measures, but the ability of innovation in the economic field is still very weak.

To this end, the OECD proposes that the reform of the financial system dominated by state-owned banks will help to enhance the vitality of enterprises in independent innovation.

A more open and efficient capital market will also enhance entrepreneurs' ability to resist risks and increase their investment in bio energy and other long-term projects.

The OECD recommends that China increase its openness in the pition period of building an innovative economy and learn more from international experience.

Specifically, it is to promote intergovernmental and non-governmental cooperation, promote dialogue, exchange scientific and technological achievements, and jointly formulate technical standards.

China should abandon the legacy of planned economy and concentrate on creating better framework conditions for research and development.

We should encourage competition, promote financing, strengthen the protection of intellectual property rights, and improve the quantity and quality of university graduates, in order to promote technological innovation of domestic enterprises.

From the "barrier of patents" to the color TV exports, the urgency of "made in China" innovation began last March 1st. The United States began broadcasting the DTV signals in all directions, and the traditional analog televisions were also stopped for sale. This meant a big cake for the Chinese businessmen with the advantage of the color TV industry.

But in front of this huge market, Chinese color TV enterprises are facing the challenge of "patent barriers" again.

Statistics show that since China's accession to the WTO, the compensation paid by Chinese enterprises for intellectual property rights has exceeded US $1 billion. These intellectual property cases involve mobile phones, MP3, color TV, DVD and so on.

The sale of digital color TV in the US must conform to the technical specification of ATSC (digital television standard of the Advanced Television System Committee of the United States).

Because the digital regulator that must be installed contains many technical patents of American companies and the American ATSC Association, the export of US TV must pay royalties to related companies and agencies, which will undoubtedly increase the cost of Chinese TV exports to the US.

According to senior sources, the royalties are paid in full, and the TV exported to the United States may pay 20 to 30 dollars.

Because the high-end TV products of foreign brands are more, the profits after paying the patent are still relatively large, while the TV of Chinese enterprises is relatively concentrated in the low end products with low profits, so the situation in the patent fees is very severe.

Over the past month, LG electronics in South Korea filed a patent infringement and damages lawsuit against TCL group's China TTE and its holding TCL Multimedia Technology Holdings Limited in a US court, accusing TCL-- Thomson of infringing its four digital TV technology patents.

These four patents are the basic patents that must be used in digital television in the US, and can not be avoided at all.

It is reported that for the United States exported to the United States, the ATSC standard color TV patent costs about $23 per unit.

These royalties include ATSC patents of us Lucent company (US $1 / Taiwan), ATSC technology of us Zenith (US $2.5 / Taiwan), V-Chip technology of Canada Tri-Vision (US $1.25 / Taiwan).

In addition, Thomson has pferred 500 patented technologies to the Japanese well motor, which is charged at $2 per unit.

Japan's Sony Corp also has 4 technology patents, such as digital interfaces. Manufacturers need to pay 600 yen and royalties for 2% of the net price, which is undoubtedly adding to the slender profits of Chinese color TV enterprises.

Taking a look at China's domestic color TV market in 2006, in addition to the steady price of ordinary CRT TV, 29 inch ultra thin CRT TV has cut 15%, 40 inch to 46 inches, and the price of LCD TV has been reduced by 30%. It is estimated that by 2007, the price of large screen LCD TV will still be reduced by 25%, driven by the sharp increase in panel supply and low cost.

With the intensification of market competition, the selling price of flat-panel colour TV will continue to decline sharply in the Chinese market this year.

And China's color TV industry, which is on the pition from CRT (picture tube) TV to flat panel (LCD or plasma) TV, will face a bigger profit problem.

At present, the number of color TV sets produced in China has reached 86 million, accounting for 50% of the world's total production, while half of the production of color TV has been used for export.

China is already a great power producer of color TV.

However, domestic color TV producers are still in a weak position in the industrial competition chain, and their profit margins and market competition situation are obviously lagging behind compared with the Korean and other pnational TV giants.

Although local brands dominate the CRT TV market, the CRT TV market has entered negative growth in the past year.

In the field of liquid crystal and plasma, because of the lack of control power of local enterprises in the upstream panel production, most of them still struggle on the edge of small profits.

In addition to the United States, Europe is also stepping up the establishment of the European digital television terrestrial pmission standard (hereinafter referred to as the European standard) alliance, in order to investigate the infringement of the set-top box manufacturers adopting the standard worldwide.

This means that hundreds of domestic manufacturers who are compatible with European standards will pay $2.5 for each set-top box they export.

And the product range also dates back to 2000.

According to the analysis report on the distribution of TV patents released by the China Chamber of Commerce for import and export of mechanical and electrical products, the 5 parties, including Canadian TriVision, Sony, Thompson and FUNAI, will receive a patent fee of more than 10 US dollars per ATSC for the export of digital TV to the US.

For the TV industry with a profit of only $400 million a year, China's TV export will be under tremendous pressure.

The "patent barrier" abroad has once again sounded the alarm.

China's color TV enterprises still rely on "taking ism", and the core technology innovation capability has not been able to keep up with the times, making the color TV industry once brilliant in the CRT era brilliant and difficult to continue.

In addition, some enterprises in China have a weak sense of protection of independent intellectual property rights. They also reflect a big gap between Chinese and foreign enterprises in terms of intellectual property protection and law-abiding awareness.

Especially after China's accession to the WTO, the management of intellectual property rights is more standardized and strict, so it is difficult for Chinese enterprises to cross the barrier of "patent barriers".

It is a long way to go to make "made in China". "American creativity, Japanese design, Korean R & D, made in China" have always been praised.

There is a saying in the industry that joint ventures in many industries, foreign capital, take 30% of capital, have 50% of the shares, take 70% of the profits, and the domestic capital of the joint venture can only take 30% of the profits.

Some experts estimate that the OEM OEM production, foreigners took 92%, and the Chinese get up to 8%.

Yin Mingshan referred to the above phenomenon as "people eat meat, we eat bones, people eat rice, we eat bran".

Although "made in China" has gained a more favorable position in the international division of labor, it is changing from the processing and assembling base of multinational companies to manufacturing bases, but the manufacturing of low-end products is much, independent innovation and innovation are few, and local brands have little influence.

Obviously, "made in China" urgently needs a pformation from the negative words of "low price" and "cheap", and sets up positive images such as "high quality", "independent invention" and "strong brand".

In fact, Chinese manufacturers have been at the low end of the commodity value chain for a long time, and are facing unfair trade protectionism barriers between the US and Europe.

The diligent working girls in China do not enrich themselves by the wealth they have been working day and night.

Even Kotler is asking: "since China has the ability to produce 120 dollars a shirt, why can we only get $9.6 in revenue?"

Kotler then advised: "an industrial policy that focuses only on the weakest link in value can not support China's future economic development."

It should be noted that in the information age, the "impossibility" of new technology is becoming stronger and stronger, and the cost of imitation is higher and higher.

Because of this, multinational companies generally regard intellectual property as a tool to restrict competition and monopolize the market.

But the most serious problem is that some Chinese have failed to recognize these injuries and believe that the ability to provide cheap goods for the world is the pride of Chinese people.

Fortunately, China's domestic brand awareness has been awakened in the competition with foreign manufacturers.

Many entrepreneurs began to change the traditional production mode of low manufacturing cost and high output.

In order to fundamentally change this situation, the state should give full support to those enterprises with independent intellectual property rights. Only in this way can national enterprises grow.

In the OEM fashion, China's exports may always be labeled "made in China".

The pformation from "made in China" to "creating China" has always been a basic strategy formulated by the central government.

General secretary Hu Jintao put forward: "we must increase our capability of independent innovation in a more prominent position, take more effective policies and measures from taxation and financing to encourage independent innovation and strive for breakthroughs in the development of core technologies and key equipment."

Our country has already established the foundation of world famous brand, and the shoe making industry is like this, but it is not always possible to make a famous brand with a foundation. There are still many other areas where we need to work hard.

This is the biggest revelation to us from the failure of shoe factories in Dongguan.

The new characteristics of economic globalization and international competition are that international competitive advantages no longer depend on resource endowment and labor cost. Scientific and technological innovation has become the decisive factor in international competition, and the ability of independent innovation has become the core of winning the competition.

Facing the reality, our enterprises must change from resource dependence to innovation driven strategy, changing from natural resource exploitation to human resource development, from technology import to independent innovation.