20% Of Wenzhou'S 60 Thousand Enterprises Are Closed Down. Who'S Gone?

A shoemaker walks back to his dormitory after work in Wenzhou, Zhejiang.

Due to the rising labor costs and other reasons, a large number of labor-intensive enterprises are facing a survival crisis.

Ni Yun is a small business owner of Liushi Town, Yueqing, with the reputation of "China's capital of electrical appliances".

Like many of his kinsmen, he has a large and small factory for his fellow townsman "benchmarking" enterprise CHINT, Delhi, Tian Zheng and so on to do all kinds of supporting products.

The factory is small, with only a dozen workers, but it condenses the efforts of Ni Yun, who has been close to knowing the destiny.

However, this year, he has the idea of shutting down this factory.

In the past, he produced "magneto optical chip" raw material is 6000 yuan / ton, the finished product can sell 6500 yuan / ton.

But now, raw materials have risen to 8000 yuan / ton, but he can only sell 8300 yuan / ton, and gross profit has been reduced by 200 yuan.

Moreover, in order to maintain the normal operation of the enterprise, he also borrowed about 200000 yuan from the credit union, and calculated 8/1000 monthly interest.

You don't want to raise the price, otherwise you can't sell it at all.

Ni Yun sighed and said, "the price of raw materials has increased, so we can all share one thing. We can not expect the downstream enterprises to take everything."

Under pressure, some of his relatives have voluntarily turned off the factory, but he is still insisting, "if I don't do this, what else can I do?

As long as we do not lose money.

Damour's sword on the head of Zhejiang.

(12%) in Wenzhou and Zhejiang, such a story is being staged everywhere.

In addition to market factors such as rising raw materials and impeded exports, macro policies such as tightening monetary policy, energy conservation and emission reduction, and the introduction of the new labor contract law are further pushing the long term development mode of private enterprises to a dangerous edge.

According to Jiang Jie, Secretary General of Wenzhou private enterprise promotion association, the total cost of enterprises will increase by 8% to 12% this year.

"Not only the raw material has gone up, but now the supplier also needs to pay first and then get the goods. The agents must give them credit, and in the past, suppliers can also credit."

Wang Guangrong, chairman of Wenzhou Fukang Shoes Co. Ltd., thinks he is lucky. "At least we haven't stopped production."

The output value of the Fu Kang shoe industry has exceeded 100 million yuan last year. Although the products are sold domestically, they are not impacted by the international market, but the rise of raw materials and the increase of workers' wages have made Wang Guangrong overburdened.

Beside Wang Guangrong, many colleagues fell down for the same reason.

What is more frightening is that the trend of "falling" has spread.

"20% enterprises in Wenzhou are in stoppage or semi stoppage."

Zhou Dewen, President of Wenzhou SME Promotion Association, repeatedly stressed, "but it is not bankruptcy!

Generally speaking, enterprises will go bankrupt only when they are in a desperate situation. Some enterprises that choose to stop or semi stop work are in a state of suffering.

Zhou Dewen supported the judgement of Wenzhou small and Medium Enterprises Development Association, a research report on the current situation of SMEs in Wenzhou.

The conclusion of the report is that about 20% of the more than 30 million small and medium-sized enterprises in Wenzhou are in a halt or halt, which means that 6 million enterprises are facing a crisis of survival.

"This situation may also be exacerbated."

Zhou Dewen was worried.

Despite the fact that the data are not approved by the local government, it is an indisputable fact that the situation is grim.

The Wenzhou economic and Trade Commission, which was followed by the reporter's "Research on the development of the industry in the first quarter of 2008", showed that 1486 of the 23470 enterprises in the 26 key industrial towns in Wenzhou were in stoppage or half stoppage. The proportion of halting work and half downtime reached 6.3%, of which some of the industrial towns in Yueqing and Pingyang accounted for about 10%.

"But you see, this is a strong town, if not a strong town?"

Zhou Dewen asked rhetorical questions about the data of the two reports.

The Wenzhou clothing trade association and the shoe leather industry association have confirmed that they have taken part in the investigation of Wenzhou economic and Trade Commission. However, the parties concerned are silent about the specific bankruptcy data and the way of investigation.

But there is no doubt about the data submitted by township, industry associations and enterprise associations.

In order to further understand the situation of enterprises, the Wenzhou General Chamber of Commerce has organized 4 working groups to study in towns and townships, and the specific data will be submitted to the report.

"From the present point of view, there are not many real bankruptcies, most of which are in stoppage or semi stoppage."

One person involved in the investigation said, "everyone is still waiting, there will be a turnaround, maybe it will start immediately. From the character of Wenzhou people, it will not easily choose the way of bankruptcy."

The result of waiting is not known, but private enterprises have entered a "difficult period".

It is not only Wenzhou, Taizhou leap, Hangzhou Nan Wang Group, Jiaxing Xu Lai, all local leading enterprises have successively pmitted the news of capital chain breaking.

In fact, the signs of the survival crisis of SMEs in Wenzhou are more or less apparent. In fact, the development of SMEs in Wenzhou is a symptom.

According to data from relevant parties, more than 20% of lighters in Wenzhou did not have sales records in 2007.

Zhou Dahu, chairman of Wenzhou smoking Association, was worried about this: "Wenzhou lighters enterprises have closed down eight or nine times in a year. Since the beginning of this year, there are about thirty and fifty families still producing, and there are still three or fifty families struggling."

This is also happening in hardware, clothing, shoes and other industries.

According to a set of data released by the Wenzhou Municipal Industrial and commercial department, only 3579 enterprises were cancelled in Wenzhou in 2007 alone. Among them, apart from the large number of traditional labor-intensive enterprises such as clothing, shoes, electrical appliances and so on, Wenzhou's characteristic light industry also began to crisis.

The Wenzhou industrial and commercial department has released the first report on the "lifecycle" of SMEs. The report shows that nearly half of the local SMEs have "survived" for less than 4 years.

Zhou Dewen's analysis report on small and medium-sized enterprises also pointed out that small and medium-sized enterprises are generally faced with operational difficulties: underemployment, product backlog, triangle debt prevalence, capital turnover difficulties, and even a large number of small and medium enterprises close down and entrepreneurs escape.

The analysis shows that the growth potential of SMEs in Wenzhou is about 70%.

This is also seen as a bottleneck in the development of the "Wenzhou model" itself.

The "lump economy" has relatively concentrated production of similar products or products in a certain area. However, due to the weakness of industry self-discipline, the market competition means more emphasis on price competition; many small and medium-sized enterprises are competing by imitation of other products; a large number of small and medium-sized enterprises are developed from family workshops, and family management is the main business. The main duties of enterprises are held by family members, and the decision-making power of enterprises is concentrated on the owners of enterprises. Due to historical reasons, most of the small and medium enterprises in Wenzhou are less educated and have no systematic training in modern management knowledge. Because of the "exclusion" of family businesses, small and medium-sized enterprises have rejected the "natural" nature of foreign talent, and thus the most emphasized innovation of modern enterprises has been very difficult to achieve. As we all know, Wenzhou's economy is a typical regional character.

The most important thing is the shortage of funds.

Due to the natural defects of large and medium sized enterprises, relatively unregulated, it is very difficult for them to obtain loans from banks and run through private funds for a long time. Once the external environment changes, the crisis of survival will soon be patronized.

Grim!

The Wenzhou economic and Trade Commission also used the above words to describe the current situation of enterprises in the latest phase of the industrial economic performance analysis: 1-4 months, the cumulative output value of the industry was 100 billion 147 million yuan, an increase of 14.3% over the same period last year, an increase of 7.2 percentage points over the same period last year. In terms of enterprise efficiency, the profits of Enterprises above Designated Size reached 2 billion 769 million yuan, an increase of 8.6% over the same period last year, but the growth rate dropped by 20 percentage points year-on-year. The deficit of loss making enterprises was 314 million yuan, an increase of 28.9% percentage points over the same period last year, an increase of 22.1 percentage points compared with the same period last year, and a deficit of about 20 percentage points higher than that of the same period last year.

Where to go?

Why is it so sad this year? "We've never used bank loans for more than 10 years, but now we want to use it, but we can't use it."

There is a hint of frustration in the discourse of Lu Da Wei, the boss of a printing company in Cangnan county.

In the banking sector, it is precisely because of its lack of loan credit records, in the credit crunch today, it is difficult to loan him unless LV chooses a full mortgage loan.

"An annual output value has reached 30 million yuan, and 40% of the goods exported enterprises have not used one bank loan."

This is the true portrayal of most private SMEs.

"At the lowest time, our private lending rate is only 5% (0.5%), which is cheaper than bank loans."

LV is usually very urgent when he needs money, but the bank light audit process may take half a month.

Whenever this happens, private enterprises traditionally borrow or use private funds through friends and family.

Through the flow of its own capital, suppliers generally allow credit, receipt of orders, production and delivery in about one or two months to recover the loan. For a long time, a large number of small and medium-sized private enterprises have been through their own "moistening" days.

But the credit crunch suddenly began to blow, and they suddenly discovered that it was not "spiritual".

There are many reasons for this failure.

Zhou Dewen, chairman of Wenzhou SME Promotion Association, attributed it to five factors: macroeconomic regulation and control, tightening of money supply, price rise of raw materials, appreciation of the renminbi, and rising labor costs.

First, on raw materials, lighter industry as an example, raw material Yb, platinum, steel and other prices rose, copper from twenty thousand yuan / ton to 70 thousand yuan, zinc also from the original 8000 yuan to nearly 40 thousand yuan / ton.

As a result, to maintain the same scale of production, the liquidity needed suddenly increased; and the appreciation of the renminbi and the subprime mortgage crisis exacerbated the capital chain of enterprises. "Early signed orders, affirmative losses, and losing customers", under difficult decisions, some enterprises chose to continue to export, and the profit margins continued to be crushed.

The increasing number of overseas "Lai Lai" has also caused a lot of headache for Wenzhou private enterprises, which are mostly export oriented enterprises.

According to actual research, announcement of listed companies and customs and other related data, the Ministry of Commerce Research Institute summed up an estimated value: the overseas arrears owed by Chinese enterprises are about 100 billion US dollars, and increase at an annual rate of around us $15 billion.

The disadvantages of the new labor law are far more than these.

Under the new labor contract law and the policies of energy conservation and emission reduction, the profit margins of enterprises are also narrowing step by step.

"Our clothing industry has a net profit of around 5%, and maybe only 3% now."

Zhang Qiongyao, Secretary General of the Wenzhou clothing trade association, told the Morning Post reporter that the new labor contract law threw out some unqualified enterprises' profits by crowding out the contribution of employees.

"Now we must raise 100-200 yuan a year, otherwise employees will quit."

Wang Guangrong, chairman of Wenzhou Fukang shoes industry Co., Ltd., has deep understanding of this.

A data provided by Huang Deqi, executive vice president and Secretary General of Ruian Entrepreneurs Association, is more revealing.

According to the survey results, the average annual labor cost per employee increased from 4000 yuan to 7000 yuan, and the highest growth enterprise was 9642 yuan.

"That is to say, enterprises pay more than 4000-7000 yuan per year to employees, for example, the employees of these enterprises are 1000 people, and the annual labor cost will need to spend more than 4 million yuan."

Huang Deqi said.

The effect of bank lending is tight.

According to people familiar with the matter, by the end of May, the banking sector in Wenzhou had used up the loan amount in the second quarter, and banks have basically stopped lending.

On the other hand, private interest rates in Wenzhou are also gradually increasing.

"As far as I know, some interest rates have reached 1 Gross (10% per month)."

Jiang Jie, Secretary General of the Wenzhou private enterprise promotion association, said there is a "bar effect" between bank loans and private interest rates. Banks are lending tight and private interest rates naturally rise.

"But it is not yet a problem of high interest rates. It is simply impossible for enterprises to use them."

Lu analyzed the reasons why he wanted to find a bank loan. "Before borrowing was mainly an order, and borrowed money to buy raw materials, it should be urgent to return the money in half a month."

And now is the overall price rise of raw materials, is to maintain normal production money, not emergency production, that means that the loan period is bound to be very long, so who can afford it?

And even big companies that can get loans from banks also have