Nine Problems Make Dongguan Into A Predicament.

By the middle of the year, the property market in Dongguan was not showing any signs of recovery. In June, the volume of property pactions fell by nearly 40%, and property prices fell by more than 30%. In the past year, nearly 2000 shoe companies in Dongguan have gone bankrupt.

Jiang Ling, standing committee member and deputy mayor of Dongguan Municipal Committee, admitted in an interview with the media: "after more than 20 years of rapid development, Dongguan has indeed entered a temporary dilemma."

The nine wonders remain unresolved. The miracle of Dongguan has become a predicament. As early as 2004, Feng Yonghong, a professor at the Party School of Dongguan, proposed that Dongguan was facing nine major problems, such as power conflicts, water supply gap, shortage of labor, land depletion, urban planning lag, ecological environment, social security, social security and floating population management.

Today, these problems still plague the whole of Dongguan, and new problems emerge one after another.

"Trapped in rising costs and increasingly stringent regulation, thousands of factories are leaving the PRD, and 10% of the 7 HK funded factories in the Pearl River Delta will be closed this year." not long ago, the Wall Street journal described the PRD as a "Dongguan miracle".

Dongguan is the most famous manufacturing factory in the world.

The county, which once belonged to Guangzhou, Foshan and Huiyang, was upgraded to a prefecture level city without County in January 7, 1988. Since then, more than 20 years ago, Dongguan has continuously introduced the processing trade industry, and gradually created the "Dongguan model" which made Dongguan proud.

In China's most competitive city competition, Dongguan has been promoted to the top 10 as a prefecture level city and has become an example of other regions in China.

However, after nearly 30 years of rapid growth, the power of "Dongguan mode" to promote economic development has gradually weakened, and its negative effects have gradually emerged.

"Marginalization" is the biggest problem facing Dongguan enterprises.

Most enterprises in Dongguan do not have independent technology and private brand, they are marginalized in the division of labor in the domestic industry. At the same time, in the whole international division of labor, they are also marginalized because they are at the bottom of the manufacturing industry.

The reason is that most of the enterprises in Dongguan are labor-intensive, with low added value and low risk tolerance.

Take textile printing and dyeing enterprises as an example. At present, about 20% of enterprises are closed or moved out, and the remaining 80% will soon face similar fate.

Dongguan's export oriented economy accounts for more than 80% of the city's total industrial output value. The situation of textile and dyeing enterprises is also a situation that most of Dongguan's enterprises will face or even face.

In addition, the external environment of Dongguan enterprises is also deteriorating.

Resources, environment, social capacity and cost bearing capacity of processing trade are near the limit.

Statistics show that as of 2007, the scale of construction land in Dongguan has exceeded 40%.

It is no longer possible to continue to promote economic and social development through consumption of resources, but it is not easy to pfer the low end industries and low value-added sectors to achieve industrial adjustment and upgrading.

Jiang Ling, standing committee member and vice mayor of Dongguan Municipal Committee, believes that enterprises continue to engage in processing trade in Dongguan. They will face more and more cost pressures and become more and more difficult to survive. However, the relocation of enterprises to other places will be more risky. After all, Dongguan has already established a mature model in terms of industry matching and industrial atmosphere maturity.

The Olympic Games, which will take time to change, the exchange rate changes and the weakness of the US market are regarded as the "culprit" leading to Dongguan's predicament.

In the first half of this year, the appreciation rate of RMB reached 5%, compared with July 2005, the appreciation rate of RMB increased to 19%.

Data show that only the appreciation of the renminbi, Dongguan shoes enterprises profit per pair of shoes will be reduced by about 5%, while Dongguan shoe manufacturers annual sales profit is only 8% to 9%.

Not only shoe enterprises, but also 15000 processing trade enterprises in Dongguan.

"We can only hold up, but it won't last long," the talk between the owner of a furniture factory in Dao Kau was full of exhaustion.

If the increasingly small profits can support Dongguan enterprises to barely make a living and gradually pform, the Olympic visa policy being implemented will become the watershed for these processing trade enterprises to survive.

Although this policy is based on international practices and the current security situation in China, it has brought the most severe test to the export business that Dongguan enterprises have always relied on.

In the autumn report on China's foreign trade situation, the Ministry of Commerce predicted that the growth rate of China's foreign trade slowed slightly in 2008.

Transfer or pformation?

This problem is plaguing many operators.

The changes in the external environment and the determination of the government's industrial pformation have left many enterprises in Dongguan in a dilemma.

Enterprises facing such difficulties have to take various measures to "save themselves".

Wang Yang, a member of the Political Bureau of the CPC Central Committee and Secretary of the Guangdong provincial Party committee, once sent "carrot and stick" to Dongguan, that is, lobbying enterprises to take the initiative to shift production links, and put R & D, design and assembly, including headquarters, still in place, so that the added value is still there, and there will be less tax revenue in the future.

It is reported that the relevant departments of the Dongguan government are actively preparing for the establishment of the industrial pfer and upgrading coordination office.

As a matter of fact, Dongguan now stands for more than 20 years ago, waiting for the turning point of innovation, but its situation is undoubtedly more complicated than that of more than 20 years ago.

For Dongguan, despite the fact that the predicament has already been formed, there are still many opportunities to get out of the predicament.

The opportunity lies in the fact that the primitive accumulation of capital in Dongguan enterprises has been completed. If we can organize the high technology that is directly butted with Dongguan enterprises to pform traditional industries, upgrade the quality grades of traditional industrial products, reduce the cost of production and gradually pfer the traditional industries orderly through grafting, it is still a great hope to break the dilemma of Dongguan.

In other words, the most urgent need for breaking time is time, and the purpose of breaking through is to change space through time.