No Innovation, No Pformation, Processing Trade, No Future.

In 2008, the global economic environment was grim.

China's economy has maintained a steady and favorable trend in the difficult times.

However, due to factors such as the subprime mortgage crisis, energy and raw material price increase, there are a lot of labor intensive SMEs in China's Yangtze River Delta and Pearl River Delta.

At the same time, in many cities such as Beijing, Shanghai and Shenzhen, because of the strong protuberance of high-tech industries, and relying on their own intellectual property rights, enterprises effectively resolve the cost increase and other factors, the core competitiveness of regional economy has been continuously improved.

In contrast, in the long run, we can find the urgency and inevitability of industrial restructuring. Clearing up independent innovation and enhancing core competitiveness is the only way for regional economic development.

There is no doubt that Weihai's economy, like many other parts of the country, has also encountered a "big exam".

How to win the final victory of the final examination and promote the sound and rapid development of the regional economy with the scientific concept of development?

In July 9th, the municipal Party committee and the municipal government promulgated the implementation opinions on accelerating the construction of "three districts" and enhancing the capability of independent innovation. It clearly proposed that we should create "three zones", further enhance our city's ability of independent innovation, speed up the construction of innovative cities, and promote the development of the economy and society in a good and fast way.

This is a far sighted move put forward in a rational analysis of the overall situation of economic development at home and abroad and in combination with the reality of Weihai. It will surely have far-reaching significance for Weihai's economic and social development.

In order to strengthen the understanding of the importance of speeding up the construction of the "three districts" in the whole city, we should intensify the construction of "three zones" at a broader level, tackle tough problems and enhance the capability of independent innovation. This newspaper has launched a series of reports on "creating three zones, innovating and challenging time".

The report is divided into three parts: "warning signs for foreign economic phenomena", "Apocalypse of the development of high-tech industries at home and abroad" and "the successful record of three districts' construction in our city".

Today, one of the cautionary notes for foreign economic phenomena is "the dilemma of processing trade".

The news from the provincial government is that in the first half of this year, the overall export growth of our province slowed down, and the trade surplus in the first half was 10 billion 460 million yuan.

Reporters also got information from the press conference of the Municipal Bureau of Statistics: Although the export volume in the first half of this year was 3 billion 596 million US dollars, an increase of 15.6% over the same period last year, labor intensive processing enterprises were in a difficult position.

In fact, in the Yangtze River Delta and the Pearl River Delta, the external processing trade enterprises, especially the labor-intensive enterprises, have fallen into an unprecedented development dilemma due to the subprime mortgage crisis, the escalation of international trade barriers, the rising price of raw materials and the rising labor costs.

The slowdown in external demand and the reduction of orders in processing trade enterprises actually led to the reduction of purchases by the US retailers at the end of last year, and this information was rapidly pmitted on its global supply chain.

The first is their purchasing offices in China, and the big importers who directly serve us. Then, the trading companies in mainland China and their export factories find that this year's orders are few, and the last ones that feel chill are those that are purely processed.

Shoemaker owners in Houjie Town, Dongguan, Guangdong may not have understood the meaning of the term "subprime mortgage crisis", but as of May, the subprime crisis has reduced the number of shoes they exported to the United States by half as compared with the same period last year.

The subprime mortgage market crisis in the United States has affected consumer credit and corporate finance, thereby undermining American economic growth.

Under the shadow of the subprime crisis, Americans who have been spending money on the market have begun to pay attention to frugality, purchasing power and retail industry.

The subprime crisis has slowed down external demand, and has also increased the number of bankruptcies in American enterprises and the problems of some importers' capital chains.

According to a recent survey by a US research institute, in April, the number of bankruptcy filing by US companies reached 5173, representing a 49% increase over the same period last year.

The agency also predicts that the total number of bankruptcies of US businesses and individuals will reach about 1 million 100 thousand this year, far exceeding 827 thousand in 2007 and 590 thousand in 2006.

As one of the largest importers of Chinese products, the depressed state of the US retail industry has a direct impact on Chinese export enterprises.

The reduction of orders is the most direct feeling for export processing enterprises.

"From 1 to February, 2/3 of the time was in semi shutdown."

The boss of a clothing company in Jiangxi reflects that 80% to 90% orders from his factory come from the US market, and this year's orders are surprisingly rare.

What he did not know was that there was still a lot of clothes sold in the warehouse of American retailers.

In Dongguan, Guangdong, furniture and lighting factories, which are highly correlated with the US real estate industry, were hit first, followed by shoes and garments with large export volume, and further spread to other consumer products.

And Christmas toys, gifts and other commodities, as early as the 2007 Christmas sales season in the United States has been weak.

After the new year's day in 2008, the world's largest artificial Christmas tree business Co., Ltd. fell to the factory in Shenzhen, Baoji arts and crafts (Shenzhen) Co., Ltd., which once owned nearly 80% of the world's market share.

One of the employees of Baoji said, "the number of containers we export is getting less and less. In 2007, there were only about 5000 containers. At the peak, the factory could export about 9000 containers a year."

In Anhui, as of mid July, orders for clothing, home textiles and tourism products were less than half of that in previous years. Orders for canned food and dehydrated vegetables were also reduced by 1/3. American orders for Giti tires and MeiLing refrigerators dropped by more than 30%.

The "bankruptcy tide" of American enterprises has also spread to Chinese export enterprises.

This spring, a US portable generator manufacturer, which occupies nearly half of the market share, filed a bankruptcy petition with the local bankruptcy court, which directly led to the fact that the export receivables of US $10 million 550 thousand of Chinese exporters could not be recovered.

The collapse of a large scale luggage enterprise in the United States also brought disaster to 5 enterprises in Zhejiang.

Zhou Dewen, President of Wenzhou SME Development Association, said that since the second half of 2007, some enterprises have reflected that the payment of goods has been delayed.

This situation has become more serious since the beginning of this year.

A group of statistics from China Export and Credit Insurance Corp Zhejiang branch also provided strong evidence: from 1 to May, they received 169 cases of reported losses, involving 30 million 340 thousand US dollars and settling claims for us $8 million 950 thousand, an increase of 525.6% over the same period last year.

Among them, the United States reported 41 cases of damages, the amount of 11 million 280 thousand U.S. dollars, compared with the same period last year, 19, 4 million 410 thousand U.S. dollars.

Experts suggest that Long Guoqiang, Vice Minister of the Ministry of Foreign Economic Research of the State Council Development Research Center, believes that the subprime mortgage crisis has brought about a tightening of liquidity in the US financial market, with a decline in the stock market, a depreciation of the US dollar, a decrease in consumption expenditure, a decline in economic growth and a decrease in import demand.

The impact of subprime mortgage crisis on Chinese export enterprises is that the export of enterprises can not get back money. This is the most direct blow to export enterprises, but the greater impact is that the United States, as one of China's largest export markets, has a huge impact on China's exports as its economic recession and import demand slow down.

The subprime crisis led to the depreciation of the US dollar and the further rise in the price of the primary products priced in US dollars.

This is expensive for a country like China, which imports large quantities of primary products.

On the other hand, export enterprises face huge exchange rate risks.

China's large scale mode of development and processing is most directly affected by the external environment of the international market.

Wen Changfen, chairman of Guangdong Xinxin daily products Co., Ltd. recently rejected a large order from WAL-MART, 1 million 500 thousand, worth 75 million yuan.

The new daily use is the largest ironing board manufacturer in the world. More than 99% of the company's products are exported.

"What is the 1 million 500 thousand concept?

Except for us, the world's similar manufacturers do not have an annual output of more than 2 million pieces, which is enough for them to eat for one year.

Wen Changfen said no to super buyers. What worries him is that the cost of raw materials has gone up too fast.

Just for steel, Wen Changfen has to spend more than 2 million yuan a month.

Besides steel, the cost of plastics, wood, packaging paper, labor and so on is also rising. The current production cost of new and new daily uses has increased by about 38% compared with the end of last year.

"At the beginning of 2007, it sold 45 yuan and earned money. Now the cost price is more than 55 yuan.

The price of WAL-MART was reported at the end of last year, 50 yuan per piece, and it could still be done at that time.

But now, the raw materials are on a new high for one month. Do you dare to answer the job?

In the face of soaring raw material prices, Wen Changfen had a worried look.

Melancholy is not only new, new, everyday.

In May, Qian Aling, general manager of Wujiang Haotong silk jet weaving factory, also rejected a large list from the United States.

"The order should be one year and one order, then I can't make a reservation. The exchange rate of the US dollar is 7.3, 7.1, probably to 6.5. Will I lose money at that time?"

1 months ago, Zhang Yucai, the head of Huizhou Yuxing hardware and woodware factory, after repeated consideration, he finally received a lost order.

Zhang Yucai provides accessories for several furniture export enterprises in the region.

He said that from June 2007 to now, three plywood has risen by 400 yuan per cubic meter, and almost all orders have been lost.

Take the board of model 10393 as an example, the cost is 2020 yuan per cubic meter, plus 6% tax, handling charge and pportation cost, the cost is 2159 yuan.

And sold to customers is 2037.4 yuan per cubic meter, 121 yuan per cubic meter.

But all the electrical and mechanical equipment of the workshop is disposable investment. If we turn off the factory, these can only be scrapped.

FENDA craft co., Ltd. is a large wooden handicraft export enterprise in Xianju, Zhejiang.

"Over the past year, the cost of enterprises has increased by more than 30%.

Our products have been quoted several times, but the scope of acceptance is limited, and many of them are still at a loss.

Fang Weiyi, general manager of FENDA company, said.

Every July, many shoe companies in the Pearl River Delta will attend the American shoe fair and accept orders.

"Our quotation will be higher this year, and we need to take into account the factors of cost increase and exchange rate."

A shoe manufacturer in Dongguan said that this is the common hope of PRD enterprises.

But hope is always not easy to achieve. The price increase is faced with the danger of losing customers.

As early as the beginning of this year, Dongguan Fenggang town Lian TAI HOLDINGS LIMITED had to abandon some of its customers' resources because customers did not agree to raise prices.

"Overseas buyers such as the US and Europe do not accept new quotations after rising costs."

Dongguan local industry insiders said.

This dilemma, whether in the Yangtze River Delta or in the Pearl River Delta processing enterprises, is very helpless to realize: as a processing enterprise, their products lack monopoly power and core competitiveness, and have no bargaining power.

Most foreign investors do not accept the requirement of processing enterprises to raise prices, and enterprises can only reduce their profit margins.

The rise in costs comes first from rising prices of raw materials.

Taking steel as an example, in 2007, the average price of steel in 30 major cities and five varieties of the country was 4316 yuan per ton. In January this year, the price rose to 4966 yuan per ton. At the end of January, the price rose rapidly to 6207 yuan per ton, up nearly 5 percent over the same period last year.

In the first half of July, the average price of domestic steel reached 6284 yuan per ton.

Labor costs are also rising.

The investigation report released by Wenzhou Ruian Entrepreneurs Association estimated that after the promulgation of the new labor contract law, Ruian enterprises should pay more than 4800 yuan per employee per year.

If the overtime cost is increased again, the company should pay at least 1728 yuan per employee per year.

The rise in costs also comes from the risk that the renminbi will rise against the US dollar.

Because foreign businessmen usually place the order in US dollars, Chinese enterprises pay in Renminbi for both the payment of workers' wages and the purchase of materials.

As a result, the decline of the US dollar against the RMB exchange rate directly reduces the profit of export products.

Experts suggest that Jiang Shiming, producer of CCTV China financial report, said that most of China's export processing enterprises had no profit in the chain of product sales, and that when they had export tax rebate policies, they would use tax rebates as profits.

Without tax rebate policy, profits will be very thin.

If enterprises can invent new technologies and patents in an early stage, develop new products and build brands instead of staring at the so-called preferential treatment of export rebates, the situation may be relatively better.

Vice Minister of Ministry of Foreign Economic Research of the State Council Development Research Center