Going Out Of Chaos And How To Make Butterfly In China

A friend who is doing business in Guangdong always travels to the northwest of China every year to feel the coldest winter there. He feels that all cells will be activated in the days of blowing ice.

This is the most vivid description of winter. The same is true for the real economic winter. Although it is unpleasant, it can also refresh the mind and promote metabolism.

The "made in China" which is famous for its high quality and low price is very important in the world. 70% of the world's shoes, toys and air conditioners, more than 50% of PC, mobile phones and color TV, 40% of textiles and 25% of furniture are produced in China.

The superposition of the financial crisis and the rise in prices of raw materials, appreciation of the renminbi and the increase in labor costs has made the "sharp edge" made in China increasingly blunt.

The head of an overseas business of an electronics company felt uneasy after visiting the Hongkong Electronics Fair in October. "There are fewer buyers, fewer sellers and less liquidity."

At the beginning of this year, he used the strategy of increasing profits as an annual strategy, but now he has turned to product upgrading. "We must develop connotative development without profit growth."

In the first two months of this year, the total export volume of textiles and clothing in China increased by 8.19%, which was 30.9% lower than that in the same period of 2007. In 1~8 months this year, the total export volume of China's household electrical appliances industry was 25 billion US dollars, an increase of 17.7% over the same period last year and an increase of 10.7%. In the first 7 months of this year, the export of Chinese toys was 4 billion 180 million dollars, an increase of 22.4 percentage points over the same period last year.

The train for Chinese goods to the world is slowly slowing down.

According to the latest research data released by CLSA, China's purchasing managers index (PMI) in October was 45.2, lower than 47.7 in September, a record low.

In October, China's manufacturing output had shrunk for third consecutive months, and the drop was the highest in history.

Respondents generally believed that the decline in production was due to the decrease in new orders and the market downturn.

Recently, the director of the Yangtze River Business School, Bing Bing, pointed out that most of the "made in China" has the characteristics of "two ends out of the world". The upstream raw materials, energy and core technologies of the industrial chain, as well as downstream channels and brands of the industrial chain are highly dependent on overseas markets and multinational corporations.

The extrusion of multinational corporations at both ends of the industrial chain has a greater impact on the profit margin of "made in China".

If the average toy price in the US market is $9.9, Bobbi can only get 35 cents worth of toys.

Since 2008, the cost of raw materials made by Bobbi has risen by more than 30%, and labor cost has risen by 20%, but the market price increase is not more than 5%.

Therefore, "made in China" is faced with profitable "ceiling" and "floor".

With the weakening of price advantage, the manufacturing base of many multinational companies in China has begun to shift to other Southeast Asian countries with lower manufacturing cost.

WAL-MART, the world's largest retailer, has reduced its procurement in China in recent years and has increased its purchases in India and Pakistan.

The "made in China" mode of low price, high energy consumption and over reliance on European and American markets has come to a crossroads.

Zhang Yansheng, director of the Foreign Economic Research Institute of the national development and Reform Commission, pointed out that China's manufacturing industry is big but not strong, mainly because the R & D investment is too low.

The researchers found that 93% of China's Industrial Enterprises above Designated Size had no R & D investment.

US Customs statistics show that China's surplus in high-tech products in the United States surpasses that of other countries in the United States.

Research shows that 95% of this surplus is processing trade production, and 90% of foreign investment enterprises produce.

The lack of core technology and core competitiveness is always an important factor that puzzles China's manufacturing pformation and upgrading.

In fact, there are also opportunities in the crisis. Those with innovative spirit can find kindling in the economic winter.

This year, thousands of small and medium-sized toy exporters in Guangdong have "dormancy" without export records.

But a private enterprise in Taizhou, Zhejiang, which specializes in the production of Christmas gifts, walnut soldiers still keeps orders, because it has launched the new speed beyond Western expectations and has become a supplier to the top ten department stores in the United States.

In the Chinese medicine (600056, stock bar) sector, a new industry star, "Wuxi medicine," has gained prominence in recent years and has grown at an annual rate of 100%.

Instead of taking the old way of relying on API for most pharmaceutical companies in China, it has undertaken outsourcing of new drugs from multinational companies.

When China made the wings of "Chinese design" and "made in China", it could fly higher.

Zhang Yansheng believes that "manufacturing in China" has encountered a very important problem in the pformation process, that is, the development of some important productive services to provide value-added services is still very weak.

Transportation, logistics, finance, insurance, R & D, innovation professionals and professionals, consulting and information are the bottlenecks restricting the pformation and upgrading of China's manufacturing industry.

It is an effective way for China to upgrade its value chain to permeate its advantages from assembly processing to other aspects of the value chain.

In the past 20 years of processing trade in the mainland, an Lang fairy world (Hongkong) Limited has tried to pform from OEM (OEM) to ODM (commissioned design production) to OBM (private brand marketing).

It has introduced Mickey Mouse shoe into the mainland retail market, and has become one of the earliest Hong Kong businessmen to use the patent licensing tool to extend their brand name to design, retail and so on.

To promote effective integration of industries, further enhance the concentration of industries, and strengthen the control and pricing power of "made in China" to the international market is another way of thinking.

In fact, the harsh external environment has accelerated the "shuffling" process of China's manufacturing industry.

Like China's domestic air conditioning industry, GREE, Midea, Haier, the three manufacturers have occupied half of the industry.

It is not that they have been able to storm in the international market, but that the strategy of increasing their own brand exports and gaining more pricing power is being pushed forward.

We must not be arrogant or self belittling, nor can we "rush to the doctor in a hurry".

Shen Minggao, chief economist of Citibank China Limited, pointed out that the price of Chinese consumer goods has normalized in the past 30 years, but the price of inputs, including labor, has been undervalued for a long time.

China's manufacturing is facing a rise in overall costs, which means that the normalization of costs has begun in China.

A new round of industry consolidation will be launched.

It is estimated that the consolidation of most industries will take 5~10 years or even longer.

When the domestic industry consolidation is basically completed, if the leader of domestic mergers and acquisitions can further expand the global market share in overseas mergers and acquisitions, it is possible to get the pricing power worldwide, and such enterprises will eventually become a world-class enterprise.

By then, China will become the global manufacturing center in a complete sense.