Wenzhou Textile Enterprises Strive To Get Out Of Economic Difficulties At An Early Date

At the Canton Fair last spring, Xu Yunxu clearly felt business was hard to do. Her "Trace" brand is sold in more than 20 countries. This time, some of the old customers have never appeared, and the orders placed here are not as good as before. Xu Yunxu, chairman of Wenzhou tengxu Garments Co., Ltd. runs the Canton Fair every year. She knows that this situation is related to the instability of international exchange rate, the increase of raw materials and labor costs. In the second half of the year, the exhibition was worse and fewer people came, because the financial turmoil in the United States began to affect the whole world. At that time, tengxu's exports dropped by 10%. However, tengxu's sales continued to grow by 18% by the end of the year, thanks to a strategic development plan previously implemented by the company, mainly to establish brand and increase the supply to the domestic market. Wenzhou's small and medium-sized private enterprises account for 99% of the total. Mainly engaged in light industry textile or leather processing, and a small part of heavy industry enterprises, producing hardware, electrical appliances and automotive components or vehicle. "One of the leaders of the Wenzhou Municipal People's government's economic and Trade Commission said:" the impact of the economic downturn on Wenzhou's enterprises is relatively early, and all enterprises are trying to cope with their plight. The government has offered a helping hand. Efforts have been made, and now we see the dawn of economic recovery. " The impact of economic downturn on different industries and enterprises of different sizes is different. Some big enterprises do not feel very obvious, even orders increase, while some small businesses are forced to close down or be merged. The local government quickly adopted a series of measures, including the reduction of corporate tax, the provision of discount loans, the encouragement of Guarantee Corporation to help enterprises finance, and the introduction of new products by banks and newly established small loan companies to facilitate SME loans. "No enterprise in Wenzhou has closed down because of the broken capital chain," said Yu Ju Sen, director of the small and medium enterprises department of the Municipal Economic and Trade Commission. The government encourages small and medium-sized enterprises to implement mergers. For example, there are many small synthetic leather enterprises, which occupy 50% of the country's market, and these enterprises are now merged into 4 groups. The government also requires enterprises to upgrade their technology products and reduce pollution. The government has also launched 10 programmes to select a group of promising and willing enterprises to give priority to support. Another plan is to set up 100 famous shopping centers in Wenzhou in two years. In the past two years, the company has invested about 20000000 yuan to set up a design team of more than 30 people, including Italy and Hongkong designers. The company has been playing the leading role in women's wear products, and increased children's clothing last year. Xu Yunxu believes that the current economic difficulties are catalysts, forcing enterprises to adjust their operations and improve management. "If we don't do it now, sooner or later, there will be problems," she said. Last year, 80% of tengxu's sales came from exports. Exports are expected to increase by 10 to 15% this year, but the proportion of exports will be reduced to 70% or even 60%. Increasing domestic market sales is another strategic shift of tengxu. Now it seems to be a timely move. "China has a large population, and clothing is a necessity." Xu Yunxu said. Tengxu plans to expand sales channels in Shanghai, Hangzhou, Wuxi, Wuhan, Beijing and Harbin this year. Xu Yunxu also hopes to provide high-end clothing for Chinese people to replace imported luxury goods. "In the field of clothing, Chinese products have reached a high level. Our country has enough fabrics, advanced production equipment, our design capability is stronger and stronger, coupled with a stable political situation and a long history and culture, we have great room for development in the international market. " Xu Yunxu said. It is said that most of the people in Wenzhou are "chicken heads rather than Phoenix Tail". Therefore, Wenzhou enterprises are mostly private and small. Small businesses are flexible and changing operations are relatively easy, but small businesses are also fragile and need government help most. Xu Yunxu believes that the government's support for enterprises is timely and effective. The central government has stabilized the exchange rate through macroeconomic regulation and control, increased export tax rebates and reduced bank interest rates. The cost of financing, raw materials and labor decreased correspondingly. In the second half of last year, despite the global financial crisis, the domestic economic environment improved. Last year, SMEs in Wenzhou accounted for about 2% of the total number of SMEs. The head of the Municipal Economic and Trade Commission said, "this figure is not big, and there will be such a situation in normal times." Many enterprises start early. Wenzhou people rely on their relatives and friends to do business, and Wenzhou businessmen run around the world. The earliest Wenzhou people who sniffed the signs of economic recession quickly communicated their information to their families through their family networks. "We feel that the economic downturn is relatively early. We have no panic or confusion. We know very well what to do. We must take the danger as an opportunity and strive to get out of the predicament at an early date. " Xu Yunxu said. Although the impact of the global economic downturn is early and deep, the economic operation of Wenzhou in 2008 is still stable, and the total industrial output value of the city above scale still grows by 8.1%. In January this year, the government statistics showed that the bank loans to enterprises increased significantly, electricity consumption and application electricity consumption both increased, especially for skilled workers. "These data reflect enterprise confidence and are the harbinger of economic recovery. Wenzhou has stood the test and is likely to take the lead in getting out of the economic difficulties. " The head of the Municipal Economic and Trade Commission said. More shoes and hat investment information, click here to enter the responsibility editor: Wang Xiaonan