China'S Economic Pformation And Upgrading Of Foundry Closures

The problem of foundry closures originates from China's manufacturing and creates pformation to China.

The rise of foundries has come from the development of foundry in Europe and America, but in the past ten years, European and American brands have gradually declined.

As we know NOKIA, MOTO, Sony Ericsson and other mobile phone brands, PC's HP, DELL and so on, with the decline of these brands, the orders of factories are decreasing, and it is very natural to get into trouble.

Since the collapse of many large foundries in China last year, people worry about the future of China's manufacturing. I think this may be a normal phenomenon that China's pformation from China to China.

China's economic pformation and upgrading

In the data released by the government, an important statistical item is processing trade. According to the definition of "Regulations on the processing trade goods of the People's Republic of China customs",

It refers to the business activities of importing all or part of raw and auxiliary materials, components and components, etc. after the processing or assembling of the enterprises.

Since the reform and opening up, China has been promoting the economic growth in this way of trade. According to the Ministry of commerce data, processing trade accounted for nearly 50% of China's foreign trade in 2002 ~2007.

The processing trade that once occupied a large proportion of China's foreign trade began to be replaced by high value-added trade.

In recent years, China has begun to emphasize pformation from China to China. According to the data of Shen Danyang's press conference in January this year, China's import and export trade totaled 26 trillion and 430 billion yuan in 2014, processing trade imports and exports amounted to $1 trillion and 410 billion, trade and import and export trade accounted for 33.4% of the total trade volume, and trade structure pformation and upgrading had achieved initial success.

In recent years, China's labor and land costs have risen, and the cost of processing trade in China has gradually increased. Some enterprises have begun to pfer processing trade to cheaper countries such as Vietnam, Bangladesh, Kampuchea and other labor and land resources.

China has strengthened its management of environmental protection and intellectual property rights, and domestic brand enterprises have grown up, and even have gone abroad to compete with foreign enterprises. They have already been able to participate in the formulation of the world's technical standards, and become the same poles in the development of mobile communication technology standards. For example, in the communications industry, HUAWEI has become a brother in the world's communications equipment industry.

Among the top five of the world's communications equipment industry, China's mobile phone brands such as HUAWEI, Lenovo and millet are taking advantage of Samsung's market share in the global market.

The decline of foreign brands and the rise of Chinese brands

The economic crisis in 2008 led to the global economic recession. European and American people loved Chinese products with high quality and low price, accelerated the decline of European and American brands, and helped the rise of Chinese brands.

Chinese manufacturers pform their brands.

According to the data collected by the Jinjiang Economic Development Bureau in 2010, the city produces about 1 billion pairs of shoes annually, accounting for 40% of the country's total and 20% of the world's total annual output. The jacket produces 67 million pieces annually, accounting for 42% of the whole country, 20% of the whole world, and umbrellas, sweets and so on.

The foundry factory in Jinjiang began to pform its own brand and was born with brands such as nine Mu Wang clothing, 361, Anta sports shoes and so on. With the pformation brands of these manufacturers, the decline of European and American brands accelerated.

In 2013, nine Mu Wang became one of the top five brands of mid and high-end business casual men's clothing. Anta's performance in 2014 was 8 billion 923 million of revenue and 1 billion 700 million of net profit, a record high.

The debate between OEM and independent production

In the past decade, Lenovo has become a global PC player through mergers and acquisitions. In this process, Lenovo emphasizes self production and controls production costs.

Lenovo and Ren Bao joint venture to build a joint venture factory in 2011, Lenovo holds a 51% stake in Lubao. In 2012, it invested 5 billion in the construction and production plant in Wuhan and announced that it will invest about 16000000000 in the future to expand the factory. Lenovo also has its own production plant in northern California.

After several years of hard work, it is alleged that by 2014, more than 60% of its notebooks were self-produced, and the proportion of outsourcing has been greatly reduced.

Lenovo's revenue from July 2014 to September was 10 billion 500 million US dollars, up 7% over the same period last year. Net profit was 262 million US dollars, up 19% compared to the same period last year, and net profit margin was 2.5%.

OEM mode

Its net revenue for the fourth quarter ended October 2014 was 28 billion 400 million US dollars, down 2% compared to the same period last year. Net profit of US $1 billion 300 million was down 6% compared with the same period last year, and net profit margin was 4.6%.

According to the data of iSuppli, the net profit margin of domestic foundries is about 2%-5%. With the decline of profit margins of PC to single figures, the independent production of brand factories will squeeze profits, which is probably the reason why Lenovo can improve its competitiveness and profit growth.

At present, China has made some achievements in its creation, and intellectual property rights management is being strengthened. The intellectual property court has been set up at the end of last year, which will further promote the development of China.

As an enterprise, it is also necessary to adapt to this change, innovate and win higher profits through innovation. In the future, China's economy will develop better.