What Are The Reasons For The Collapse Of Manufacturing Enterprises?

This year, affected by China's economic downturn, coupled with the annual increase in production costs, China

It has been a difficult step, especially in the manufacturing PRD area. The data show that this year, there are 76 enterprises in the PRD area closed, of which Dongguan accounts for 27, and the ratio of 1/3 to the total number of enterprises is over closed. What causes the collapse of manufacturing enterprises?

In the Internet field, Baidu stopped its recruitment, merged the US group and the public comment, and merged with where to go. In the field of infrastructure materials, steel, cement, coal, non-ferrous metals, glass and other industries were in a difficult situation;

Ceramics and so on are not optimistic.

The electronics industry in the Pearl River Delta has been closed down due to insufficient orders or staff downtime.

According to incomplete statistics, 14 electronic enterprises in the Pearl River Delta have closed or closed down this year, and 4 companies have caused staff disputes due to insufficient orders.

In July this year, Jiangmen Heshan Sihai circuit board Co., Ltd. posted a notice after 2 months' stoppage of orders, saying that the company's problems had not been solved, and the company decided to terminate its labor contract with its employees.

Business closes in normal range

A local P2P Internet financial company in Dongguan began to consciously compress Dongguan's local business as early as last December, expanding its foreign businesses and moving to the pan western region.

Net investment network CEO Wang Yao told reporters, steel trade, furniture,

Traditional industries are basically not touched by the industry.

In fact, this year's failure is not a sudden situation, but the accumulation and continuation of the real economy in the past few years. "The industry in Dongguan is very special. It may be a core enterprise. There are dozens of hundreds of enterprises around it.

Gong Jiayong, deputy director of the strategic emerging industries research center of Guangdong (Dongguan), said that the reasons for the closure of PRD businesses are manifold.

On the one hand, shoes and hats and furniture are labor-intensive industries. With the continuous increase of labor costs, the low cost advantage that used to exist has disappeared.

In addition, entrepreneurs in the operation of the lack of brand and high-end direction of the pformation of the vision, so in this wave of foreign trade economic situation, the domestic economic situation is not particularly good, led to the current situation.

He believes that the reason for this year's closure has attracted special attention from the outside world, because in such an international economic situation and the overall economic growth in the country, from the high speed to low and medium speed development, everyone's business benefits are not very good.

In-depth analysis

2015 contrast 2008: doubling labor costs, corporate financing is still difficult

In 2008, Fan Youbin founded a clothing company.

Although it was coincided with the global financial crisis, Fan Youbin obviously felt that this year was far more difficult than in 2008. "70% of the domestic garment processing plants are mainly exported, and the biggest impact this year is from the competition of Southeast Asian countries."

Compared with 2008, the situation faced by SMEs this year is more complicated.

With the continuous increase of labor costs, the traditional labor-intensive industries are losing their survival advantages.

It is understood that since 2008, the minimum wage standard of a city in Guangdong province (Guangzhou) has increased from 860 yuan / month to 1895 yuan / month.

China's manufacturing cost is almost the same as that of the US, according to a report from the Boston Consulting Group (BCG).

Significant increase in production costs

Le Jianbo, the owner of a small garment processing factory in Humen town of Dongguan, has had some worries this year. His factory is mainly engaged in the outward processing of middle and high end garments, but more and more of them are pferred to Vietnam and other Southeast Asian countries. The price of domestic orders is also depressed, and the wage increase has reduced the production profits.

"The number of foreign orders has been reduced by three or four per cent this year."

"In Bangladesh and Kampuchea, each employee can earn less than 130 dollars a month, and each worker can produce clothing less than 1000 yuan in wages.

But China is different. China's per capita wage is 600 - 800 dollars / month.

From a global perspective, China's manpower cost advantage is gone. "

Fan Youbin told reporters.

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Since 2008, the minimum wage standard of Guangdong (Guangzhou) has increased from 860 yuan / month to 1895 yuan / month, up 1.2 times.

The minimum wage standard of two cities such as Dongguan and Foshan also increased from 770 yuan / month to 1510 yuan / month.

BCG's report on the global shift of manufacturing industry released in August this year indicates that the US manufacturing cost index is 96 based on the United States (100). In other words, the same manufacturing cost of the United States is US $1 and China needs us $0.96.

The report believes that China's manufacturing industry is facing great pressure, because the cost of manpower rose from $4.35 in 2004 to $12.47 in 2014, or 187%.

Financial difficulties for SMEs

Since last year, Livy, a LED fluorescent producer, has clearly felt that cash in hand is getting smaller and fewer, and checks are increasing.

This year, Livy basically dealt with cheques, and he didn't get the original hand tickets. He had pferred several hands before he reached his hands.

"At this stage, I can only make some clients selectively.

Cash is more important than profit. New development customers must be cautious. If they do not receive money, they will not make sense. "

Livy said.

Fan Youbin said that the SME loans in the clothing industry this year are harder than in 2008.

In his view, the failure of enterprises is mostly due to the fragmentation of capital chain. If there is sufficient bank credit, enterprises can get through.

It is understood that bank loans are generally large and medium-sized enterprises, small and micro enterprises are not easy to apply for loans, some enterprises in order to supplement liquidity, we have to find financing costs much higher than the bank's private lending.

"The cost of private lending is 5-10 times the cost of banks. SMEs are looking for high cost financing, but in fact they have only lasted for a while, but the hole is still there."

Wang Yao told reporters.

Gong Jiayong said that the financing difficulties of SMEs have always been there.

With the increase of labor costs, the profits of enterprises are relatively thin. At present, the profitability of many industries is only 2%-3%.

Such a profit level reflects a great demand for cash.

"The growth of small and medium-sized enterprises was developed on the basis of policy advantages. The development is not very standardized, and credit system or fixed assets and other related links are hard to impress bank lending."

Gong Jiayong said.

Jiang Lin also told reporters that for most of the Pearl River Delta processing trade enterprises, because there is no corresponding collateral, they are generally very difficult to borrow from the bank.

Wang Yao said that most small and micro enterprises have weak financial management capability and lack of control over cash flow.

"They basically do not have the financial theory, they are the boss in charge.

I often remind them that if we want to finance, we must improve our financial management, but they often say they want to avoid taxes.

Entrepreneur theory

LED equipment boss: always be on the alert. Crisis is also a business opportunity.

Although he heard the bad news from time to time, Wang Xin did not have the heart to pay attention to these things. He spent most of his time in the car every day, digging new customers everywhere, and he only focused on how well he lived.

Wang Xin, a LED equipment company opened in Dongguan, has been in operation for several years. With the support of the previous national policies, their generation of small and medium-sized entrepreneurs did not really live a hard life.

"They used to be what others do, and then you just follow them.

But now we can't do that. Now we need to think about how to make differentiation. "

At the beginning of this year, Wang Xin also began to ponder "walking on two legs", thereby reducing the risk of bankruptcy.

But in the future, he can't see clearly where to go.

"Like flying an airplane, suddenly without navigation, I don't know where to go."

Began to ponder "walking on two legs".

Wang Xin self mockery said, his experience is "in the worst time to work, I worked."

When I was unable to do business, I became an enterprise.

He left a deep mark on 2008.

That year, the factory where he worked in Shenzhen was unable to deliver because of a number of products, which led to the breakup of the capital chain and the bankruptcy of the factory.

The company owed him half a year's salary, and finally he got 1/3.

Fortunately, however, he was making a lot of equipment for an enterprise in Foshan before his factory went bankrupt. Wang Xin took the orders with himself in relation to the clients in Foshan and went out to start his own business.

However, his entrepreneurial path is not smooth.

A few years ago, his factory had problems with cash flow and could not even afford to pay workers.

At that time, he took the value of one or two million houses to mortgage, and only borrowed 200 thousand yuan from the bank.

"We can only raise money everywhere, but we will survive."

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In 2012, Wang Xin went out of partnership to work alone and opened the factory for LED lamp packaging automation equipment.

"This year's lamp is definitely not good, but relatively speaking, we will make equipment better."

Wang Xin told reporters that this year's LED light season arrived early in mid May, and has not flourishing until now.

At present, many LED manufacturers are still in the recuperation period. "I have a client in Zhongshan, and I have a holiday in August to September 1st.

The two day shift began in September 3rd, and put it on national day.

"Before we basically do not have to use our brains, we have orders to do.

But we can't do that now.

Also consider how long this thing can take and think about which way to turn.

We keep this vigilance at all times, and prepare for danger in times of peace.

Wang Xin told reporters.

Some people go bankrupt and others make money.

Wang Xin believes that the reason why China's small and medium enterprises are short lived is mainly because an industry reform can only die when there is no way to change.

He began to realize that at least two industries should be developed to make the company healthier.

"At the beginning of this year, I felt that I could not make only one device."

Accustomed to the closing down of small and medium-sized enterprises, Wang Xin is not worried about this.

In his view, crisis is business opportunity.

The positioning and development direction of the company is the most important.

"The opportunity to seize the opportunity in crisis is business opportunity. If I hadn't worked in a factory closed down, I would not have been able to receive orders from the Foshan enterprise.

Wang Xin told reporters that he could not see clearly the future and could only walk along.

This is also the confusion of Fan Youbin, chairman of another entrepreneur, Guangdong intelligent Intelligence Technology Co., Ltd. "in 2008, influenced by the international situation and policies, the market was everywhere gold, and entrepreneurs had many choices of cross-border investment. But this year, we are faced with many uncertain factors.

An enterprise is like a plane when suddenly there is no navigation, do not know which way to go.

Xiaobian believes that this is a process that must be experienced in economic development. When China's manufacturing industry can no longer enjoy lower labor costs and benefits, manufacturing enterprises will face a new round of survival of the fittest. Now, a large number of enterprises in the Pearl River Delta region are closed down and can be foreseen.