How Does An Enterprise Operate Under The Supply Side Reform?

The current Chinese market has such a clue: many "patriots" complain that Chinese consumers vote with feet, and trillions of consumption contribute to overseas.

To further analyze, the partial oversupply of domestic consumption does not match the demand.

How to solve this contradiction? "

"Perfect.

The full name of supply side reform is economic structural reform on the supply side.

In the past, China took the demand side reform, that is, the traditional three carriages - investment, consumption and export, but there were limitations.

China's surplus homogeneity products can not be eliminated, zombie enterprises can not be eliminated, the market is mixed up, greatly reduced.

The efficiency of operation.

It is possible to invest 10 yuan, and finally earn 1 yuan.

A lesson from the United States

In 1980s, the Reagan administration of the United States began to lead the supply side reform similar to that of China at this stage.

In the late 70s, the consequences of the expansionary monetary policy in the United States began to appear. The value of US $1 was only equivalent to the value of US $0.36, real estate bubble formed, taxes remained high, and the production of enterprises declined.

The Reagan administration adopts the supply school to stimulate production investment and drive consumption.

This led to major changes in American industries later.

Government investment accounted for the gradual decline of GDP, the private sector has become the main contributor of GDP, that is, the so-called "national Reversion".

At the same time, the industry continued to shrink, the service industry developed rapidly, and public utilities, finance, education and medical, information and communications, and retail industry welcomed the spring.

In the retail industry, WAL-MART has relied on M & A and management for more than 10 years of rapid growth, from regional enterprises to the international arena. Sam's member stores and other innovative models come from that era.

To exaggerate, Chinese business, including retail, is in a state of "internal difficulty and external focus". Many people say that the future of the industry can not be seen clearly.

Then, can China's commercial market suddenly break out in the wave of supply side reform?

Despite this hope, China's supply side reform is not and can not afford to rigidly impose hard concepts such as tax cuts and tight money in supply schools such as Reagan economics.

From the perspective of most consumer goods industries, China is not short of supply at present, and many even face the situation of excessive homogenization.

The main reason is that the products produced in China are not able to meet the needs of consumers.

Therefore, China's supply side reform is essentially a concept of industrial structure adjustment, upgrading and improvement.

In the 24 new measures to nurture new supply and new power in the State Council, we need to pform and upgrade traditional industries.

"Accelerate the pformation and upgrading of light industry, textiles, food processing and other industries, aim at international standards and market segmentation needs, and improve the quality of consumer goods from the perspective of improving product efficiency, performance, applicability, reliability and appearance design level."

"Implementing the enterprise's technological pformation and upgrading action plan, encouraging the intellectualization pformation of traditional industrial facilities and equipment, promoting the pformation of production mode to digitalization, refinement and flexibility, promoting the green pformation of traditional manufacturing industry, carrying out ecological design, and strengthening the green management of product life cycle.

Support manufacturing industry pformation from production to production service, and guide manufacturing enterprises to extend industrial chain and increase service links.

"The implementation of industrial strong foundation projects focuses on breaking through the bottlenecks of core components and components, advanced basic technology, key basic materials, and industrial technology base.

We should strengthen the infrastructure of measurement technology, enhance the source of traceability and the ability of industrial metrology services.

We will improve the market mechanism of China's first set of major technology and equipment, and support enterprises in research and development and application of major innovative products.

From a consumer perspective

The 24 measures are very clear. The premise of the reform is "aiming at international standards and segmentation of market demand", which means that we should start from the perspective of consumers.

There are always some "brains" in understanding policies and economic regulations.

At first glance, is it not contradictory with the supply side from the perspective of consumers? In fact, one of the biggest problems facing the present stage is the surplus of production capacity homogenization, but this is not a simple solution to increase productivity. The reform of the supply side needs to focus on supply rather than production.

We must consider the problem from the perspective of consumers and users. We must not consider it from the producer's perspective. Otherwise, the old path of increasing aggregate demand from the demand side can not be changed.

For example, there are so many manufacturers of toilet covers in China, but the supply side reform requires these enterprises to eventually produce products that are cheap and well recognized by consumers as the toilet seats in Japan.

Now we turn our attention to the textile industry.

In recent years, many factors such as fierce competition in homogenization and rapid growth in production scale have led to the high inventory and cash flow difficulties in the clothing industry.

According to the data provided by flush platform, taking the 2015 China Daily as an example, 61 of the 82 textile and apparel listed companies had a stock of over 100 million yuan.

Among them, Hai Lan home, Huafu color spinning, wedding bird and other 10 listed companies, the stock of goods exceeded 1 billion yuan.

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Zhu Qinghua, a light industry researcher at CIC, said: "the introduction of the supply side policy will have an important impact on the textile and garment industry's inventory and capacity development.

First, the supply side policy promotes effective investment, which will urge enterprises to make capacity plans according to market demand, avoid blind development and cause waste of resources. Secondly, the policy indicates that we should comprehensively improve the level of standardization and improve the quality supervision system, which will help to eliminate backward production capacity and promote industrial upgrading. Thirdly, the policy emphasizes innovation and innovation is an important way for enterprises to inventory.

In the past, how to clear inventories of enterprises? The most commonly used way was to sell discounted goods through different channels. The Internet once became a "holy land" for enterprises to clean up inventory.

But this practice is like drinking poison to quench thirst, but only poisoned deeper.

How does an enterprise operate under the supply side reform?

First of all, according to the demand of the market, capacity is established. At present, the textile and garment industry is already in an excess state of capacity homogenization. Enterprises can not rely on expanding production to improve their performance; secondly, eliminate backward production capacity, achieve product upgrading, take the branding way and improve profit margins; finally, enhance innovation and further meet the individual needs of consumers.

It is foreseeable that after the release of the supply side policy, large and medium-sized garment and textile enterprises will benefit from it.

How do textile and garment enterprises with low and medium end products overflow?

First, we need to introduce advanced technology to improve the quality of products and upgrade to high-end products. The price advantage of China's textile and clothing products is gradually losing, and we need to improve sales volume by quality. Second, improve the design innovation ability and enhance the attractiveness to consumers; third, we should better manage the garment management and operation system of finished enterprises, and finally, rationally look at the reorganization and merger of the market, and find the most suitable route for the development of enterprises from the overall situation.

If the supply side reform is successful, the pace of Chinese enterprises going international will be more brisk.

Nowadays, the development of Chinese enterprises in the international market relies mostly on investment and acquisition. Although the results are very good, it is difficult for them to grab the market on the international market with their own products, and so do clothing brands.

So at present, China still has the hat of "processing factory" in the world.

The slogan of changing from "made in China" to "made in China" has been shouting for many years. Although Chinese enterprises have been working hard, it has little effect from the international market.

After the reform of the supply side, the products of Chinese brands can reach the international advanced level, and the image of Chinese brands can be better established.

At that time, second-class international brands can enjoy first-class brand treatment in the Chinese market.