China'S 90% Private Enterprises Will Go Bankrupt? A Destructive Chain Reaction Is Just Around The Corner.

A friend who opened a factory in Suzhou told me that his factory had not received an order this year.

With the downward pressure on the economy increasing, plus the housing market

Once again, the private sector went bankrupt, and 90% of private enterprises failed to be alarmed.

The private enterprises discussed here are not new and innovative enterprises that have grown up, but those private enterprises that have been bred since the 80s of last century.

China's private enterprises have a kind of original sin. These private business owners are mostly after 60 and 70. They often have not received higher education. They can seize the market by "buying low and selling high", "information is not equal", "imitation, Shanzhai, low price".

They even used to bribe power, loopholes in policies and policies to accumulate wealth.

They do not know the theory and do not want to study. They only want to make money and earn more money.

Now, in the face of increasingly meager profits and increasing competition, the market space has become increasingly narrow. Private enterprises do not choose to create or update models, but try to struggle in a worse and worse environment, that is, "one road goes to the black."

This is their original sin, and now they are being liquidated...

At this rate, there will be very few Chinese private enterprises that will survive in the second half of 2016.

In the next 1 years or more, private enterprises, as the concentrated expression of "money for money" by Chinese people, will begin to understand what the real "economy" is.

"Real" means that the failure of enterprises is not only a problem of making money or losing money, but also means that they have lost the value of existence. Many private business owners even have to build up their original accumulation, and how to eat it will spit out.

Most of the traditional private enterprises are dependent on the trend of the times. They tend to be rough, changeable and do not talk about principles.

Once the economic trend is dispersed, this traditional backwardness

They lost their living space.

From this point of view, more than 95% of the private enterprises in China will disappear in 5 years.

From a time perspective, it is predicted that by the middle of 2016, this prediction target will become a reality.

In 2016, the private enterprises' centralized failure period will trigger a corresponding chain reaction.

Of course, a group of new private enterprises will be born, and a new business logic will be set up to reconstruct China's business civilization system. I will discuss this in other chapters.

In European and American countries, private business owners are the most innovative and managerial people in the whole society, that is, the "elite class" in the whole society.

On the outside, these people actively establish enterprises, have a strong enterprising spirit, continue to compete and take risks, while those in the interior pay more attention to safety, emphasize the risk prevention and take strong risk prevention measures.

Generally speaking, the start and development of Chinese private business owners are totally different from those of private enterprises in the West.

Chinese business owners are often forced to go to sea because of their different environments.

From the initial way of starting up, the owners of Chinese private enterprises are mainly divided into three categories: "Chinese characteristics".

The first is that these private business owners are unable to enter the state-owned enterprises and other institutional economies, so they earn their living through small businesses.

As a result, the business grew bigger and bigger and finally became a private enterprise.

Many of these enterprises are service enterprises, including catering, entertainment and other enterprises.

The second category is that some private business owners see that China can create "sweatshops" and make export products to make money, so follow them as "sweatshops".

From the point of view of the international market, the essence of these sweatshops is "international migrant workers", and these bosses are only "contractors".

In the first ten years of twenty-first Century, these export processing sweatshops developed rapidly, and their products sold all over the world and became the "backbone" of the private sector.

The third category is the production of imitation and fake and shoddy products, also known as "Shanzhai".

"Shanzhai" products are mainly based on two points. One is to use China's sweatshop environment, the two is to make use of China's lack.

And consumer protection, giving these bosses room to live.

Of course, on the basis of these private economies, some private owners have started to "introduce" Western concepts and management models, but only a few entrepreneurs in China are trying to develop through R & D innovation.

Because of the lack of intellectual property protection, even if some private companies spend money on R & D, the result is stolen or imitated.

These enterprises soon went bankrupt after their research and development funds had been wasted.

When China is short of innovation and R & D oriented environment, China's private enterprises are less willing to forge ahead and turn to evil ways instead of making money faster. Why not do so? Lack of innovation leads to lack of competitiveness and subsequent efforts.

In addition, private enterprises are still "lacking in clothing and food".

This includes several aspects: first, in terms of finance, banks are very strict in terms of loans to private enterprises, and they should always tighten their loans to private enterprises.

At the end of 2008, the balance of China's total monetary M2 was 47 trillion and 500 billion yuan. By the end of November 2013, the balance of M2 was nearly 108 trillion, that is, the amount of printing money was over 60 trillion, and the actual value of private enterprises' funds depreciated to 40% points of the original value.

Another result of banknote printing is that the cost of living has increased by more than 1 times, which means that the cost of employing private enterprises has increased more than doubled.

In addition, in 2009, the exchange rate of US dollar to RMB was 1:6.84, by the end of 2013, the appreciation of RMB rose to 6.05, and the appreciation of RMB reached 13%, which means that the income from private processing of export processing decreased by 13%.

Printing money and appreciation of the renminbi mean that the daily operating cost of RMB linked to RMB in private enterprises has increased by more than 120%, producing the same products, resulting in a total revenue reduction of 13% (more than the profit margin of most export sweatshops).

At the same time, traditional private enterprises do not have preferential policies for state-owned enterprises and foreign enterprises in terms of Taxation, and they must also bear various taxes and fees.

Of course, in recent years, the state has given a lot of care policies to many innovative, entrepreneurial enterprises and small and micro enterprises, such as rent free, tax exemption and so on, especially the slogan of "mass entrepreneurship and innovation", which has made many young people go forward. This is a very good situation, but these private enterprises are not traditional private enterprises. We are talking about the traditional private enterprises.

The private sector that has been bred since the 80s of last century.

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Three, land and other expenses, because state-owned enterprises and foreign enterprises can get a lot of land from the local way, while private enterprises are hard to get preferential land, they must pay high price to buy land. But private enterprises see real estate prosperity, they desperately earn money, naturally through "Jerry building" to reduce costs, slowing down the high cost burden of system squeeze.

And then rushed to the real estate industry.

This led to the disorder of China's industrial structure. So in a period of time, we found that many private enterprises became real estate enterprises after they became big, including clothing, energy and so on, which led to the hollowing out of Chinese manufacturing industry.

The development of private enterprises can ultimately be attributed to "cash flow".

Chinese are generally "small farmers thinking", private enterprises even more.

That is to say, only thinking about the present, only looking at the present "point thinking", and the combination of "linear thinking" that only thinks of the future will become better and better.

In the 2009-2010 year, a large number of private business owners responded to the "national policy guidance" and began to invest in large scale loans. Private enterprises began to expand production after borrowing money, others carried out "diversification" expansion, others borrowed money to invest in real estate, and were prepared to enjoy the benefits of housing appreciation.

When the private sector borrowed money on a large scale, it opened up the "prosperous" situation of the usury industry.

This led to the rapid boom of "private lending" in some places, and then ended in running and bursting. In 2011, Wenzhou, Ordos in 2012, and Shenmu in Shaanxi in 2013, how many people complained of no door? How many families turned their back on them? How many families lost their wealth?

Of course, the imperfection of China's financial market has also accelerated the destruction of many private enterprises.

In the capital market, banks basically stop lending to private enterprises and mainly lend to central and local institutional units.

In addition, many banks require private firms to repay their old loans first, and then promise to give loans again.

However, when private enterprises borrowed private usury to return the bank, the banks immediately turned their faces, saying that there was no quota and no longer to private enterprises.

Beginning in 2011, private enterprises began to feel more and more pressure; in 2012, private enterprises began to feel more and more difficult, many enterprises have been unable to maintain; in 2013, the vast majority of private enterprises have been reluctant to support, only hope that "miracle", so that their business can have a turning point.

Entering the 2014, under the pressure of many kinds of private enterprises, almost all of them faced a desperate situation in 2015.

As a result, the scope of "cluster effect" caused by private enterprises' chain breaking is bigger and bigger. On the one hand, some enterprises go bankrupt from other enterprises after borrowing large amounts of loans from other enterprises, or because they can not repay, or run directly, leading to the related enterprises being dragged into "mire"; on the other hand, they are "related guarantee" loans, represented by Fujian steel trade circle and Wenzhou enterprise circle, and one or several enterprises can drag down other related enterprises because they can not return bank loans, thus dragging down more upstream and downstream enterprises.

Moreover, with the breakup of the capital chain to the "avalanche" situation, the credit sale between enterprises and enterprises has also become extremely cautious.

More importantly, when many enterprises are unable to support, they do not close their doors and fail, but first increase the intensity of credit purchases, that is, borrow more money.

When we can not borrow any more money, these enterprises will directly close their doors and leave their losses to businesses with relatively high integrity and risk prevention awareness.

Many enterprises are running into difficulties because of their upstream and downstream businesses.

And the enterprises that can not support them can not find the next family to take over.

These enterprises can only sell their equipment, office furniture and so on.

Since there are too many people selling equipment in the market and few people expand their production, the equipment is almost sold at the scrap price.

After the collapse of private enterprises, we are running away from the tide. We are extremely reluctant to see this, but it is inevitable.

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In addition, with the decrease of banknote printing in the US QE, the foreign capital flowing into China is becoming more and more limited, which aggravate the fund shortage in China.

At the same time, because of the fact that people basically invest cash in real estate, financial products and usury, their funds have been very limited.

In 2016, financial products and usury will be large-scale default, so that many people "lose their blood".

Meanwhile, the result of the fragmentation of the capital chain is making life harder for the overwhelming majority of the people.

And the purchasing power of the people will basically disappear.

Or, in 2016, the entire domestic demand market will shrink sharply, which is very unfavorable to China's economy.

The collapse of private enterprises in 2014 has already begun, and the situation is intensifying in 2015, which will worsen in 2016.

This means that the vast majority of traditional private enterprises disappear.

The collapse of private enterprises is a chain reaction.

From the perspective of the whole economy, private enterprises' contribution to China's economy is very significant, especially for the whole social employment.

When the collapse of private enterprises began, the direct impact was that millions of people lost their jobs because of the collapse of private enterprises.

Among them, from rural to urban workers, because of low salaries, few buyers in big cities, they often return to their rural areas because of no income.

But in private enterprises, quite a few people are called "white-collar workers". They are those who earn enough money to buy houses.

Once these people lose their income source because of unemployment, they directly face two results: one is unable to provide housing, then they need to sell the house; the two is to stop all consumption except eating and drinking immediately.

Once the collapse of private businesses occurs, these people start selling on a large scale, no matter how the media can flicker "house prices up", they can not stop these people selling waves.

At this time, real estate "just need to buy" will directly become "just need to sell", that is, to eat and drink to sell the house.

And once the real estate sell-off starts, no one will buy a house, and it will also directly lead to large-scale uncompleted residential flats, which will lead to a serious shrinkage in the demand for building materials and related industries.

In addition, when people stopped spending everything except eating and drinking, the demand for household appliances, electronics, textile shoes and hats, restaurants and other industries decreased significantly.

In addition, after a large number of private enterprises closed down, private cars and private cars were also stopped by a large number of vehicles. People began to sell cars, and sales of automobiles plummeted.

These industries have shrunk, which has further led to a new round of bankruptcies in private enterprises, which has led to a new round of unemployment, resulting in a cycle of "bankruptcy - unemployment - stop consumption - more bankruptcies".

Once this cycle is started, it is difficult to stop, that is, through the "chain reaction", the situation of the collapse of the vast majority of private enterprises is formed.

Do not talk about Chinese private enterprises, even if IBM, GE, GM and Kodak, once world-class OSM enterprises, once technological innovation can not keep up, they will still be eliminated.

If any business model breaks away from integrity and morality, bankruptcy is the inevitable result.

It is said that the reason why Buffett refused to invest in US stock listed Chinese concept stocks is because of the following 4 reasons:

1, traditional enterprises' moral defects are too serious. They only follow, plagiarize, copy or even steal.

2, traditional enterprises have neither social responsibility nor the purchasing power of major consumers.

3, technological progress is changing rapidly, weakening the channels and mode barriers of traditional enterprises.

Even if Chinese traditional enterprises satisfy the above 3 conditions, Buffett will not necessarily invest in American stocks, because there are major flaws in the core values of Chinese Enterprises: utilitarianism, money worship, counterfeiting and selling fake goods. The gap between Buffett and the "inaction, selflessness and selflessness" required by management is too great.

Data show that in August 2011, the number of entrepreneurs in China was 4.1, and by August 2012, it suddenly increased to 5.3, which has been a shocking loss spread.

That is to say, since 2012, China's economy has begun to enter the downward track.

In 2013, the number of deficit holders remained at 5.4, and it seemed that the two years could barely survive.

But by 2015, the number of households who lost money increased to 5.9.

The so-called "no break" is not standing, the old will not go, the new will not come.

For China's economic environment, these polluters should have given up their guns. We hope that the Chinese generation can inherit and carry forward the business civilization of the new era, constantly innovate and start businesses, improve the genes of Chinese private enterprises, and create a fairer business atmosphere.