How To Make A Barely Viable Manufacturing Industry?

China's traditional manufacturing industry is facing severe challenges due to the impact of the world economic downturn, domestic and foreign market weakness, and global industrial transfer. In the Yangtze River Delta, one of the most developed regions in China, employment and other costs have risen rapidly in recent years, and the manufacturing industry is also not optimistic.

How to cope with the downward pressure of the economy? How to deal with the reduction of customers and the decline of orders? Transformation Recently, reporters visited several small and medium-sized manufacturing enterprises and experts in the Yangtze River Delta region, looking for the root and exploring the way out of the traditional manufacturing industry.

Macroeconomic data almost fell across the board. According to the April statistics released by the National Bureau of statistics, from the "three carriages" of traditional economic growth, the export growth rate dropped from 4.1% in March to 4.1%, the consumption growth rate dropped from 10.5% to 10.1%, and the investment growth rate also dropped from 10.7% to 10.5%, while the decline in investment was mainly caused by the manufacturing industry. Infrastructure Investment growth slowed down.

Manufacturing seems to be the biggest force in the overall economic downturn.

The China Manufacturing Purchasing Managers Index (hereinafter referred to as "manufacturing PMI") released by the China Federation of logistics and purchasing and the National Bureau of statistics service industry survey shows that in February this year, manufacturing industry PMI was 49, a record low since August 2012, and it was lower than 50 of the seventh consecutive months. manufacturing industry PMI was 50.1, and 0.1 percentage points lower than last month.

Among them, the plight of small and medium-sized enterprises is the most prominent. In April, the PMI of medium-sized enterprises was 50, and the PMI of small enterprises was 46.9.

Although the scale can be maintained, profits are significantly reduced.

"At present, our net profit is basically 3%~5%, and ten years ago, we had 15%~20% net profit, and some products' profit point might still be over 20%." He lamented to reporters that money is getting harder and harder now.

Mr. ho recalled that before 2013, the market was pretty good. After the financial crisis in 2008, there was a brief downward process, and after 4 trillion investment, it rose again, which is basically the same as before. However, in 2011, the money began to tighten. There was no money in our pockets, and demand fell. Manufacturers will grab the list and fight the price. After a round of rounds, the profits of the enterprise will come down.

In addition, the rising cost of labor is also a problem for owners of small and medium-sized businesses. He told reporters that compared with ten years ago, the cost of labor has now tripled, and from 2005 to 2007, the wages of workers are around 1800~1900 yuan, and now it is five thousand or six thousand. On the other hand, the social security base is being raised every year, which is also a great number.

As an important manufacturing base in the world, the Yangtze River Delta region suffered a great impact on this downward economic downturn. Earlier, there were media reports on the performance of Listed Companies in three provinces and one city in the Yangtze River Delta region (Jiangsu, Anhui, Zhejiang and Shanghai) in 2015. The negative growth rate of Listed Companies in three provinces and one city listed companies exceeded 30%, of which Anhui was the highest, 49%; Jiangsu, Zhejiang and Shanghai were 40%, 38% and 33% respectively.

Data show that there are 600 manufacturing enterprises listed in three provinces and one city, of which 63 are net profit, that is, 10% of the manufacturing enterprises in the Yangtze River Delta have reported losses in 2015.

"In the first two years, the industry has lost a number of companies nationwide, and the industry is still at a low ebb." Mr. Ren, a boss of leather manufacturing enterprises in South of Jiangsu, told reporters that the annual output value of their enterprises is between 170 million and 200 million yuan.