Dongguan'S Manufacturing Industry Has Begun To Eliminate Backward Production Capacity.

Before the financial crisis, these enterprises have begun to perceive the adverse environment of Dongguan.

Soon, they traveled to other countries, such as Southeast Asia and Africa, where labor force was richer and cheaper.

At home, they moved to inland provinces such as Sichuan, Jiangxi and Hunan.

On October 12 and 13, 2016, Premier Li Keqiang of the State Council investigated Dongguan and Shenzhen.

In Dongguan, the focus of its research is the upgrading of traditional manufacturing industries.

In traditional manufacturing, apart from electronic products, what is more typical in Dongguan is a daily necessities: shoes.

Dongguan has created global 1/4.

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In the thick street of Dongguan, the workers in Changjian shoe industry Co., Ltd. are now accustomed to the fact that every day at random, several workers will move the newly produced shoes to the car without delay.

In such a large factory area, it appears lonesome and empty.

These include international brands such as CAT, which will sell good quality shoes to Europe and the United States.

Just a few years ago, there was a lot of traffic in the factory area.

In the view of Tong Shuishun, chairman of Changjian shoes industry, Dongguan shoe industry is somewhat similar to that in 2008.

That year, in the wake of the international financial turmoil, Tong Shui Shun was "scared" by the sudden disappearance of orders from factories in the United States overnight.

Over the past ten years, the European and American markets have been cutting orders for this shoe factory, resulting in a 90% reduction in staff.

The shoe industry's dilemma is also enveloped in other traditional manufacturing industries in Dongguan.

Since 2008, as the "world factory", the supremacy of Dongguan's foundry industry has been shaken.

The global economy continues to be weak and export oriented manufacturing industry in Dongguan suffers.

What is even worse is that with the continuous increase of production costs such as domestic labor force, a large number of large foundries have been pferred, compressed and even closed.

Dongguan officials predicted ten years ago: "if we take advantage of cheap land and labor as capital, we will be able to attract capital and commit suicide."

"But not very good."

Jiang Lin, an economics professor at Zhongshan University who was a special researcher in Dongguan, told the first financial reporter that Dongguan's traditional manufacturing industry is "too big."

Labor cost dilemma

Changjian shoe industry is located at the ting Shan community in Houjie, Dongguan. On the two sides of the open street, the "rental" banners that have been shut out of some gates have become obsolete.

Over the past ten years, Tong Shui Shun, now over 60 years old, saw with his own eyes that many "better than me" people kept closing their factories in Dongguan.

It is reported that since the financial crisis, Yuyuan group, China's largest producer of sports shoes in the world, is the largest in Dongguan.

Production enterprises Huajian group, and big group (Oasis shoe industry, Luyang shoes industry), Shun Tian Group (Li Kai shoes industry) are all shifting.

Before the financial crisis, these enterprises have begun to perceive the adverse environment of Dongguan.

Soon, they traveled to other countries, such as Southeast Asia and Africa, where labor force was richer and cheaper.

In China, they moved to inland provinces such as Sichuan, Jiangxi and Hunan.

As a support for Dongguan

Tong Shui Shun, one of the "half sky" Taiwanese businesses, has also cut the company's capacity in Dongguan.

He moved to Dongguan Houjie in 1990 in shoe factory in Taiwan.

Over the past few years, he has pferred most of his capacity in Dongguan to Vietnam and Laos.

I became a "flying trapeze" and kept on going back and forth in Dongguan and above.

Dongguan's rising labor costs forced Tong Shuishun to make such choices.

According to Tong Shui Shun, there are 3 production lines, about 1500 people, in the initial stage of production in Kampuchea. The basic salary of newly recruited general workers is 128 dollars, 8 hours, six days, plus overtime and other allowances, which is about 200~250 dollars, less than half of Dongguan shoemaking workers.

"In Dongguan, recruiting people is difficult and the cost is high."

Xie Qingyuan, executive vice president of Dongguan Taiwan Association, said in an interview with reporters.

Manufacturers choose "southeast flight" not just because of relatively low labor costs.

Tong Shuishun said, for example, a pair of women's shoes, even if China and Kampuchea offer the same amount of $9, customers will still choose to place orders in Kampuchea.

This involves the issue of tariffs.

Because the export of shoes from China to Europe has to pay 15%~20% tariffs, Vietnam's footwear exports to Europe less than 10% of tariffs, while Kampuchea exports to Europe to enjoy tariff free concessions.

Recently, Tong Shui Shun's factory suddenly had more orders. He needed to recruit more workers for this purpose.

But it took him a month to get a suitable one.

"The biggest problem is that the social structure is changing."

He used his own factory to say that people who chose to work in Dongguan were forced to leave their homes because they had no factories in their hometown.

With the rise of the mainland factories and the need to care for their parents and children, many of his employees no longer come back.

At the peak, Tong Shui Shun opened 5 factories in Dongguan, with nearly 10000 employees, but now he has reduced the factories to two, and the number of employees has decreased by 90%, or about 1000.

The size of Dongguan shoe enterprises is constantly losing weight.

For example, Li Peng, Secretary General of the Asian Footwear Association, who has studied nearly 20 years in Dongguan's footwear industry, said that Yuyuan group had more than 100 thousand workers at its peak, but now there are only twenty thousand or thirty thousand people.

Xie Qingyuan said that from 2008 to now, the remaining capacity of Taiwanese foundries in Dongguan is basically less than 1/3.

Li Peng said that before the employment of less than 3000 people is considered to be small and medium-sized factories, less than 1000 people are considered to be small factories.

With the relocation of large factories, around 3000 people are now considered large factories.

Upgrading requires capital.

Tong Shuishun's shoe factory in Dongguan has shrunk to a minimum. The overall business situation is "earning a little bit, losing a little bit, rising and falling."

More than 10 years ago, a pair of shoes with an export price of $5 could earn about $2; about five or six dollars earned five or six years ago; now, exporting a pair of shoes of 15 dollars, or even 1 yuan, can't make profits, and the profit margin is only about 1%, and some orders will also lose money.

They can only flatten the total by breaking up the east wall to make up the west wall.

Tong Shuishun said: "a pair of shoes, we now have no profit."

Even so, he did not choose to close all his factories in Dongguan, one of the reasons is that he worried about those who had been unemployed for many years.

However, Dongguan has the advantage that other places do not have.

After several years of development, although the shoe making level of Southeast Asian countries has been catching up with mainland China, Dongguan is still the world's most important shoemaking base in the eyes of Taiwanese businessmen such as Tong Shui and Xie Qingyuan.

Just like Li Peng and other people who have studied Dongguan's manufacturing industry for many years, many of the relatively high value-added links such as R & D, design and purchase are still in Dongguan. International purchasers, raw materials and high-end shoemaking talents are still gathered in Dongguan.

The factory has been thinking about ways to achieve its own pformation and upgrading, Tong Shuishun said.

In the view of economics professor Jiang Lin of Zhongshan University, the pformation and upgrading of Dongguan, which has tens of thousands of manufacturing enterprises, is a very difficult problem even to think about.

"In terms of quantity, it is very scary."

He said, because most of the enterprises in Dongguan do not belong to their own brands, for these enterprises, there are not many enterprises that are truly capable and willing to undertake pformation and upgrading.

But Dongguan has been working hard.

Dongguan authorities are carrying out "machine substitution" in full swing.

2016 the Dongguan municipal government report shows that in 2015, Dongguan made 2025 strategies to vigorously promote the development of "machine replacement" and intelligent equipment manufacturing.

The city has more than 400 intelligent equipment manufacturing enterprises, and the industrial cluster of robots has begun to take shape.

The advantage of using automatic robots instead of labor is that trains are used for horse drawn vehicles. This will solve the problem of labor difficulty and high cost in Dongguan's manufacturing industry.

Tong Shuishun visited a robotics shoe factory in Germany. He found that a production line of 50 to 80 workers was needed, and only 3 engineers were needed if the robot was produced in Germany.

But Tong Shui Shun's factory did not use automatic robots to replace workers.

He said that upgrading is related to whether enterprises have enough capital.

"Today's automated robots are so expensive that we simply can't afford them."

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Elimination of "backward production capacity" has begun

A similar situation is also seen in another manufacturing giant in Dongguan, the electronic information manufacturing industry.

As the first "famous town of China's electronic information industry", the whole town of Shijie in Dongguan appears rather deserted.

In the workshop of an electronic enterprise located in the middle road of the town, the machine roared, and the HDI circuit board of the production line was continuously produced.

These geometric printed circuit boards will eventually be housed in HUAWEI mobile phones and Zhongxing brand phones.

Dongguan five Electronic Technology Co., Ltd. (hereinafter referred to as "five electronic"), is one of the domestic HDI circuit board manufacturers of smart phones.

Like many electronics manufacturers in Dongguan, five electronics were hit hard by the global financial turmoil in 2008.

But the difference is that it has not only survived, but is becoming bigger and bigger, even preparing for listing.

"This is the growth of counter trend."

Ceng Guoquan, the five chief executive of electronic administration, said.

Ceng Guoquan said that five electronics began pformation and upgrading since 2012.

Replacing manpower by intelligent equipment can increase profit margins for enterprises.

Five electronics currently have more than 3000 employees in Dongguan.

Data from a reporter in five electronic workshops showed that the introduction of "production line machine replacement, reduction of personnel efficiency and quality improvement" showed that the manual total number of workshops needed was 24, and the output was 72 thousand per day before changing the manual drill needle grinding machine into an automatic drill needle grinding machine.

After using the automatic drill needle grinding machine, the total number of workers required in the workshop is only 8, the output is 117 thousand per day, and the total output is 59 times directly and indirectly, and the production efficiency is increased by 6.5 times.

Another information on the introduction of the "production line machine replacement reduction, efficiency enhancement and quality improvement" shows that the total number of workers required by the workshop is 70 before the semi-automatic electrical measuring machine is replaced with an automatic electric measuring machine, and the total number of manual workers required by the automatic electric measuring machine is only 24. The total number of direct and indirect reductions has been 99, and the production efficiency has increased by 3.2 times.

Ceng Guoquan introduced the first pformation of the company to an express train in the smart phone industry. Its high-end HDI products such as mobile phones and PCB are rapidly opening up.

But when it comes to the pformation and upgrading of the company, Ceng Guoquan said, for enterprises, this means that they need enough funds.

"Some of our equipment has been invested too much in the past, and it is millions of millions of people."

He explained that the company's workshop does not currently use all smart devices because of capital considerations.

Capital is the first "stumbling block" that Dongguan manufacturing enterprises have encountered in the process of pformation and upgrading.

"Transformation (upgrading) is OK, but the boss needs to take out a sum of money to exchange robots, and many bosses do not have the money."

A member of the Dongguan Electronics Industry Association, who does not want to be named, told reporters that with the increase in labor costs and the decline in orders, some enterprises have poured out the money they had earned, and even some enterprises have been unable to endure.

The development of Dongguan's electronic information industry has been divided.

Yin Jianwen, Secretary General of Dongguan Electronics Industry Association, said that in the electronic information industry of Dongguan, the development of smart phones is relatively good, while some other traditional electronic processing businesses are not doing well, and some of them have gone bankrupt.

According to previous reports, in 2015, there were 987 electronics and information manufacturing enterprises above Designated Size in Dongguan, and in 2009, there were 1604 manufacturing enterprises in Dongguan above designated size.

In Ceng Guoquan's view, the pformation and upgrading of enterprises need at least 3 conditions: equipment investment, capital investment and technology input.

For small businesses, they may not have enough money to buy advanced equipment, and technical personnel may not be willing to work in smaller businesses.

The world's ultra 1/6 mobile phone comes from Dongguan.

The electronic information industry will become a coach for Dongguan's economic growth.

Reported that in 2015, Dongguan's annual electronic information manufacturing industry to achieve above scale industrial added value of 89 billion 650 million yuan, a cumulative growth of 11.4%, higher than the city's average level of 6.1%, stimulating Dongguan's above scale industrial growth 3.55%.

The city's electronic information manufacturing enterprises achieved 524 billion 8 million yuan in main business income, an increase of 10.6% over the same period last year, and realized a total profit of 12 billion 917 million yuan.

Smart phone is the leader of Dongguan electronic information industry.

According to local media reports in Dongguan, He Yu, former vice mayor of Dongguan, introduced in a public briefing in 2016 that in 2015, the volume of mobile phone production in Dongguan was 274 million, of which 260 million were shipped by smartphones, accounting for more than 1/6 of the world's market share.

This is equivalent to at least 1 of every 6 mobile phones in the world from Dongguan.

He Yu said, at present, Dongguan has HUAWEI terminal, vivo and other whole machine manufacturing enterprises, as well as large scale foundry enterprises and supporting processing enterprises. In the direction of smart phone industry, the whole industry chain form of "brand + foundry + matching" has been formed.

In 2015, the development plan of Dongguan smart phone industry base (2015 - 2020) showed that through the efforts of 4 to 6 years, Dongguan plans to enhance Dongguan's capability in mobile phone manufacturing, R & D, industrial incubation and driving capability, so that Dongguan can truly become an influential manufacturing base, R & D center and incubator base in the world.

According to the plan, by 2017, the annual output of smart phones in Dongguan base is nearly 280 million, with a total output value of 190 billion yuan. By 2020, the annual output of the base smart phone will exceed 360 million, with a total output value of more than 270 billion yuan.

The development of Dongguan's electronic information industry is also concerned by Premier Li Keqiang of the State Council.

According to the Chinese government's website, in October 13, 2016, when Li Keqiang inspected Dongguan, the local responsible person made a report. At present, the industry differentiation is obvious, the traditional clothing and clothing processing has dropped by 15%, but the electronic information industry has increased by more than 20%.

Li Keqiang said that this trend shows that the new and old kinetic energy is accelerating pformation.

We hope to maintain the momentum of development and let the new momentum gradually take the lead.

During his visit to Dongguan, Li Keqiang studied the OPPO in Guangdong, and said that you have jumped from the traditional industries of BBK to the production of high-end smart phones today.

Public information shows that the OPPO mobile phone is born in BBK, and now it has entered 19 countries and regions, and its shipments are fourth in the world and second in China.

OPPO public relations manager Zhu Xiaojuan told reporters at 1 degrees C that the main experience of OPPO's pformation and upgrading is the following: first, to speed up product upgrading with precise demand, and the two is to drive technological innovation as a driving force to enhance the sustainable development capacity of OPPO.

On the second point, OPPO2015 invested 1 billion 500 million yuan in research and development, and has more than 3000 R & D personnel.

OPPO introduced the world's top equipment such as SIEMENS, Japan and Fuji. The import of equipment increased from US $17 million 10 thousand in 2008 to US $84 million 460 thousand in 2015.

"Every year there are enterprises withdrawing and new enterprises and brands coming in. This is a normal situation."

Zhu Xiaojuan told reporters another material said.

In Ceng Guoquan's view, the updating of electronic information industry is so fast that only innovative enterprises can survive better.