"Forced Mechanism" To Promote The Pformation Of Shoe Enterprises

30 years ago, the private economy and private enterprises in Zhejiang had taken the lead of reform and opening up and vigorously developing the market economy. Together with the diligence and innovation of Zhejiang businessmen, they began to thrive in small workshops and grew rapidly into a new and powerful force in the past 30 years.

Yiwu's small commodity market, Ningbo clothing, Wenzhou leather shoes and some other regional characteristics of Zhejiang's private economic brand, China's first private enterprise, the first professional market, the first stock cooperative, the first agricultural cooperatives and the first peasant city were born in Zhejiang.

Today, the situation at home and abroad has undergone tremendous changes. The high cost era of manufacturing industry is coming. Can Zhejiang private enterprises continue their past glory and continue to a new stage under the "forced mechanism" of "cold wave"?

How can we break through the difficulties through industrial pfer and upgrading to achieve another magnificent turn?

Please look at the recent survey on the pformation and upgrading of the Zhejiang folk enterprises by the China Economic Times reporter.

Zhejiang Ningbo Taizhou Wenzhou Coastal Expressway connects three cities with the most developed private economy: Ningbo, Taizhou and Wenzhou.

In mid August, in order to investigate the real survival and development of Zhejiang's private sector, China's Economic Times reporter has traveled many times on this highway and between the three cities.

On both sides of the road, typhoons had ravaged the land, and many of them were still shrivelled. Numerous advertising pictures were torn to pieces and hung on high overhead iron shelves.

However, the typhoon has passed for nearly a month, and the owners of these billboards are still looking for them in the future.

These fragmented advertisements cannot be known. Their owners are also encountering an unprecedented "typhoon" attack, which is in great distress to cope with this "miserable wind and rain".

Since the reform and opening up, it has been the most developed and active area of the private economy in China. Today, what troubles do the private enterprises have encountered and how they can pform and upgrade to cope with the deteriorating living environment.

Recently, the China Economic Times reporter has conducted more than ten days of investigation and interviews in Wenzhou, Taizhou, Ningbo and Hangzhou.

The drastic change of situation, the shoe making center of Wenzhou, the "China Shoes Capital" Industrial Park, has opened the prelude to our investigation.

In the afternoon of mid August, a lot of shoe companies in the industrial park closed down early in August. Compared with previous years, the enthusiasm of shoe manufacturers this year has been greatly frustrated.

According to the analysis report on the economic operation of shoe leather industry in the second quarter of 2008 provided by the footwear industry association of Wenzhou, more than 100 enterprises of Wenzhou shoe enterprises have failed to switch production in recent months. The report points out: "with the increase of various pressures, there will be a trend of further intensification of production and failure."

A staff member of the park told reporters that in fact, the shrinking of the number of enterprises in the shoe industry in Wenzhou is a sustained trend in recent years.

According to him, in 2003, there were about 5000 shoe manufacturers in Wenzhou, and by this year, the figure has turned to 2600.

In the most prosperous period of footwear industry in Wenzhou, 40% of the world's shoes were produced, and 60% of them were exported abroad.

Over the years, because of its low cost and low market selling price, it has repeatedly initiated anti-dumping activities overseas, and even encountered the "shoe burning incident" of competitors.

No doubt, in the midsummer of this scorching sun, many manufacturing enterprises in Wenzhou, including shoemaking, have encountered "nine cold days". The brutal fact is that Wenzhou, as the birthplace of China's manufacturing industry, has 34 industrial cluster production bases, and the survey data from Wenzhou folk machinery show that 20% of the more than 30 manufacturing enterprises are currently in a state of shutdown or semi shutdown.

The boss of a local shoemaking company said that they had been "struggling".

Reporters in Wenzhou Longwan and Ouhai Industrial Park, Taizhou Jiaojiang economic and Technological Development Zone to see, many buildings have been vacant, many enterprises have changed careers, in the production and half stop production enterprises can not be counted.

Zhou Dewen, who interviewed reporters on the situation, explained that, like most other parts of the country, Wenzhou's manufacturing industry was mostly labor-intensive light industry, which was developed by family workshops in the early days of reform and opening up. It was a product of adapting to the social environment at that time.

In the past 30 years since reform and opening up, most private enterprises in Wenzhou have completed the "quantity accumulation" and began to enter "quality improvement".

But in this crucial pition period, the macroeconomic situation and the problems of Wenzhou's own personalization lead to the test of Wenzhou private enterprises.

With the continued depreciation of the US dollar and the increase of global inflationary pressure, with the implementation of the labor contract law, the labor cost of enterprises has increased, the bottleneck of land constraints has become more prominent, the prices of raw materials and energy have continued to rise, the real estate market has continued to heat up, and some enterprises have been listing and financing, and the implementation of merger plans and intensification of anti-dumping has intensified. Wenzhou's low cost and low price manufacturing advantages have ceased to exist, and the results of various factors have resulted in a large number of Wenzhou private enterprises in a dilemma.

Zhou Dewen, President of the Wenzhou SME Development Association, is an active promoter of Wenzhou's private economy and Wenzhou's development model. It has studied and followed changes in Wenzhou's private economy and private enterprises for more than 20 years, and many factors at home and abroad have made it difficult for Zhejiang's private manufacturing enterprises to survive at low cost, low market prices and low profits. Since the second half of last year, many Zhejiang private enterprises have encountered unprecedented pressure. In August 25th, the newspaper reported many times about the financial crisis and grim situation of Zhejiang private enterprises.

When the large private enterprise Leapfrog Group and the golden Wu group have been exposed after the capital chain break, and the survival problems of private enterprises have been widely reported, many academics and politicians appealed that "to safeguard the private economy, we should treat the private enterprises fairly and fairly, and the resources should be shared by the Zhejiang".

All the entrepreneurs and scholars interviewed by reporters agreed that such an appeal is necessary.

Because private economy has become an important part of the socialist market economy. At present, besides the state-owned and state holding economy, the generalized private economy has accounted for about 65% of GDP, and the private and private economy has accounted for about 40%. According to the increments of China's economic development, 70% to 80% come from the private economy.

From the private enterprises in Zhejiang, Zhejiang has created 7.5% of China's gross domestic product by nearly 1% of the land and 4% of the population in China. Zhejiang's private enterprises have created more than 70% of the total GDP, more than 60% of the tax revenue, 76% of foreign trade exports, and 90% of the new jobs. Among the 500 private enterprises in the country, Zhejiang accounts for 203 seats, ranking the first in the country.

The State Council passed the guiding opinions on further promoting the reform and opening up and economic and social development in the Yangtze River Delta in August 6th. The guiding opinions have deployed ten key tasks for the Yangtze River Delta region, including speeding up the readjustment of industrial structure, striving to form an industrial structure dominated by modern service industries, comprehensively promoting the optimization and upgrading of industrial structure, and striving to build an international advanced manufacturing base.

"The central documents have taken a reassurance for Zhejiang to develop private economy vigorously, and the central spirit is to encourage the development of private economy."

Ma Jinlong, director of the Policy Research Office of the former Wenzhou Municipal Committee, told reporters.

It is understood that Zhejiang is looking for a way to enhance competitiveness through re planning regional development, upgrading the industrial chain and improving technological content. Through continuous reflection, innovation and self pformation, it will accomplish the great pformation from "Zhejiang manufacturing" to "Zhejiang creating".

In the fifth meeting of the Standing Committee of the eleven National People's Congress of Zhejiang province held in late August, Lv Zushan, governor of Zhejiang Province, put forward the report on the economic situation of the first half of the province and the government's work in the second half of the year, and suggested that the second half of the year should speed up the pformation and upgrading of the economy.

According to Lv Zushan's statement, we should make full use of the "forced mechanism" to promote the reform and reorganization of enterprises, accelerate the implementation of "double thousand projects" in technological pformation, select a batch of traditional processing industries to carry out the pilot projects, and promote the pformation of enterprises from processing to R & D design and marketing.

The Zhejiang provincial economic and Trade Commission's report pointed out that we should consciously apply the "forced mechanism" of industrial growth and decline, and unswervingly push forward pformation and upgrading with the trend of "Phoenix and nirvana" and "lifting cage and changing birds".

In the face of the coming of the high cost period, we should focus on the development of high value-added industries and products to resolve the high cost constraints.

A private economic research center in Zhejiang said that the upgrading of the private economy and the pformation of development mode are becoming new requirements for the development of the new era. It is good for the long-term development of China's economy, and is conducive to get rid of the hard constraints of resources and environment on economic development.

It is very important to speed up the pformation and upgrading of private enterprises. It will be an important sign of Zhejiang's rapid economic development towards internationalization.

In the drive of the global economic trend, enterprises are undergoing great changes. A quiet revolution is going on. By participating in foreign capital mergers and acquisitions and independent mergers and acquisitions, we will re - shuffle the cards and speed up industrial restructuring. At the same time, through the "going global" strategy, we will integrate resources into the global scope for my use and enhance our strength.