What Exactly Is The Problem Of China'S Manufacturing Industry?

In mid October 2016, Premier Li Keqiang studied Dongguan and Shenzhen.

In Dongguan, the focus of the survey is tradition.

Upgrade problem.

In the traditional manufacturing industry, besides electronic products, the typical commodities in Dongguan are shoes.

Dongguan has produced 1/4 of the world's sports shoes.

According to the world clothing and shoe net, it is a pity that 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.

Worse still, a large number of large foundries have been pferred, compressed or even closed.

The size of Dongguan shoe enterprises is constantly losing weight.

From 2008 to now, the remaining capacity of Taiwanese foundries in Dongguan is basically less than 1/3.

Local people have said that before the employment of less than 3000 people is considered a small and medium-sized factories, less than 1000 people are considered small factories.

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

Even worse, even those who can barely survive are struggling with profit and loss.

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.

The mobile phone factory is not much better. Recently, related news about the mobile phone industry chain has appeared frequently.

Dongguan's trillion letter communication company went bankrupt, and the chairman of the company killed herself. In the same period, Suzhou Honghui technology, which made NOKIA's mobile phone buttons, failed to keep up with the development of touchscreen technology. In the meantime, Shenzhen Hongkai Xing plastic products Co., Ltd. issued a notice and announced that it was closed down. Next, Shenzhen Fu Chang Electronics Technology Co., Ltd. broke its capital chain, stopped production and gave up its operation.

Faced with the plight of the footwear industry and the electronics industry of the Chinese manufacturing industry, many people of insight warned 10 years ago: "if we take advantage of cheap land and labor force as capital to attract capital, it is no different from committing suicide."

More experts said: "the traditional manufacturing industry in Dongguan must be pmitted".

But in fact, the manufacturing industry in Dongguan and the mainland is so huge that it is difficult to pform. What exactly is the problem of China's manufacturing industry? Why does it cost less than 1 yuan to buy a pair of shoes?

First of all, the rising cost of manpower has led to the relocation of a large number of manufacturing enterprises in the Midwest or "southeast flight".

According to the world clothing and shoe net, since the financial crisis, the largest sports shoe manufacturer in Dongguan has been produced in the world.

Group (28.95 +2.12%), China's largest

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

As early as the financial crisis came, these enterprises had begun to perceive the unfavorable 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.

In recent years, the labor cost of Dongguan has been rising continuously, forcing some entrepreneurs to make choice of relocation.

According to a business owner, the factory that he put into operation in Kampuchea initially had 3 production lines, about 1500 people, and the basic salary of newly recruited general workers was 128 dollars, 8 hours, six days, plus overtime and other allowances, about 200~250 dollars, less than half of Dongguan shoemaking workers.

Moreover, the high export tariffs make China's manufacturing competitiveness decline.

A pair of women's shoes, even if China and Kampuchea offer the same amount of $9, customers will still choose to place their order 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.

In the end, it is difficult to recruit and recruit skilled workers.

In the first half of this year, the economic situation improved, and many enterprises made more orders. Therefore, enterprises need to recruit more workers.

But it takes a month to get a suitable one.

The biggest problem is that the social structure is changing.

The 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.

Although the manufacturing industry in Dongguan is facing unprecedented challenges, the advantages of Dongguan's manufacturing base are not all depleted, and the status in some fields is irreplaceable.

For example, international buyers, raw materials and high-end manufacturing (AI, net value, information) talents still converge in Dongguan.

At present, traditional manufacturing industry is not easy to do. Only when pformation and upgrading (AI, net value and information) are available, where should Dongguan's manufacturing industry go?

Transformation and upgrading of Dongguan for tens of thousands of manufacturing enterprises, even thinking is a very difficult big problem.

In terms of quantity, it is very scary, because the vast majority of 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.

The use of automated robots (23.94 -1.07%, buy) instead of artificial labor is superior to that of trains, which will solve the problem of labor difficulties and high costs in Dongguan's manufacturing industry.

Local entrepreneurs visited a robotics shoe factory in Germany, a production line that needs 50 to 80 workers, and only 3 engineers are needed if German automation robots are used.

But industrial upgrading is related to whether enterprises have enough capital. Many owners say they can't afford it.

In fact, the pformation and upgrading of enterprises need at least 3 conditions: equipment investment, capital investment and technology input.

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

Many companies choose to quit every year, which is the new normal in the local market.

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What is the way out for China's manufacturing industry? I believe that on the one hand, the traditional processing enterprises with strong strength can no longer sit back and wait for the industry to recover through eliminating backward production capacity, but also to pform from low-end manufacturing to high-end.

For example, production enterprises should have automated or semi automated production lines, have their own brands in the overseas market, and design their own products, so that they can gradually get out of the predicament.

On the other hand, the traditional electronics industry should move forward from the "production" to "production and intelligent manufacturing". For example, during the inspection in Dongguan, Li Keqiang studied the OPPO in Guangdong, and said that your traditional industries from BBK (16.50 -4.01%, buy) have jumped to the production of high-end smart phones, and have broken the cocoon into a butterfly. This is an example of pformation and upgrading of mobile phone manufacturing.

Now, the electronic information industry is updating so fast that only innovative enterprises can survive better.

A whole picture of the whole industry can be seen from the critical situation of Dongguan's manufacturing industry. China's manufacturing industry is in a difficult time. Many small and medium-sized enterprises are struggling with life and death. How to get rid of the difficulties? In addition to removing excess capacity, it is necessary to upgrade the industrial structure.

It will enhance the core competitiveness of China's manufacturing industry overseas, including its own brand, instead of being a foundry of others.

Because the dilemma of China's manufacturing industry is difficult to reverse without pformation.

More interesting reports, please pay attention to the world clothing shoes and hats net.