throughout China’s shoes and clothing market, many private entrepreneurs in Wenzhou reported that their sales increased a lot in 2010, but their profits dropped sharply, even worse than those in the financial crisis. Zhou Dewen, President of Wenzhou Small and Medium Enterprises Association, said that the gross profit margin of a large number of traditional small and medium enterprises is only 1% to 3%, and “the pressure of survival is greater than that during the financial crisis.”
during the financial crisis two years ago, many Wenzhou enterprises’ export sales dropped sharply, resulting in some enterprises closing down or stopping production. The situation in 2010 is different. Last year, a large number of traditional enterprises in Wenzhou were under pressure from rising labor costs, rising raw material prices, and RMB appreciation
under the background of inability to transform and upgrade, some enterprises can only choose to “leave”. According to statistics of relevant departments, more than 2000 enterprises in Wenzhou were revoked their business licenses in 2010, half of which were manufacturing and manufacturing related enterprises. Although this is better than the cancellation of more than 3000 enterprises in 2008, the “sharp reduction in profits” still makes the situation of enterprises grim< According to Zheng chenai, President of Wenzhou clothing chamber of Commerce and chairman of Zhejiang aobenni Clothing Co., Ltd., from January to November last year, the output value of more than 300 enterprises above Designated Size in Wenzhou reached 26.4 billion yuan, a year-on-year increase of more than 30%, and the export also increased by more than 20%. However, enterprises generally reflected that "the profit has been very little" in the “Chinese shoe capital” of Wenzhou, a person in charge of a shoe leather enterprise pointed to a workshop and said that there used to be 14 production lines here, but now four have been stopped, mainly because there are no workers. He said that the original wage of workers was 1200 yuan / month, but now it has risen to 1500-1800 yuan / month. Even so, there are still not enough workers it is understood that at present, Wenzhou enterprises are generally short of workers. Take garment and shoe-making enterprises as an example, there is a 10% – 20% employment gap, and there is no large-scale unemployment problem for migrant workers. 1n addition to a slight decline in 2009, the rent of industrial housing still increased by more than 5% in 2010 compared with the same period in 2009 in addition, raw materials have increased by about 20%, and the profit of Wenzhou shoe leather enterprises has decreased from 8% to less than 2% to 3% with the sharp reduction of corporate profits, there are still signs of tax increase. A person in charge of Wenzhou 1ndustry Association said that in order to complete the tax task, some department personnel asked enterprises to pay the tax in advance for the next year, but some enterprises had to pay it first” The tax burden is relatively heavy. ” According to the person in charge, at present, China’s enterprise tax burden is among the best in the world, surpassing most developed countries in addition, energy conservation and emission reduction, interest rate increase and so on are also increasing the production cost of enterprises< 1n the middle of September last year, the relevant departments of Wenzhou monitored the operation of 129 key industrial enterprises in Wenzhou, and the results showed that only 33.3% of the enterprises' profits increased in the third quarter compared with the second quarter according to the analysis of a person from Wenzhou industrial and commercial department, last year, due to the rise of various costs, the phenomenon of “increasing orders and reversing profits” was quite common in clothing, shoe leather and other manufacturing enterprises, and affected the trade and other related enterprises associated with manufacturing enterprises, which made it difficult for many enterprises to continue. Among the enterprises whose business licenses have been revoked, manufacturing and related enterprises account for half. For example, among the more than 500 enterprises whose business licenses have been revoked in Lucheng District, there are more than 300 clothing, shoe leather and other enterprises and related enterprises $$$$$ “under the situation that it is difficult to raise the sales price, the enterprise can only bear the pressure of cost increase by itself.” Wu Jianhai, founder of Cameroon’s China Commodity City, said that unlike the decline in profits of production enterprises, his business profits are better than those during the financial crisis, but far less than those before the financial crisis. Previously, a South African businessman said that due to serious price bargaining, the profit margin of commodity trade has been very low, and the profit margin of clothing, shoes and hats has been less than 1 / 10 of that in 2000, or even lower one phenomenon is that in Yiwu small commodity market, which is closely related to the export of Wenzhou products, many private enterprises are afraid to sign orders New vicious circle ah Sheng says helplessly that it is becoming more and more boring to be an enterprise. He is considering whether to leave the sofa industry which has been operating for many years. “To continue to do it means to wait for death; 1f you don’t keep doing it, what else can you do? “ Zhou Dewen, President of Wenzhou Small and medium-sized enterprises association, said that in the case of a sharp increase in costs and a sharp reduction in profits, a new round of large-scale semi shutdown, shutdown or even bankruptcy of Wenzhou Small and medium-sized enterprises is likely to break out this year, even more than in 2008. At the same time, it also forces enterprises to accelerate transformation and upgrading “the sharp decline in profits helps to promote the transformation and upgrading of enterprises.” Zheng chenai said that about 30% of the garment enterprises above designated size are still in a better position due to their high-end product positioning and good brand marketing. Meanwhile, about 30% of the more than 2000 Wenzhou garment enterprises have their own production bases in the central and western regions in the process of transformation and upgrading, some Wenzhou enterprises choose to enter the high-tech field, such as Chint marching into the solar energy industry, Aokang launching biomedicine, Conch Building hepatitis B immunoglobulin project, etc< 1t is a pity that such transformation and upgrading enterprises have not sprung up in Wenzhou. On the contrary, a large number of Wenzhou enterprises have focused on real estate, resulting in the phenomenon of "big enterprises building buildings and small enterprises speculating in real estate" among the “top 100 enterprises in Wenzhou in 2010”, except for 2 real estate companies and 6 construction companies, more than 40 other manufacturing enterprises are involved in real estate development. 1t is quite common in Wenzhou to use enterprises as financing platforms to obtain a large number of bank loans and invest in real estate and other industries. 1n addition, there are at least seven large-scale real estate development companies formed by manufacturing enterprises in Wenzhou, each with a capital scale of more than 3 billion yuan with the help of industrial capital, Wenzhou’s house price and land price rank among the top in China. From May to August last year, the average transaction price of commercial housing in Wenzhou City was about 28000 yuan per square meter, ranking first in major cities in China. At the end of November last year, the plot of “former wenshiyuan” was won by Xinxin real estate, with the floor price as high as 37000 yuan / m2, becoming the new king of land in China. 1t is understood that confidence real estate is a large-scale real estate development company established by a number of Wenzhou manufacturing enterprises therefore, a clear circular chain appears in front of us: enterprises are difficult to do – capital transfer, real estate prices rise – enterprise costs increase, profits decline – enterprises are more difficult to do “this round of rising cost pressure of private enterprises should arouse the attention of the government and society.” Zhou Dewen said Zhou Dewen said that the state should introduce policies to guide private capital investment as soon as possible, and really implement these policies. 1t’s almost a year since our new 36 articles came out. Up to now, 1 haven’t seen the dawn of these policies. We are looking forward to the good implementation rules and good projects issued by various ministries and local governments. But unfortunately, so far, 1 don’t think there is such good news