Survey of the Pearl River Delta: SMEs' Cold Trends in Manufacturing

At 2 pm on July 29th, Li Shuqiu, deputy section chief of the Department of Economics and Information Technology of Dongguan City, took the front desk staff and shuttled between the first floor and the second floor of Jiayuan Garden in Senna City, and brought the people who came to report to the small meeting on the second floor. room.

All these people came to participate in the SME media symposium held by the Bureau. There are 6 companies and 3 media.

At 2:30, the forum officially began. Six business leaders successively introduced the operation of their own companies in the first half of the year and their expectations for the second half of the year. Li Yuqiu has also come up with a large amount of statistical data to illustrate the status of small and medium-sized enterprises throughout Dongguan.

The symposium held by the Dongguan City Bureau of Economics and Information Technology is a microcosm of the Dongguan government. Their purpose is only one—proving that Dongguan has not experienced the closure of SMEs.

Closed tide looming?

A stone provokes a thousand waves. A local media report on the closure of small and medium-sized enterprises pushed Dongguan to the cusp of the crisis. According to the report, with the sudden closure of the senior toy company "Su Yiyi" and the textile company "Dingjiao", a "cold manufacturing industry" in the business sector in Dongguan once again invaded the entire manufacturing industry.

Subsequently, a person from the All-China Federation of Industry and Commerce also stated that the Federation of Industry and Commerce has just completed a major survey of small and medium-sized enterprises in 17 provinces and cities. The results of surveys and studies show that the current survival of SMEs is very difficult and the difficulty level even exceeds the initial stage of the financial crisis in 2008. .

As soon as this news came out, the whole city of Dongguan was caught in a panic. Everyone in the SMEs is at risk; raw material suppliers and banks have paid their money to companies; traders also call to ask about the situation of the processing plants.

The development of the situation quickly gained the attention of the Dongguan municipal government. On the afternoon of July 20th, at the Dongguan Eighth Plenary Session of the 12th Plenary Session of the Dongguan Municipal Committee, the Vice-City of Guangdong Province, Chang Ling, gave a positive response to the current argument that there was a “closed tide” in Dongguan. He said that Dongguan has not only failed to “close down,” but after the 2008 financial crisis, corporate import and export and domestic sales have shown steady increase.

Dongguan City Bureau of Statistics and the National Bureau of Statistics of Dongguan's investigation team released the “Date of the first half of 2011, Dongguan economic operation,” also said that the city's foreign trade and economic development of the main indicators of steady growth. In the first half of the year, the total value of imports and exports was US$62.271 billion, an increase of 14.1% year-on-year. Among them, the total export value was 35.70 billion U.S. dollars, an increase of 15.9%; the total import value was 26.771 billion U.S. dollars, an increase of 11.8%.

At the same time, Dongguan also introduced a number of high-quality enterprises in the first half of the year. Statistics show that from January to June, 846 new projects were signed in Dongguan City, an increase of 493 cases over the same period of last year. Contracted foreign investment reached US$1.988 billion, an increase of 78.68% year-on-year.

"What does such a large increase mean? If the company does not have a business to do, it will not increase investment. Companies that choose to invest in Dongguan also show that the current situation in Dongguan is obviously better than other regions," said Jiang Ling.

In addition, the number of SMEs in Dongguan is also decreasing year by year. According to statistics, from January to June in Dongguan, a total of 266 foreign-funded enterprises were shut down and relocated, which was a year-on-year decrease of 11 and a decrease of 4%. The number of enterprises closed down was at a normal level.

“Although local SMEs do not have strict statistics, from the data reported by the towns, the factory buildings did not appear vacant. The results of the Dongguan Toy Association and the Textile and Apparel Industry Association also showed that there was no large number of companies in the city. Phenomenon.” Li Yuqiu said at the forum.

A person in charge of the company's financial department of a Guangdong branch of a bank in Dongguan said that the number of SMEs in Dongguan City has been decreasing year by year since 2008, and the reduction has been significant. The companies that failed this year are not out of the core companies in the industry chain.

"From the point of view of the rate of withdrawal of funds from the Mainland, there was no significant difference in the first half of this year, and it was far from the point where it hurt. The bad rate is still within control." Confronted with the rumors of a collapse, the name The person in charge is still full of confidence in the SME customer base it serves.

The pressure is indeed increasing Although the closure tide has not appeared, it cannot be denied that the pressure on SMEs is indeed increasing. In the first half of the year, the industrial added value of Dongguan enterprises increased by 11.5% year-on-year, a decrease of 11.2% from the first quarter. Corporate profit growth also fell 8.8 percentage points from the first quarter. In the first half of the year, the loss level of Dongguan enterprises has not reached 52.4% during the financial crisis, but it is as high as 26.7%.

Analysis of the Dongguan Municipal Bureau of Foreign Trade and Economic Cooperation has caused the increase in operating pressure mainly due to the following: First, orders have decreased. As the consumption of European and American markets is sluggish, a large inventory of dealer stocks has been accumulated, especially since entering the second quarter of this year, which is basically in the state of “de-stocking,” and more than 30% of companies have indicated that orders have dropped. The second is the rapid rise in operating costs. Mainly include rising raw material costs, rising labor costs, and rapid appreciation of ***. The third is the decline in profits. Due to the rapid increase in costs, while the low consumption in the European and American markets has caused product prices to be difficult to increase, corporate profits have continued to fall under the pressure of both internal and external pressures, and some companies have even suffered losses.

How to avoid the generalization of individual issues will be the top priority for the Dongguan government in the second half of the year.

Qi Xiaobin, director of the Dongguan City Qile Toy Factory, suggested that the biggest pressure for smaller companies under a hundred is in raw material prices. Whether the country can do some work in controlling the rise in raw material prices. "Now the net profit is about 7%. If it's less than 5%, then it's better to go to work."

The biggest problem faced by medium-sized companies with more than 1,000 employees is **. According to Yu Hong, manager of Dongguan Weihong Group, after the company develops to a certain scale, if it wants to further grow bigger and stronger, it will need to upgrade and transform. To create and cultivate its own brand, all this requires a lot of funds. However, the factory is rented and cannot be mortgaged. It is very difficult to get into the bank. It is hoped that the national and local governments can open the door for corporate financing.

In the afternoon of July 30th, in the Basha Industrial Zone, Gaochun Town, Dongguan, the bosses of 56 SMEs gathered to discuss how to deal with the bank. Prior to this, none of these companies had had bank loans. experience.

"Because the procedures are very troublesome, the threshold for approval is also very high. The company has not considered such channels before." The bosses told reporters.

In the aforementioned information provided by the person in charge of a Guangdong branch of a bank in Dongguan, SMEs did not seem to be a difficult task. The companies listed in the success of a family even had successful listings.

"In the beginning, some companies had assets of 10 million or so, and they did not even have mortgages. We have issued ** in time after inspections and audits, and now we have succeeded in making billions of corporate assets. This is also 10 years. Time.” The person in charge said, “Dongguan has always been known as the 'financial oasis' and the channels are very smooth.”

On the one hand, it is difficult, while on the other it is a matter of hand. Although in the financial products of major banks in Dongguan, there are indeed many channels of corporate **, but the asymmetry of information between the two sides has obviously become the embarrassment of development.

This will bring greater pressure on Dongguan's next step in the transformation, upgrading and development of the company.