Butterfly Effect Has Not Yet Appeared: Pearl River Delta: The Coming Of The Winter Of Small And Medium Enterprises?

Whether or not the "closure" of the senior toy enterprise "Su Yi" and the textile enterprise "Ding Jia" are predicted?

Butterfly effect has not yet appeared.

"Generally speaking, the business situation of Dongguan is still relatively good."

Jiang Ling, deputy mayor of Dongguan, thinks that it is understandable that the reasoning from several enterprises' failures to Dongguan may be closed down, but this is not the case.

Despite the official denial of the "collapse tide", the failure of Su Yi or Xue Baiqing, who runs the plush toy factory in Guangzhou Baiyun District for nearly 10 years, is worried about the development prospects of the toy industry.

In his view, as a veteran manufacturer of Korean plush toys, the strength of vegetarian art is very strong, "its collapse is typical, so that our pressure will come up."

"This is the third time this year that we have taken the initiative to lower the price order, but we have earned it.

Xue Baiqing calculated such an account: if the cost of raw materials alone is increased, the current price of cotton will probably be 25000 yuan / ton, compared with the historical high level of 34870 yuan / ton in February this year, the price has dropped, but compared with last year, it has increased by nearly 10000 yuan / ton, plus labor cost, the cost of production in the past year has nearly doubled.

"In this way, about 3 of the order is zero profit, and another 7 of gross profit margin is only 8%, with an average net profit of only 3%."

Xue Baiqing's statement was confirmed by Chen Rui, a medium-sized toy dealer in Tianhe District, Guangzhou.

"I know a few companies that have reduced the profit margins to order."

In the Pearl River Delta, pressure is widespread throughout the manufacturing sector.

Chen Yaohua, President of the Dongguan textile and garment industry association, admitted in an interview with reporters that the total bankruptcy or closing down will not exceed 10%, but "this is already a great pressure".

The reduction of production has also become an emergency measure for these disadvantaged enterprises.

Chen Rui told reporters that with past experience, after summer, this should be the traditional order season of most industries in Dongguan.

"But this year there is a general reduction in production in factories everywhere.

In the factories that we cooperate with, the enterprises that have reduced production have such large foundry towns as Liaobu, Houjie and Humen.

Most of these phenomena did not appear before the Spring Festival.

"Drinking poison to quench thirst" is helpless.

Although the Pearl River Delta has not yet seen a large number of small and medium-sized enterprises close down, but the financing difficulties lead to many enterprises' capital chain breaking phenomenon is still not optimistic.

"Financing is not the only reason for SMEs to get into trouble, but it is likely to become the last straw to crush SMEs."

Many respondents said that although the central and local governments are pushing to solve the financing difficulties of SMEs, in fact, more and more small and medium-sized enterprises still have no financing.

When reporters saw Zhang Rixin, who was engaged in the import and export processing of Arts and crafts in Zengcheng, Guangzhou, he said with a smile that he was "poor and had only factories left."

Last year, after mortgaging the house and car, the loan was far from enough to recover the cost of production. Finally, he had to borrow "private lending" at a rate of 10%.

Why not choose low interest bank loans when private lending rates are high?

"There are a lot of rough processing enterprises in the Pearl River Delta. The management level of enterprises is relatively low, financial reporting is not standardized, and there is no credibility. In addition, the financing risk of SMEs is too high. Banks are reluctant to make loans to SMEs from the perspective of loan costs and risks."

A researcher from the banking regulatory bureau admitted in an interview with reporters.

Some experts commented that small and medium enterprises borrow money from usury is "drinking poison to quench thirst".

But in Zhang Rixin's view, he is more willing to use "rather to enrich the rich enterprises, not to give the poor enterprises a timely help" to describe the financial institutions' "love the poor and love the rich".

He said that the difficulty of enterprise financing is an old problem. Only when the external business environment of the enterprise deteriorates, the problem that has never been effectively solved has been enlarged again.

Not only the traditional generation processing enterprises, even if the strength of emerging enterprises, in the current bank capital side of the overall tightening, in order to get the loan smoothly, for the enterprise to develop faster, is also a difficult thing.

"We have technology and talent. The biggest problem now is the large amount of financing needed for expansion, but this year we have encountered the tight credit policy of the banks this year.

Although the company has fixed property mortgage and bank credit is good, the loan is still very difficult.

Zhang Ting, Department Manager of Mingxin Sanitary Ware Co., Ltd., adding that the procedures for bank loans are rather complicated, and very few SMEs apply for bank loans.

Transformation and upgrading is the best policy.

Before the "three big mountains", the small and medium-sized enterprises in the Pearl River Delta began to choose migration and pformation.

There are many options for migration, some of them are turning to Southeast Asia where production costs are cheaper, some of them are turning to better local policies, while local businesses are trying to pform, brand and domestic sales, but these require strong strength and time to support them.

"The government has been trying hard to pform, but the difficulties of rising production costs and RMB appreciation have been pressing on us. Many enterprises have no room to turn around."

Shen Hong, the boss of Dongguan determined toy factory, still lacks confidence in the development of the factory.

In fact, most people in the industry believe that under the present circumstances, even if there is a "collapse tide", only those small and medium-sized traditional enterprises without core technology will be faced with zero profits.

"When the industrial environment changes, the pressure of these enterprises will increase sharply."

Li Minghui, manager of Guangzhou Hongwei business service, who has business dealings with a number of foundry enterprises, also believes that after 08 years of financial crisis, many enterprises began to learn to "prepare for rainy days" and look for various ways to deal with the possible predicament. This is why this year there has not been a large-scale "collapse tide".

"If we actively persuade our clients to adopt RMB cross-border trade settlement to avoid the risk of RMB appreciation, many companies will increase their independent innovation and talent introduction, improve their management level, and pform enterprises from export to domestic sales."

But Li Minghui admits that most of them are big companies with big financial strength. "Small and medium-sized enterprises still have many practical difficulties."

"Upgrading is not possible in the short term."

Jiang Lin, a professor at south of the Five Ridges College of Zhongshan University, thinks that although the industry has reached a consensus on the pformation and upgrading of industries, the traditional manufacturing enterprises that have not been upgraded and pformed successfully will have "orders to continue to do" if they have orders on hand.

Jiang Ling, vice mayor of Dongguan, insists that upgrading and pformation is the ultimate way out: "the current economic situation, the Dongguan municipal government has long been aware of that, and is now studying the response plan, but the most fundamental solution is the upgrading and pformation of enterprises.

Later, the government will continue to help enterprises upgrade and pform.

Although the road of pformation can not be achieved overnight, we can see that the Pearl River Delta's thinking on the road of pformation has become increasingly mature.