Wenzhou Manufacturing Industry Faces A Huge Shock

An auction notice has caused a great shock in Wenzhou. "Wenzhou's largest construction enterprise, Wenzhou Zhongcheng Construction Group Co., Ltd., the 500 largest private enterprise in China, has auctioned all shares at the base price of 42 million 160 thousand yuan."

Not only is the real estate industry vibrant, but there are many shoe factories and lighters factories in Wenzhou.

And other manufacturing enterprises.

The Yangtze River Commercial Daily reporter came to an industrial park in Wenzhou, which is known as "China Shoes Capital". "I drove a Mercedes Benz with a shoe factory owner a month ago. He was caught in real estate and sold by car. He took the bus on his own and I opened the taxi."

When the reporter took a taxi in the street, the taxi driver introduced him.

In the shoe factories in Wenzhou, from the boss to the workers, they are worried about not getting the list.

This is also a microcosm of Wenzhou's small and medium-sized manufacturing enterprises. Some experts say that Wenzhou's small manufacturing industry will usher in a bankruptcy wave.

Lonely "shoes capital"

In January 14th, when the reporter took a taxi from the downtown of Wenzhou to the West and approached the scope of the Double Lane Village, there were many signs of "so and so shoes" on the roadside.

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"China Shoes Capital" is located in an industrial park of Shuang Yu village, Lucheng District, Wenzhou, where thousands of shoe factories and shops are gathered.

The size of these shoe factories is between dozens of people and five thousand or six thousand people. In the rush hour, there are more than 300 thousand workers in the industrial park.

Driven by these workers, both sides of the industrial park are covered with large numbers of restaurants, cell phone stores, supermarkets, and even post offices, which are completely like a small town.

In Wenzhou, there are many other places like the twin Island Village, which take a certain product as the core and gather together to form an industrial park. Among them, glasses, shoes, toys and lighters are well known in the world.

"China Shoes Capital" industrial park is the epitome of Wenzhou's private economy.

It happened that at noon, workers rushed out of the buildings on both sides of the road. At the door of many shoe factories, they spread stalls, stocked all kinds of shoes, and sold at the bottom price, attracting workers to come forward.

According to the introduction, this is a low priced product in the factory.

On the bridge near the industrial park, the Changjiang Daily reporter met two workers from a small shoe factory.

Xiao Ke came from Jiangxi. "It's almost a year. In a small factory, there are only more than 50 people. The factory does not produce shoes on its own. It is mainly processed in large factories, and shoes are drills."

Xiao Ke said, a pair of shoes can earn 5 yuan more money, sometimes can earn 7 yuan, earned 6000 yuan last month.

"Now it is half less than last year."

Xiao Ke was brought to Wenzhou by the old man Hao Zi.

Hao has worked in shoes for six or seven years. He spent twenty thousand months in a month in several different factories.

"I did ten thousand at the most last year. I only had one week off in the new year, and I couldn't finish my work.

Half of the people in this factory have been on vacation for the first time, and have been back for a month.

I took a holiday yesterday and went home for two days.

Xiao Ke said, there are not many people in the factory now, and most of them are on vacation.

For Xiao Ke's age, it doesn't matter whether it's a holiday or not, but for other workers who work for more than two years, one day's vacation is a loss of money.

"I only had more than 4000 yuan last month. I have no list.

In a regular shoe factory for more than 5 years old Wei said that both his wife and his wife in the industrial park, 2014 income gradually decreased, especially in the second half of the year, almost no additional classes.

The children at home are going to school soon. Lao Wei is hesitant to continue to work next year.

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Manufacturers' confusion

"Our factory has 4 production lines, three stops, only one left to work.

I dare not go all the way, afraid that I won't be able to recruit people next year.

Lao Li, head of a shoe factory with more than 2000 workers, said that the industrial park generally had a holiday for more than a month earlier than last year, but it did not dare to stop completely. How much is still maintaining production, giving workers the confidence to return to factory next year.

What to do next year?

Lao Li is very puzzled.

Yang Hua, general manager of a small shoe factory, is also confused.

Yang Hua, who is just 30 years old this year, worked as a nurse and decorator. In 2013, he took out 700 thousand savings and opened a shoe store.

Then she went to her uncle's factory to help with the business and to sell to the mainland market.

"Now I don't know what kind of shoes to do better, I don't know what kind of shoes the market needs."

Yang Hua said that before last year, the factory will launch 20 new styles every quarter, and now only seven or eight can be launched. "Taobao favors cheap and simple goods, and shoes factories are producing all those styles.

If the wholesalers go around for half a day, they will not be able to push more than one or two yuan.

In Yang Hua's shop, Mr. bear from Chengdu wholesalers couldn't help telling reporters Tucao, "if it's not for kids, I won't do this job."

Mr. Xiong made shoes business in Chengdu and Shenyang. Two years ago, he had to go to Wenzhou two times a quarter, picking goods and loading goods. Now she can only come in one season, and the quantity is only half the original.

In his view, the electric business has squeezed its market, and at the same time, when the shoes factory products arrive at their own stores, the style is no longer popular.

"The price of one meter leather has increased by 10% this year, and labor costs and venue fees are rising. The new products will not be able to go, and next year will be very sad."

Yang Hua said, in recent four or five years, shoe factories are becoming more and more difficult to manage, and the factory does not know when it will fall.

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Another round of closure

Yang Hua's worry is not worrying.

In Wenzhou, where manufacturing is concentrated, business failures are not new. They are staged several times a year in various industrial parks.

According to the statistics available, there are ten manufacturing industries in Wenzhou collapsed every year since 2009.

In 2011 alone, there were hundreds of businesses in Wenzhou where the boss was missing, the company went bankrupt, and the staff paid for wages.

Such as Wenzhou's well-known three flag group, Portman, Jiangnan leather and a number of private enterprises.

Among these bankrupt enterprises, Wang Yuejin, who has "one generation of shoe king", has run away with 2 billion of his debts, and has brought tremendous shock and influence to and outside the industry.

In August 16, 2009, some of the workers in the Buli shoes industry were still busy in production. A vice president suddenly announced that according to the boss Wang Yuejin, the enterprises stopped working.

This factory has been built for 15 years, and the shoe factory in Wenzhou is the first shoe factory to be described as "sudden death" by the local government.

At that time, it was called "by the public".

Wang Yuejin has evaporated for a long time.

According to the information released later, the bullying group was in arrears with 4 local bank loans totaling 106 million 500 thousand yuan, and about 7000000 debtors (registered suppliers) owed 49 debtors. In addition, a well-known clothing company in Wenzhou secured a loan of 40 million yuan.

In September 22, 2011, Hu Fulin, chairman of Wenzhou Xintai group, the biggest eyeglasses enterprise in Zhejiang, suddenly declared bankrupt to the workers through their subordinates, and fled to the world alone.

The industry predicted that he had already lost 2 billion of his debts when he fled. His debt relations involved nearly 10000 people and dozens of enterprises, including Xintai and downstream businesses and creditors. This incident triggered a major earthquake in Wenzhou's business community.

In September 25, 2011, 3 Wenzhou business owners fled at the same time. In the afternoon of September 27th, the owner of Wenzhou Zheng Deli shoe industry jumped off and died from the debt problem from the 22 floor of Shun Jin mansion in Wenzhou.

There is even a "bankruptcy list of enterprises in Wenzhou" on the Internet. On the list, only 2011 enterprises in Wenzhou have gone bankrupt, 22 of which are well-known local shoe factories, hardware factories and spectacles factories.

Although some enterprises came out to refute rumors, they said they were still producing, but for a while, the local people in Wenzhou were in a state of panic.

"This year's situation is not good, more than half of the enterprises can not get the list of early holidays.

After the Spring Festival next year, the form is even more serious. Many manufacturing enterprises have to stop production, and it will be a wave of closure. "

Zhou Dewen, vice president of China Association for SME Cooperation and President of Wenzhou SME Development Association, said.

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Difficulties under internal and external pressure

In the 90s of last century, it was the "golden ten years" for the rapid development of Wenzhou's manufacturing industry.

At peak time, 30% of the country's clothing and shoes and 90% of the world's lighters were produced in Wenzhou.

After 2000, affected by the global economic downturn, coupled with the slowdown in domestic economic growth and the sharp rise in human costs, manufacturing industry, once proud of Wenzhou people, began to fail.

"At present, the profit margin of Wenzhou's manufacturing industry is only 1% to 3%. Enterprises in traditional manufacturing industries such as clothing, footwear, glasses, lighters and so on are dying every day."

Zhou Dewen believes that Wenzhou's manufacturing industry is also under the dual pressure of domestic policies and shrinking foreign markets.

Zhou Dewen introduced that after the global economic crisis in 2008, the overseas orders of Wenzhou's manufacturing industry had been sharply reduced, and most of them had been turned into introverted enterprises.

At home, in recent years, there has been a tight fiscal policy. Private sector manufacturing financing has been difficult to expand in the past. Wenzhou's private financing has suffered a severe crash since 2011. Wenzhou's manufacturing industry is now generally short of money.

"Since 2009, the volume of retail sales of my business in Europe and the United States has decreased by 60%."

Huang Fajing, the owner of the sunfeng lighter factory, introduced the debt problem in Europe, America, Japan and other countries after the 2008 economic crisis. The overseas market has been in a difficult situation.

Huang Fajing said that the lighters in Wenzhou are mainly metal products and have been subject to certain market restrictions.

Before 1997, Wenzhou also made plastic lighters, but because of a serious fire, the city government began to ban the production of plastic lighters locally.

"Consumers buy a plastic lighter for a piece of money, throw it away, and a metal lighter does not work."

Huang Fajing said that labor costs and material costs have risen, and the profits of metal lighters have decreased. Plastic lighters are widely accepted and have seriously squeezed the share of metal lighters.

"This is just a small example.

At home, consumers' consumption tendency is changing, and manufacturing enterprises can not keep up with innovation.

Huang Fajing said.

Not only shoe factories and lighters, but private enterprises in Wenzhou are bogged down in the mire. "Hard shouldered" has also become the secret of entrepreneurs.

Opinion

At present, the profit margin of Wenzhou's manufacturing industry is only 1% - 3%, and the traditional manufacturing industries such as clothing, footwear, spectacles, lighters and so on are dying out every day.

Wenzhou's manufacturing industry is now under the dual pressure of domestic policies and shrinking foreign markets.

Zhou Dewen, vice president of China Association for SME Cooperation and President of Wenzhou SME Development Association