If the cost rises, if the product does not increase its price, the loss will increase. If the price rises, the buyer will turn away, which is very helpless.
Since March rose to 33,000 yuan per ton, the cotton price has dropped to 24,000 yuan per ton today. In the cotton roller coaster period, the textile and garment export data seems to be more beautiful. Customs statistics show that from January to May this year, China exported about 20.328 billion US dollars of textiles and clothing, a year-on-year increase of 23.77%, an increase of 2.33%. The export of textile yarns, fabrics and products was 8.619 billion U.S. dollars, an increase of 23.68% year-on-year, a decrease of 1.69% month-on-month; exports of clothing and clothing accessories were 11.719 billion U.S. dollars, an increase of 23.85% year-on-year, and an increase of 5.51% month-on-month.
However, no enterprise is pleased. “Actually, in terms of the number of orders, we did not see any growth compared to last year, even a 10% decline. There were also orders that we could not meet, but our export volume increased by more than 20% year-on-year. This is a big part because we have increased the price of factory clothes by more than 20%,†said a person in charge of a woolen factory in Dalang Town, Dongguan City.
Not only textile and garment companies, but also labor-intensive, easily copied bags, footwear and hat industries also encountered the same situation. The reporter visited the survey and found that the price increase was more serious, mostly for labor-intensive, low value-added industries such as footwear, textiles, clothing, and luggage. The price increase of such products led to a rebound in the European and American markets, and the situation of order loss has continued for more than half a year.
Shoes and hats have fallen into a mud quagmire. Since last October, the situation of falling prices in footwear, apparel, and other industries in the Pearl River Delta has begun to appear. Liang Richang recalled those days before. Although he felt that he had been worried about the shortage of workers, there was still room for adjustment. However, after the appreciation of the *** in October last year, Liang Maochang’s factory Maofu Footwear finally could not hold back the pressure to raise prices. "Starting with only 10%, the volume of orders has clearly started to fall, and prices have gradually increased by 20%. The volume of exports has fallen by about 10% from the same period last year." So far, due to the low volume of orders and The profit margin is too low and existing companies have stopped production. As the president of the Hong Kong Footwear Association and vice president of the Dongguan Foreign Trade Association, Liang Richang has a lot of contacts with his peers, so he has a wider understanding of the entire industry. According to the reports of association members, most of the footwear industry's export volume is not only reduced by 5%. Some factories with lower production levels have reached 20%, and even have factories with half-stopping status. The employees of the production line of the Dezhou Footwear Company in Changan Town, Dongguan, said that in the past, they had to work overtime until 11 o'clock in the evening, but now they can do less goods, and one week or two of overtime work a week.
"In March last year, cotton was only 15,000 yuan / ton, and later it reached 40,000. Now we have 20,000 more, and we have a shortage of labor. We have a 20% labor shortage in the past two years. * Which company did not mention 20% to 30% of the wages?†said Zhao Juncai, head of TEDA Apparel Factory. According to changes in the recent exchange rate, if the sales of garments did not increase by 40%, the basics would not be achieved. To the original profit.
According to statistics, in the first quarter of this year, the export prices of textiles and apparel in China increased by 19.46% year-on-year, of which textile prices increased 24.31% year-on-year, and apparel prices increased 15.99% year-on-year.
"The increase in export volume over the same period last year is mostly due to the increase in product prices. On the contrary, the export situation is not very optimistic," said Gao Fang, secretary general of the China Cotton Association. Excluding price factors, the number of textile and apparel exports in China was basically flat compared with the same period of last year.
Pan Rihui, secretary-general of the Dongguan Textile and Apparel Industry Association, pointed out that cotton generally accounts for about 40% of clothing costs. If the price of cotton rises by 5%, corporate profits will fall by 2%. In the past year, TEDA's apparel sold to the United States has only raised the price of 20%. After automating the equipment at the factory at the beginning of the year, the reliance on employment has been reduced, the production efficiency has also increased, and the problem of high costs has been alleviated. However, Zhao Juncai said that the final profit margin is only half of the past, but the order volume has decreased by more than 15%.
“The cost of labor and raw materials has caused the total cost to increase by about 15%, the cost of logistics, and the impact of the appreciation of ***, etc. It is also 10%, and the latter’s main body is still rising. The total cost has increased by 25% since one year. The price of the product has increased by 20%, and it can only offset about 70%.†Liang Richang said that the increase in labor costs with the *** is the biggest factor. “All are short of people. You must win the workers at a higher price.â€
Despite the decrease in cotton prices, the prices of recently purchased cotton yarn and cotton cloth have not significantly declined, while the prices of petroleum-related raw materials such as chemical fiber and polyester have even increased slightly. “We do not feel the benefits of cotton price cuts for the time being, and it is impossible to bring up the price.†said the person in charge of Ningbo Shanshan clothing.
“The clothing is not complicated in the upstream, chemical fiber and cotton are the fabrics. It is designed, and the shoes are relatively simple. So the price comes up. Customers say they want to go to Southeast Asia. There is no way. Because the labor force comes up, the exchange rate comes up, the raw material logistics. Costs have come up, prices can not go back.†Lu Xin Miao, general manager of Guangzhou Xintang Meihuang Textile and Garment Factory, said that the technology content of clothing is not high, so the bargaining power is also low.
"Good clothes, you raise 30%, and you say, you know, they always accept. After all, we designed more advanced than they saw places like Bangladesh, but the amount of orders will be reduced. To rely on the quantity, we choose to do business This will certainly not be 17% -18% less than we were last year, but this list price you raise up to 20% will be worse than making a big order. So many companies are forced to take a higher level. The goods come in, but high-end orders are not readily available."
“If you do not increase prices, losses will increase. If the price increases, the buyer will turn and go away. This is very helpless.†Lu Xiaomiao said that in the past, his factory was able to sell 7 million pieces a year. Profit of 5, a net profit of 25 million; now if you do not increase prices by 10%, almost loss. When it comes to 30%, one will earn 3 yuan, and the net profit will be a few million. The smaller the price, the more it will be sold.
Orders flow to Southeast Asia and behind this frustration, these lost orders have begun to shift to Vietnam, Bangladesh, Indonesia and other Southeast Asian countries.
“Export orders have decreased by 10%-20%. Some of our customers in Hong Kong SAR, Taiwan, and South Korea began to transfer some orders. Due to the gradual loss of cost advantages in the Mainland, these customers began to choose lower cost places, and part of the middle and low order transfer. To Southeast Asia, high-end clothing can be purchased from Europe and the United States instead. With increasing appreciation, our export business has become increasingly difficult to do, said Wang Yisheng, head of Lotte Clothing Co., Ltd.
According to statistics, in the first two months of 2011, the number of US apparel imports from China increased by 8.47% year-on-year, while the US imports from Vietnam, Bangladesh, and Indonesia grew by 19.25%, 31.26%, and 17.43%.
India’s “Business Standards†reported that in the Indian textile and apparel manufacturing industry, orders from the United States and Europe have increased by about 10%-15%. According to the person in charge of the Indian Textile Industry Association, “Although India's export volume currently accounts for only 4% of the global apparel export market, due to rising labor costs in China, some orders originally planned to reach Chinese companies have now shifted to India.†“We have After organizing Hong Kong business representatives to study in Southeast Asia, if the factory is opened there, the overall cost will be 60% lower than that in the Pearl River Delta and Yangtze River Delta.†Zhu Guoji, chairman of Dongguan Foreign Investment Association, said that the labor cost in Vietnam is now only in Central China. In 50% of the region, India’s labor costs are only 90% of those in central China. The low cost naturally gives the product a price advantage.
A survey of 385 international buyers published by the international trade platform Global Sources last month showed that most of the interviewed buyers stated that they need to pay higher prices to purchase Chinese products, and 31% of the buyers said that Will increase procurement from Vietnam. The survey also showed that Chinese exporters have felt that orders are shifting. One of the reasons is that Vietnam's prices are 30% cheaper than China's.
In Myanmar, skilled workers are still scarce despite the fact that various manufacturers are raising minimum wages. In countries such as Indonesia and the Philippines, the government has increased its investment in labor training, but the shortage of skilled workers has become more and more serious.
“I used to open a factory in Indonesia, but because I feel that there are too many cultural differences on the other side, workers are generally lazy and their work styles are not perfect. For example, if you are looking for a PU leather, you may not buy what you want. , so finally withdrew back.†Liang Richang believes that for several years, Chinese manufacturers believe that we have the advantages of supporting and technology, and that Southeast Asian countries cannot support a manufacturing industry that is much larger than the original and therefore has little impact on us. However, in fact, Southeast Asian countries have been perfecting various types of industrial facilities in these years.
The Hong Kong trading company Li & Fung Co., Ltd. had to resolve its problems by transferring business to Indonesia, Vietnam and other places due to the pressure of higher costs. Its president, Le Yumin, said at a press conference earlier that many companies in Southeast Asia are also working hard to achieve the goal of cooperation among enterprises. For example, more than a dozen Southeast Asian apparel suppliers have recently reached an agreement to establish cooperation between garment processing companies in Cambodia and raw material suppliers in Thailand or other neighboring countries to further integrate their clothing supply chain. This is similar to the “one-stop†garment service provided by Chinese clothing suppliers, that is, the purchase of yarns, fabrics, buttons, and sewing in the same area.
In an interview with local media, the Cambodian Garment Manufacturers’ Association’s Wen Shuyang stated that the long-term goal in Southeast Asia is to achieve the “one country, many provinces†operating model, rather than dividing and conquering ten countries in one region. He said that although countries are very different, they must compete for more business from China.
The PCCS Group, a Malaysian listed company, has operations in China and Cambodia. YikThongChoon, general manager of the company, said that they have two factories in China. In the past six months, workers' wages in the factory have soared by about 50%. Due to the scarcity of labor, the production capacity of the two factories is now less than half. In stark contrast to this, the company’s number of factories in Cambodia exceeded its actual needs.
“Like the low value-added labor-intensive industries such as footwear and luggage, it has been relying on price advantage competition for many years. Now that the advantages of cheap labor are gone, other kinds of costs are rising. Orders and even industries have shifted to more price advantages. Southeast Asia is imperative."
Lin Jiang, director of the Department of Finance and Taxation at the Lingnan College of Sun Yat-sen University who specializes in manufacturing research in the Pearl River Delta Region, said that according to his investigation in the past two years, there are indeed many European and American buyers who have moved to Southeast Asia to place orders. This will Low-value-added industries that must use low-cost competition must be transferred in the past. "Brands and better-quality companies will be reshuffled, but most of the labor-intensive enterprises in the Pearl River Delta have generally low added value."
Mid-western transfer: "Last year we opened a woolen mill there. We have 1,500 yuan a month. We don't need to work overtime at night, and we don't have to spend as much on living at home. It's equal to more than 2000 yuan in Dongguan here." Zhang Jianfeng is in Dongguan Xiegang. After working for 5 years, at the age of 20 he was tired of working outside. Today, his hometown in Ganzhou, Jiangxi Province, also has many factories. He thinks again and again that he intends to pack his luggage and return to his hometown in Zhangzhou.
At the gates of many factories in the Pearl River Delta, there are not only a few “Zhang Jianfeng†who are dragging their suitcases. In addition to continuing to lack people, all townships in Dongguan have lost their original workers, either to the Yangtze River Delta or to their hometowns.
According to research data from the Dongguan Zhitong Talent Market, the demand for labor in Wuhan this year reached 300,000. Similar to Midea, Gree, Foxconn, and other companies all set up factories in Wuhan. In the past, Hubei Province was a major exporter of labor services in Guangdong. According to the open data of the Hubei Provincial Labor and Employment Administration, the “backflow†phenomenon of Hubei's migrant workers this year is very obvious. The output of migrant workers will further shrink, and it is expected to reduce labor exports by at least 1 million. The number of migrant workers sent to the Pearl River Delta region has been reduced by at least 600,000.
The enterprises currently visited have a labor gap of 20%-30% after the equipment automation is updated. With the high comprehensive cost of land use and procurement, many companies have already begun to transfer some links to the central and western regions.
Hong Qihui, general manager of Dongguan Runtian Garment Company, is planning to open a factory in the Mainland. He calculated an account. If the factory was opened in Hunan or Jiangxi, the finished product export would still take Shenzhen Yantian Port, and the rough estimate of transportation costs would increase dramatically from 5% of the original cost to 12%. The cost of procurement of raw materials obtained from inward migration of the factory is basically offset by the cost of logistics transportation. However, it can enjoy a relatively abundant and cheap labor force, which can increase the profit margin for enterprises by more than 10%.
Many interviewed factories also stated that most of the new factories in the inland areas are to undertake some processes that need to be completed manually. For example, Dalang Town, Dongguan City, Dream Wright Clothing Co., Ltd., will be a large number of weaving process distributed to the Guangxi Cenxi area, after the completion of the shipment back to Dongguan manufacturing. In Dalang Town, which is famous for its textile industry, almost 80% of the factories are shifting some of their labor-intensive processes to the central and western regions, and in the latter half of this year, the speed of transfer is accelerated. Hong Qihui also stated that he resets his factory in the Mainland and is only a branch that focuses on more labor-intensive processes.
In addition, at the end of last year, when the price of cotton rose to 32,000 yuan per ton, many textile companies had seen investment in Xinjiang, the main producing area of ​​cotton. According to statistics from the China Textile Industry Association in the first quarter of this year, the investment volume of textile enterprises in the central and western regions increased by 62% and 63% year-on-year from January to March this year, and the proportion of investment increased by about 4 percentage points in the central region. The change in the number of newly started projects is mainly reflected in the central region, and the number of newly started projects in the central region in the first three months increased by 8% year-on-year.
“The Midwest is close to the cotton producing area. Enterprises can open factories in the local area to effectively control local cotton resources and control costs. On the other hand, labor costs in the central and western regions are also relatively low. Therefore, the transfer of textile enterprises to the Midwest will be faster and faster. "Dong Shuangwei, the manager of the R&D center of the first time, said.
Since March rose to 33,000 yuan per ton, the cotton price has dropped to 24,000 yuan per ton today. In the cotton roller coaster period, the textile and garment export data seems to be more beautiful. Customs statistics show that from January to May this year, China exported about 20.328 billion US dollars of textiles and clothing, a year-on-year increase of 23.77%, an increase of 2.33%. The export of textile yarns, fabrics and products was 8.619 billion U.S. dollars, an increase of 23.68% year-on-year, a decrease of 1.69% month-on-month; exports of clothing and clothing accessories were 11.719 billion U.S. dollars, an increase of 23.85% year-on-year, and an increase of 5.51% month-on-month.
However, no enterprise is pleased. “Actually, in terms of the number of orders, we did not see any growth compared to last year, even a 10% decline. There were also orders that we could not meet, but our export volume increased by more than 20% year-on-year. This is a big part because we have increased the price of factory clothes by more than 20%,†said a person in charge of a woolen factory in Dalang Town, Dongguan City.
Not only textile and garment companies, but also labor-intensive, easily copied bags, footwear and hat industries also encountered the same situation. The reporter visited the survey and found that the price increase was more serious, mostly for labor-intensive, low value-added industries such as footwear, textiles, clothing, and luggage. The price increase of such products led to a rebound in the European and American markets, and the situation of order loss has continued for more than half a year.
Shoes and hats have fallen into a mud quagmire. Since last October, the situation of falling prices in footwear, apparel, and other industries in the Pearl River Delta has begun to appear. Liang Richang recalled those days before. Although he felt that he had been worried about the shortage of workers, there was still room for adjustment. However, after the appreciation of the *** in October last year, Liang Maochang’s factory Maofu Footwear finally could not hold back the pressure to raise prices. "Starting with only 10%, the volume of orders has clearly started to fall, and prices have gradually increased by 20%. The volume of exports has fallen by about 10% from the same period last year." So far, due to the low volume of orders and The profit margin is too low and existing companies have stopped production. As the president of the Hong Kong Footwear Association and vice president of the Dongguan Foreign Trade Association, Liang Richang has a lot of contacts with his peers, so he has a wider understanding of the entire industry. According to the reports of association members, most of the footwear industry's export volume is not only reduced by 5%. Some factories with lower production levels have reached 20%, and even have factories with half-stopping status. The employees of the production line of the Dezhou Footwear Company in Changan Town, Dongguan, said that in the past, they had to work overtime until 11 o'clock in the evening, but now they can do less goods, and one week or two of overtime work a week.
"In March last year, cotton was only 15,000 yuan / ton, and later it reached 40,000. Now we have 20,000 more, and we have a shortage of labor. We have a 20% labor shortage in the past two years. * Which company did not mention 20% to 30% of the wages?†said Zhao Juncai, head of TEDA Apparel Factory. According to changes in the recent exchange rate, if the sales of garments did not increase by 40%, the basics would not be achieved. To the original profit.
According to statistics, in the first quarter of this year, the export prices of textiles and apparel in China increased by 19.46% year-on-year, of which textile prices increased 24.31% year-on-year, and apparel prices increased 15.99% year-on-year.
"The increase in export volume over the same period last year is mostly due to the increase in product prices. On the contrary, the export situation is not very optimistic," said Gao Fang, secretary general of the China Cotton Association. Excluding price factors, the number of textile and apparel exports in China was basically flat compared with the same period of last year.
Pan Rihui, secretary-general of the Dongguan Textile and Apparel Industry Association, pointed out that cotton generally accounts for about 40% of clothing costs. If the price of cotton rises by 5%, corporate profits will fall by 2%. In the past year, TEDA's apparel sold to the United States has only raised the price of 20%. After automating the equipment at the factory at the beginning of the year, the reliance on employment has been reduced, the production efficiency has also increased, and the problem of high costs has been alleviated. However, Zhao Juncai said that the final profit margin is only half of the past, but the order volume has decreased by more than 15%.
“The cost of labor and raw materials has caused the total cost to increase by about 15%, the cost of logistics, and the impact of the appreciation of ***, etc. It is also 10%, and the latter’s main body is still rising. The total cost has increased by 25% since one year. The price of the product has increased by 20%, and it can only offset about 70%.†Liang Richang said that the increase in labor costs with the *** is the biggest factor. “All are short of people. You must win the workers at a higher price.â€
Despite the decrease in cotton prices, the prices of recently purchased cotton yarn and cotton cloth have not significantly declined, while the prices of petroleum-related raw materials such as chemical fiber and polyester have even increased slightly. “We do not feel the benefits of cotton price cuts for the time being, and it is impossible to bring up the price.†said the person in charge of Ningbo Shanshan clothing.
“The clothing is not complicated in the upstream, chemical fiber and cotton are the fabrics. It is designed, and the shoes are relatively simple. So the price comes up. Customers say they want to go to Southeast Asia. There is no way. Because the labor force comes up, the exchange rate comes up, the raw material logistics. Costs have come up, prices can not go back.†Lu Xin Miao, general manager of Guangzhou Xintang Meihuang Textile and Garment Factory, said that the technology content of clothing is not high, so the bargaining power is also low.
"Good clothes, you raise 30%, and you say, you know, they always accept. After all, we designed more advanced than they saw places like Bangladesh, but the amount of orders will be reduced. To rely on the quantity, we choose to do business This will certainly not be 17% -18% less than we were last year, but this list price you raise up to 20% will be worse than making a big order. So many companies are forced to take a higher level. The goods come in, but high-end orders are not readily available."
“If you do not increase prices, losses will increase. If the price increases, the buyer will turn and go away. This is very helpless.†Lu Xiaomiao said that in the past, his factory was able to sell 7 million pieces a year. Profit of 5, a net profit of 25 million; now if you do not increase prices by 10%, almost loss. When it comes to 30%, one will earn 3 yuan, and the net profit will be a few million. The smaller the price, the more it will be sold.
Orders flow to Southeast Asia and behind this frustration, these lost orders have begun to shift to Vietnam, Bangladesh, Indonesia and other Southeast Asian countries.
“Export orders have decreased by 10%-20%. Some of our customers in Hong Kong SAR, Taiwan, and South Korea began to transfer some orders. Due to the gradual loss of cost advantages in the Mainland, these customers began to choose lower cost places, and part of the middle and low order transfer. To Southeast Asia, high-end clothing can be purchased from Europe and the United States instead. With increasing appreciation, our export business has become increasingly difficult to do, said Wang Yisheng, head of Lotte Clothing Co., Ltd.
According to statistics, in the first two months of 2011, the number of US apparel imports from China increased by 8.47% year-on-year, while the US imports from Vietnam, Bangladesh, and Indonesia grew by 19.25%, 31.26%, and 17.43%.
India’s “Business Standards†reported that in the Indian textile and apparel manufacturing industry, orders from the United States and Europe have increased by about 10%-15%. According to the person in charge of the Indian Textile Industry Association, “Although India's export volume currently accounts for only 4% of the global apparel export market, due to rising labor costs in China, some orders originally planned to reach Chinese companies have now shifted to India.†“We have After organizing Hong Kong business representatives to study in Southeast Asia, if the factory is opened there, the overall cost will be 60% lower than that in the Pearl River Delta and Yangtze River Delta.†Zhu Guoji, chairman of Dongguan Foreign Investment Association, said that the labor cost in Vietnam is now only in Central China. In 50% of the region, India’s labor costs are only 90% of those in central China. The low cost naturally gives the product a price advantage.
A survey of 385 international buyers published by the international trade platform Global Sources last month showed that most of the interviewed buyers stated that they need to pay higher prices to purchase Chinese products, and 31% of the buyers said that Will increase procurement from Vietnam. The survey also showed that Chinese exporters have felt that orders are shifting. One of the reasons is that Vietnam's prices are 30% cheaper than China's.
In Myanmar, skilled workers are still scarce despite the fact that various manufacturers are raising minimum wages. In countries such as Indonesia and the Philippines, the government has increased its investment in labor training, but the shortage of skilled workers has become more and more serious.
“I used to open a factory in Indonesia, but because I feel that there are too many cultural differences on the other side, workers are generally lazy and their work styles are not perfect. For example, if you are looking for a PU leather, you may not buy what you want. , so finally withdrew back.†Liang Richang believes that for several years, Chinese manufacturers believe that we have the advantages of supporting and technology, and that Southeast Asian countries cannot support a manufacturing industry that is much larger than the original and therefore has little impact on us. However, in fact, Southeast Asian countries have been perfecting various types of industrial facilities in these years.
The Hong Kong trading company Li & Fung Co., Ltd. had to resolve its problems by transferring business to Indonesia, Vietnam and other places due to the pressure of higher costs. Its president, Le Yumin, said at a press conference earlier that many companies in Southeast Asia are also working hard to achieve the goal of cooperation among enterprises. For example, more than a dozen Southeast Asian apparel suppliers have recently reached an agreement to establish cooperation between garment processing companies in Cambodia and raw material suppliers in Thailand or other neighboring countries to further integrate their clothing supply chain. This is similar to the “one-stop†garment service provided by Chinese clothing suppliers, that is, the purchase of yarns, fabrics, buttons, and sewing in the same area.
In an interview with local media, the Cambodian Garment Manufacturers’ Association’s Wen Shuyang stated that the long-term goal in Southeast Asia is to achieve the “one country, many provinces†operating model, rather than dividing and conquering ten countries in one region. He said that although countries are very different, they must compete for more business from China.
The PCCS Group, a Malaysian listed company, has operations in China and Cambodia. YikThongChoon, general manager of the company, said that they have two factories in China. In the past six months, workers' wages in the factory have soared by about 50%. Due to the scarcity of labor, the production capacity of the two factories is now less than half. In stark contrast to this, the company’s number of factories in Cambodia exceeded its actual needs.
“Like the low value-added labor-intensive industries such as footwear and luggage, it has been relying on price advantage competition for many years. Now that the advantages of cheap labor are gone, other kinds of costs are rising. Orders and even industries have shifted to more price advantages. Southeast Asia is imperative."
Lin Jiang, director of the Department of Finance and Taxation at the Lingnan College of Sun Yat-sen University who specializes in manufacturing research in the Pearl River Delta Region, said that according to his investigation in the past two years, there are indeed many European and American buyers who have moved to Southeast Asia to place orders. This will Low-value-added industries that must use low-cost competition must be transferred in the past. "Brands and better-quality companies will be reshuffled, but most of the labor-intensive enterprises in the Pearl River Delta have generally low added value."
Mid-western transfer: "Last year we opened a woolen mill there. We have 1,500 yuan a month. We don't need to work overtime at night, and we don't have to spend as much on living at home. It's equal to more than 2000 yuan in Dongguan here." Zhang Jianfeng is in Dongguan Xiegang. After working for 5 years, at the age of 20 he was tired of working outside. Today, his hometown in Ganzhou, Jiangxi Province, also has many factories. He thinks again and again that he intends to pack his luggage and return to his hometown in Zhangzhou.
At the gates of many factories in the Pearl River Delta, there are not only a few “Zhang Jianfeng†who are dragging their suitcases. In addition to continuing to lack people, all townships in Dongguan have lost their original workers, either to the Yangtze River Delta or to their hometowns.
According to research data from the Dongguan Zhitong Talent Market, the demand for labor in Wuhan this year reached 300,000. Similar to Midea, Gree, Foxconn, and other companies all set up factories in Wuhan. In the past, Hubei Province was a major exporter of labor services in Guangdong. According to the open data of the Hubei Provincial Labor and Employment Administration, the “backflow†phenomenon of Hubei's migrant workers this year is very obvious. The output of migrant workers will further shrink, and it is expected to reduce labor exports by at least 1 million. The number of migrant workers sent to the Pearl River Delta region has been reduced by at least 600,000.
The enterprises currently visited have a labor gap of 20%-30% after the equipment automation is updated. With the high comprehensive cost of land use and procurement, many companies have already begun to transfer some links to the central and western regions.
Hong Qihui, general manager of Dongguan Runtian Garment Company, is planning to open a factory in the Mainland. He calculated an account. If the factory was opened in Hunan or Jiangxi, the finished product export would still take Shenzhen Yantian Port, and the rough estimate of transportation costs would increase dramatically from 5% of the original cost to 12%. The cost of procurement of raw materials obtained from inward migration of the factory is basically offset by the cost of logistics transportation. However, it can enjoy a relatively abundant and cheap labor force, which can increase the profit margin for enterprises by more than 10%.
Many interviewed factories also stated that most of the new factories in the inland areas are to undertake some processes that need to be completed manually. For example, Dalang Town, Dongguan City, Dream Wright Clothing Co., Ltd., will be a large number of weaving process distributed to the Guangxi Cenxi area, after the completion of the shipment back to Dongguan manufacturing. In Dalang Town, which is famous for its textile industry, almost 80% of the factories are shifting some of their labor-intensive processes to the central and western regions, and in the latter half of this year, the speed of transfer is accelerated. Hong Qihui also stated that he resets his factory in the Mainland and is only a branch that focuses on more labor-intensive processes.
In addition, at the end of last year, when the price of cotton rose to 32,000 yuan per ton, many textile companies had seen investment in Xinjiang, the main producing area of ​​cotton. According to statistics from the China Textile Industry Association in the first quarter of this year, the investment volume of textile enterprises in the central and western regions increased by 62% and 63% year-on-year from January to March this year, and the proportion of investment increased by about 4 percentage points in the central region. The change in the number of newly started projects is mainly reflected in the central region, and the number of newly started projects in the central region in the first three months increased by 8% year-on-year.
“The Midwest is close to the cotton producing area. Enterprises can open factories in the local area to effectively control local cotton resources and control costs. On the other hand, labor costs in the central and western regions are also relatively low. Therefore, the transfer of textile enterprises to the Midwest will be faster and faster. "Dong Shuangwei, the manager of the R&D center of the first time, said.
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