Textile industry: the dialectics of “transfer” and “upgrade”
Thirty years ago, one day in July 1978, Zhang Zimi, the operator of Hong Kong Trust Handbag Products Company, brought several handbags and some fabrics to Humen Town, Dongguan, Guangdong, and asked the Taiping Garment Factory at the time to process them in the same way.
This move saved the Bankers Trust Handbag Products Company, which was on the verge of bankruptcy, and the Taiping Handbag Factory established later became the first local “three-to-one” enterprise. Subsequently, undertaking industrial transfers began to become a huge driving force for the development of the eastern coastal areas.
Thirty years later, industrial transfer is still continuing, but the situation has changed significantly.
In 2008, more than 800 small and medium-sized enterprises were closed down in Dongguan City. This number has basically remained stable compared with previous years. “Basically no enterprise with poor operating conditions can be transferred out.” said a comrade from the Dongguan Municipal Economic Commission.
In Wenzhou, Zhejiang, about 2,000 companies have been transferred in various ways every year in recent years. Zhou Dewen, president of the Wenzhou Small and Medium Enterprises Promotion Association, said that most of these enterprises are capable of relocating, and none of them cannot continue to operate in Wenzhou.
“Transfers can only happen after enterprises are transformed and upgraded.” Zheng Chenai, president of the Wenzhou Garment Chamber of Commerce, made a judgment recognized by many people. In many places, industrial transfer has become an important means to promote industrial upgrading. “Transfer” and “upgrade” are becoming dialectical and unified.
Transfer will occur only after transformation and upgrading
An important measure taken by Shanghai Textile (Group) Co., Ltd. has completed the company’s strategic deployment in recent years. In 2008, the company’s new production base was located in Dafeng City, Yancheng, Jiangsu Province, where cotton is produced. “Shanghai no longer has a comparative advantage in developing the textile industry, and our production base has gradually moved to the surrounding areas of Shanghai.” Feng Yapei, vice president of Shanghai Textile (Group) Co., Ltd., said that as a trade and R&D center, the Shanghai headquarters has greatly improved its efficiency.
Kangnai Group in Wenzhou, Zhejiang has a similar transfer. Cornell Group is building a production base in Chongzhou, Sichuan, where labor, land and other factors are relatively cheap, and it has a vast market in the western region. “The main positioning of Wenzhou headquarters in the future is to develop, design and produce high-end products.” said Zhou Jinmiao, executive deputy general manager of Kangnai Group.
The eastern region, which is the first to develop, has a shortage of land resources and rising labor costs. After enterprises develop to a certain level, there is an inherent requirement to transfer low-end manufacturing links. Jiang Zengyao, director of the Wenzhou Municipal Economic and Trade Commission, vividly compared companies like Kangnai to “kites.”
“However, we are not worried that the kite we have flown out will not be recovered, because while transferring the production and manufacturing links, we must retain the brand and retain R&D.” Jiang Zengyao said.
Zhou Dewen, president of the Wenzhou Small and Medium Enterprises Promotion Association, said that the approximately 2,000 companies transferred every year in Wenzhou are all companies that have the ability to transfer. This capability does not simply refer to the economic scale of the enterprise, but has already been upgraded or is actively being upgraded.
“The prerequisite for transfer is to achieve transformation and upgrading.” Zheng Chenai, president of the Wenzhou Garment Chamber of Commerce, believes that most of Wenzhou’s more than 2,000 garment companies still rely on Wenzhou’s information advantages and industrial supporting advantages for survival, and it is not yet time to transfer. . Only when the enterprise itself has upgraded itself and developed service industries such as branding, research and development, fashion trend release, and creativity for clothing manufacturing can the manufacturing link be transferred out. “And this kind of transfer is like a “flying kite”, but its roots still stay in Wenzhou.
At present, many enterprises in the eastern region are still difficult to complete the transfer of low-end links in the industrial chain, and are more focused on expansion of scale. Take Wenzhou’s clothing industry as an example. Although from a technical perspective, Wenzhou’s fine clothing production capabilities are already very strong, especially suits. Many international brands are produced in Wenzhou. “But Wenzhou enterprises themselves are still at the low end of the industrial chain. Processing and exporting of supplied materials is still the mainstream. The proportion of exports of independently designed products by enterprises is not high, let alone the export of branded products.” Zheng Chenai believes that R&D capabilities cannot keep up, and manufacturing The link cannot be transferred.
Transfer occurs only after transformation and upgrading, and the development trajectory of the textile industry in Shaoxing, Zhejiang Province also proves this. After 30 years of development, from spinning, weaving to printing and dyeing, from production to design, Shaoxing’s textile industry chain is very complete. According to Shang Chengfei, deputy director of Shaoxing Municipal Economic and Trade Commission, “Shaoxing Textile pays more attention to brand building, is closer to the market terminal, determines upstream production according to demand, pays more attention to R&D and design, and the awareness of intellectual property rights continues to increase.”
A remarkable fact is that in Shaoxing’s textile industry, the total number of weaving links is constantly decreasing, and the proportion is on a downward trend. Many companies choose to transfer the weaving process to Wujiang, Jiangsu and other places. Such changes have also given people a new understanding of traditional industries such as textiles. Traditional industries are not necessarily sunset industries. The textile industry needs to be transferred, but not all of it needs to be transferred out.
The exploration of Zhejiang Yuehong Holding Group is very representative. They established Yuehong Textile Research Institute two years ago to provide sampling and design services to many textile factories and trading companies in Shaoxing. Jin Xingquan, chairman of Yuehong Holding Group, said that the company has now established cooperative relationships with more than 100 downstream customers and is making money in research and development and high technology, while low-endThe production link began to be “transferred out”, and a spinning production base was established in Hancheng, Shaanxi.
Yuehong’s exploration coincides with Shaoxing City’s development ideas. In 2008, Shaoxing issued the “Guiding Opinions on Accelerating the Development of Producer Services Industry”, “An important purpose is to promote the upgrading of the textile industry. In the long run, low-end manufacturing links that consume large amounts of resources and are labor-intensive will definitely have to be transferred out. “Shangcheng Fei said.
Transfer is an important means of upgrading
Whether for enterprises or for the local economy, upgrading and transfer are unified. For enterprises, relocation is the result of the subdivision of production links, and low-end manufacturing links must be transferred out if they are upgraded; for local areas, relocation is an important means to adjust the economic structure.
“Empty cages and change birds” has become a common choice for many cities by transferring out industries or some links with low added value to make room for the development of emerging industries with high added value. Taking Shanghai as an example, modern service industry and advanced manufacturing industry are the key points of industrial development established by Shanghai. Transformation and upgrading to make room for the development of modern service industry have begun to become an inevitable choice for the development of this city.
In fact, Shanghai’s industrial transfer has begun in the 1990s, transforming from a city with developed light industry represented by the textile industry to a city with heavy chemical industry, developing steel, petrochemicals, electromechanical, automobile, Six pillar industries including shipbuilding and computers. “The new round of development is positioned to develop advanced manufacturing and producer services. It is necessary to keep the corporate headquarters and R&D centers of these existing industries in Shanghai and transfer the production links out of Shanghai.” said Yuan Zhigang, Dean of the School of Economics at Fudan University. .
At the end of 2005, the Shanghai Industrial Cooperation Promotion Center was established. Shanghai’s goal is to eliminate 4,000 to 5,000 companies during the “Eleventh Five-Year Plan” period, which means 800 to 1,000 companies each year, including companies that have been closed down and transferred. Chen Changqi, deputy director of the center, said, “The main function of the Industrial Cooperation Promotion Center is to assist in the elimination of backward production capacity and provide an information bridge for enterprises to transfer abroad.”
In Wenzhou, Zhejiang, a document titled “Opinions on Promoting Private Enterprises to “Go Global”” was released. The “Opinions” emphasize giving full play to Wenzhou’s industrial advantages, focusing on combining the implementation of the “going out” strategy with the transformation of the economic development model and the strategic adjustment of the economic structure.
In order to guide the rational and orderly transfer of industries, Wenzhou City has formulated transformation and upgrading actions for 10 industries, including automobile and motorcycle parts, pumps and valves, electrical, ships, wind power equipment, clothing, footwear, synthetic leather, basic industries and emerging industries. Plan, sorted out a number of key projects for industrial transformation and upgrading, and formed the “Opinions on Implementing the “Industrial Transformation and Upgrading 321 Action” and Accelerating the Transformation of Economic Development Mode”.
Undertaking industrial transfer also brings opportunities to adjust the economic structure and promote the upgrading of the industrial structure. For many regions, purposefully undertaking industrial transfers based on industrial planning has begun to become an important way to adjust the industrial structure.
Starting from July 2008, with the promulgation of “Several Opinions on the Implementation of the “Ten Billion Project””, Zhenjiang, Jiangsu Province made up its mind to strengthen the existing machinery, chemical industry, papermaking, electronic information, materials industry, and transportation equipment. Eight pillar industries including , food, and electricity have been adjusted. Equipment manufacturing, green chemical industry, paper industry, new materials industry, and special metal industry have begun to become the city’s new industrial development goals. Zhu Lirong, a member of the Party Committee of Zhenjiang Municipal Economic Commission, said that Zhenjiang will conduct point-to-point investment promotion around the five major industries and will not accept any enterprises that do not meet industry requirements.
The purpose of Zhenjiang’s approach is very clear, which is to improve the industrial structure based on its own advantages and resources, and undertaking the transfer of related industries will be the key to upgrading the industrial structure. What is certain is that seizing the opportunity of industrial transfer will be an important means to upgrade the industrial structure, both for the transfer place and the receiving place.
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