Dilemma spreads! China's manufacturing industry continues to decline

China’s PMI was 49% in November this year, down 1.4% from the previous month. The latest statistical data from Chinese workers in the production of electronic products shows that China’s manufacturing industry continues to be sluggish, and many companies are on the verge of collapse. The data also shows that the state monopoly industries have basically maintained normal operations, while the majority of small and medium-sized enterprises with private companies as the mainstay have generally fallen into the predicament of survival.

The China Manufacturing Purchasing Managers' Index (PMI) released by the China Federation of Logistics and Purchasing was 49% in November this year, which was a 1.4% decrease from the previous month. It was the first time since March 2009 that the PMI fell below 50%, while the index was below 50%. It shows that the manufacturing industry is shrinking.

After careful analysis of the data by the media, it was found that among the 20 industries included in the statistics, the index of 10 industries including transportation, petroleum processing, and manufacturing was more than 50%; the agricultural and sideline products processing and manufacturing, electronic equipment manufacturing and other 10 The industry is less than 50%. This shows that the state monopoly industry has maintained its normal operation on the basis of its own advantages, and the vast majority of SMEs are generally gloomy.

Increase in manufacturing costs Chinese media reported that more than 90% of coastal SMEs have increased their overall production costs by at least 10% to 30%, mainly due to the increase in raw materials, labor costs, the appreciation of the exchange rate, and financing difficulties. This is particularly evident in the Pearl River Delta and other major coastal manufacturing industries in China.

Shen Lixing, manager of Dongguan Bayland toy factory, said that Dongguan manufacturing industry is facing shortage of funds and rising raw material prices. He said: “The government’s pressure on taxation, reduction of overseas orders, appreciation of the renminbi, etc. are all reasons. And then the raw materials are desperately rising, and prices have risen sharply.”

The same problem is also quite common in inland areas such as Anhui. Bian Ruilan, Purchasing Manager of Anhui Huaibei Shunfa Food Co., told local media that she had purchased raw instant noodles, and she had to make a phone call. Since April this year, prices have risen and supply has been in short supply. She said: "Flour (prices) this year has increased by about 8% to 10% over the same period of previous years, the cost of palm oil has increased by 40%, and the cost of production is under greater pressure. We want to develop new suppliers and increase our procurement competitiveness. Control purchasing costs."

Lou Wenkai, general manager of Anhui Ningguo Xingyuan Rubber Products Co., Ltd. complained that the soaring prices of raw materials made it difficult for enterprises to support. He said: “Raw raw material prices are comparable to natural rubber, which was more than 23,000 yuan (yuan) in 2009. By June of this year, it has risen to more than 35,000 yuan (yuan), or an increase of more than 60%.”

The review of the predicament suggests that this shows that the difficulties faced by SMEs are not limited to the coastal areas, and that they are inland. The northeastern China has already felt the pressure of price increases. Lianwei Shimianchang, director of Shenyang Liaowei Asbestos Tile Factory, told local media that the increase in raw materials forced the factory to stop purchasing, and now I do not know how long the stock can hold. He said: "Oh, the raw materials are all the original ones, and now it's not good enough to enter them all because of the price hike of raw materials. The raw materials are all stored. Mortgage, but also to find a guarantee, more difficult, long cycle."

In addition, the tax burden on SMEs is too heavy, squeezing the company’s profits and inhibiting the company’s ability to expand reproducibility and technology R&D. Many companies stated that they do not see any hope for the economic outlook in the short term.