Quanzhou Boss Runway Survey: Grassroots Manufacturing Difficulties Under Tight Credit

The last day before National Day is the economic and Technological Development Zone in Quanzhou, Fujian. When people were ready to take a vacation and go on a trip, Chen Li was unable to get rid of the materials in a factory which had been seized by the court.

"During the Mid Autumn Festival, I ran to ask the factory owner to collect money. He said he would have it in two days. And then a little more than a week later, his family disappeared. Chen Li spread out his hands to Tencent finance and economics. "I've worked with him for two or three years, but he's still running!"

RTI is another business owner in Quanzhou, whose chairman Li Fasheng is vice president of Jiangxi chamber of Commerce in Fujian Province, and has been engaged in shoe industry for nearly 20 years. When Li Fasheng was found missing, the factory was still operating. There were still many materials, finished shoes and sewing machines in the factory. After that, Li Fasheng's office was in a mess and there was still no water left in the glass.

Quanzhou is one of the three largest cities in Fujian, with the total economic volume ranking first in the province for 15 consecutive years. In Quanzhou, especially in Jinjiang, Shishi and other towns, there are densely owned private enterprises, especially famous for shoes and clothing industry. They have experienced rapid expansion, and dozens of brands of shoes and clothing have appeared at the peak. Only around shoemaking, SMEs have surpassed 6, and "Jinjiang model" has long been a national symbol of the private economy.

Ice is not a cold day. In the 2011, with the gradual change of the industrial environment, the manufacturing industry in Quanzhou began to encounter various problems. Some constraints were common in China, such as labor costs, changes in the international trade environment, and difficulties in industrial upgrading. Some problems, such as financial institutions, credit ecology, and tax policies, pointed to Quanzhou itself.

Today, the manufacturing industry in Quanzhou, from the industrial workers to the chairman of the listed companies, is speaking frankly to Tencent finance. They are experiencing the "most difficult period" in the more than 20 history of Quanzhou manufacturing industry, and have entered the hard winter.

　　 The importance of capital chain

Many people in Quanzhou have noticed that since the beginning of this year, luxury cars parked on the roadside are often labeled "beef jerky": not a ticket for traffic police, but a leaflet for mortgage loans - "as we all know, bosses are short of money."

Li Fasheng opened the Audi car before he went on foot. He also invested in several properties in Quanzhou, which had been mortgaged or sold by Lee earlier.

In the manufacturing industry of Quanzhou, Li Fasheng belonged to the early fortune maker. In 1990s, many factories that invested in labor-intensive and foreign trade processing had dug the first pot of gold. This year, RTI has also taken orders for many foreign trade shoes and garments, but since June, the factory has begun to default on the wages of the workers.

After Li's run, the workers in rite began to pay for the action. After communicating with the local government, the Quanzhou Economic Development Zone settled 80% of their salary compensation. Collective bargaining and labor arbitration also took place in factories such as alligator et al.

A local court official in Quanzhou told Tencent finance that for the boss's running and so on, the problem of arrears of wages is usually solved through the process of sealing up factories and processing assets, but it often increases the difficulty for the aftermath because of a sudden occurrence.

Chen Li said he knew what he knew. He has set up a mini factory, and has been doing foundry for a large shoe factory similar to RTI for 18 years. He told Tencent finance that the debt owed by RT was about 10 million yuan, and he did not expect to get his money back.

"If more and more factories fall, do I have to go on?" this is a common statement by Chen Li and many people in Quanzhou shoes and clothing industry. "We used to care about customers' blacklists. Now we have to guard against upstream and downstream partners. I don't know who suddenly disappeared. "

In Quanzhou, the upper size of shoes and clothing factories generally have more than five hundred or six hundred artificial quantity, and many workers have told Tencent Finance on different occasions that there has been a hearing about the closure of factories. CEO, a listed company of sports shoes and clothing, who does not want to be publicly identified, describes the situation of Quanzhou bosses, such as running away from their bosses, operating difficulties and tight funds, according to Tencent finance.

The company was among the first to be exposed by the boss. At the end of September, Tencent finance and economics visited, but was denied access to the factory by the boss. A director of the logistics department around the plant said that after being suspected of losing contact with the company, Ding Hui, the factory staff, also raised money spontaneously, hoping to help the factory tide over the difficulties.

"Even if it is a medium-sized enterprise, it can reach tens of millions of dollars at any one month and the money in the middle turnover. Which chain is broken, that is, tens of millions of debts." The director said that he had billions of debts. "The supplier will not supply to you, you will not deliver the goods to the customer, the customer will not find you later, and finally form a triangle debt. Everyone is tied up."

It's not just the industry that sniffed the chill. It is reported that in mid September, the Management Committee of the Quanzhou economic development zone held a special meeting for the event of the loss of the business owners, hoping that the owners of the enterprises with financial difficulties should not act privately like Mr.

Tencent finance learned that in late September, the National Bureau of statistics and the Fujian Provincial Federation of industry and Commerce reached Quanzhou, Jinjiang and other places, including 361, PEAK, Anta, XTEP and other local leading enterprises. In the course of investigation, the directors of private enterprises in Quanzhou are referred to several problems by higher authorities, including performance summary, prospect forecast, difficult description, policy suggestion and so on.

In fact, after the OEM manufacturing and large-scale "licensing" campaign in Fujian, Anta shoes and other clothing faucets have been listed before 2010. Nowadays, a large number of enterprises in Quanzhou still continue to carry out foundry and supporting business, and some enterprises are in the sprint stage before listing.

A leading chamber of Commerce in Quanzhou city told Tencent finance that the earliest enterprises to develop overseas orders were the first to bear the brunt of the difficulties.

It is not safe to be listed on the list of billions of enterprises. "Some enterprises must reach a certain scale in order to go public, so they should expand if they know not to make money." Shi Zhengzhi, Secretary General of Quanzhou textile and Garment Association, told Tencent finance. "As in the case of North, there is no accumulation of primitive capital, the cost of financing is very high, and we need to make the brand bigger. When the economy is down, the problem comes out."

　　 Banks "smoke in snow"

Shi Zhengzhi is the Secretary General of the Quanzhou textile and Garment Association. Before and after national day, he is busy participating in the investigation of Quanzhou private enterprises. Shi's standpoint represents the views of many people in the industry. When the market is not good and the capital chain is tight, the life and death of the enterprise will be in the hands of the bank. If the problem of financing can be solved and the winter is over, the boss's running and credit disputes will not become the "hot spot" of Quanzhou.

Lin Zuo (a pseudonym) is a manager of a leather shoes brand and factory in Quanzhou. He told Tencent finance that the factories in Quanzhou had enjoyed a good time after 2008: "every day there are bankers who urge you to borrow money, please eat, and many people borrow money to expand their capacity and even do other projects. Now, the good times are gone. "

Su Wenbin, chairman of Hengtai Hongwei shoes industry, used the "go back to the world" to describe the "reverse" of banks today. "Sometimes the factory turnover may be less than two million. If the turnover is open, it will be able to repay, but it will not lend you anything. In order to deal with the real estate across the board? "

More than one manufacturing industry has focused on the phenomenon of "swindling loan" by local banks since last year: in order to ensure that loans were repaid and loans were repaid by various local banks, various ways were used in disguise instead of lending to enterprises, which included tightening procedures and increasing reception thresholds.

Banks began to change their attitude in 2012. At that time, shoes and clothing enterprises in Quanzhou were generally faced with problems such as overcapacity, excessive stores and difficult inventory, and the banking industry began to impose restrictions on the former. Shi Zhengzhi said that banks' restrictions on loans to these enterprises this year have become Quanzhou's "open secret".

"The government has issued a lot of policies, such as helping small and medium-sized enterprises to get loans difficult, but the reality is that banks are also going to reduce the amount of loans, or even return them to you and kill them." Shi Zhengzhi said. A person who worked in a local bank in Quanzhou explained to Tencent finance that this year there were too many bad loans for shoes and clothing enterprises. "The entry requirements for them are definitely high."

According to the analysis made by PWC in the first half of the ten major banks' financial reports, the ten major listed banks' loans were concentrated in the manufacturing and wholesale and retail sectors, and increased by 13.39% and 19.43% respectively at the end of 6 in 2014 compared with the end of 2013. Major banks have expressed the need to strengthen risk control for manufacturing loans.

Su Wenbin described that after the banks closed the gates, business owners could only find underground banks, and some even caused violent triad treatment. According to public information in Licheng District of Quanzhou, the number of individual businesses and private enterprises increased significantly in the first half of this year, an increase of 22.8% over the same period last year. The local chamber of Commerce reads: "the credit condition of enterprises is poor, and it is difficult to raise funds through formal channels. When capital needs are often turned to fund-raising by the masses. When the business is not well managed, the capital chain is easily broken, triggering a series of lending disputes.

Not only factories, but also local private financing institutions in Quanzhou. Like the RT factory, a small loan company also experienced a dramatic run off event. The car that was leased to the front door of the company made a false impression of capital. Then the boss disappeared overnight.

"However, in addition to usury and private guarantees, I have been desperate for other ways of lending." A local clothing business owner named Huang Dong said.

In southern Fujian, the way of financing between folk and friends like "meeting son" is very common. Lin said that in the past two years, when the economy was down and the banks tightened their credit, the interest rate of "Zi Zi" was getting higher and higher. The interest rate that he had contacted rose from 100 to 300. "1000 yuan a month can make 300, and where is more money than Quanzhou?"

In addition, the factory owners in Quanzhou have generally reflected a phenomenon different from previous years to Tencent Finance: the tax department is especially large in the factory this year, and some enterprises have also asked to move out the accounts of the first five years to make up for tax payment. For the first half of the year, some measures to support the development of small and medium-sized enterprises have been lighten up, and some enterprises have also failed to implement them.

Jiang Lin, director of the Department of Finance and taxation of the south of the Five Ridges College of Zhongshan University, made an analysis of this phenomenon to Tencent Finance: Although there are already policies for reducing the burden of small and medium enterprises, for example, the levy threshold for small and micro enterprises to levy business tax is 30 thousand.

Jiang Lin pointed out that Quanzhou's local governments need a careful trade-off between industrial upgrading and economic stability. "Small and medium-sized enterprises, factories like" three to one supplement "and so on, are not of great help to the industrial transformation theoretically, but they are of great significance for stabilizing the economy and employment. Are you a priority for steady growth or a priority for structural adjustment? If steady growth is the priority, then you have to introduce a lot of policies, such as tax cuts for small and medium enterprises.

Shi Zhengzhi said that small and medium-sized enterprises in Quanzhou are much more vulnerable to the pressure of taxes than the listed companies. "SMEs have no resources and no connections. They are easily squeezed out, but manufacturing industry in Quanzhou is an industrial cluster supported by many small and medium-sized enterprises."

　　 What was eliminated?