Affected by the global COVID-19 epidemic, China’s economy has stagnated for nearly a month. From January to February 2020, the profit growth rate of industrial enterprises dropped sharply year-on-year, reaching the lowest level since 1999.
Data released by the National Bureau of Statistics on March 27 show: Industrial enterprises above designated size from January to February Profit fell by 38.3% year-on-year, 35 percentage points lower than last year, and 24.3 percentage points lower than the same period last year.
The “Wu Xiaobo Channel Xiao Report” released a set of “death portraits” about the COVID-19 epidemic that are also shocking. Data shows that from January to February this year, 247,000 companies closed down across the country, including more than 30,000 in Guangdong.
Due to the epidemic, domestic and foreign exhibitions have been postponed. “For industries that rely on exhibitions to receive orders, no exhibitions mean no new orders. The cancellation of exhibitions caused an 80% drop in orders. In March last year, orders received were 16 million yuan, and in March this year they were about 2.5 million yuan. “An exporter told the Caijing reporter.
Shoe factory orders plummeted by 80%
The world-renowned shoe manufacturer Nanbao Resin, a major rubber factory, was also affected. “Shoe factories are no longer producing, and of course our glue cannot be sold. Orders have been stopped one after another.” Sun Decong, chairman of Nanbao Resin (China) Co., Ltd., said helplessly.
Ade is the business manager of a large foreign trade shoe factory in Wenzhou.
“More than 80% of the orders at our shoe factory have been cancelled. If the remaining orders continue to be canceled and no new orders come in, we will close down soon.” Only at the end of February Ade, who was urgently recalled by his boss to resume work due to a large backlog of orders, did not expect that he would be in danger of losing his job a month later.
Since mid-March, European and American customers of the factory have successively canceled orders, but they only account for less than 20% of the order volume. After March 20, the number of customers canceling orders suddenly increased sharply. By the 26th, more than 80% of orders had been cancelled. The reasons for cancellation were all related to the epidemic.
“Every day changes. Last week’s orders can last until July, but this week’s orders are just enough. It’s May.” Ade said that although there are some orders coming in, they are all small orders and cannot meet production needs at all.
“There are others even worse than us. Several large local foreign trade shoe factories have informed all employees that starting from April We will start taking unpaid leave until at least the end of May, and then we will decide whether to resume work based on the order situation.” He said frankly.
Under heavy pressure, this shoe factory has begun to lay off employees. “Most of the administrative staff have been laid off. If the layoff falls on me, the factory will be closed.” At this point, Ade only smiled bitterly.
“Either layoffs or salary cuts, otherwise I really can’t survive”
Whether it is reducing staff and salary, or encouraging employees to find their own way out, according to Lu Ze (pseudonym), the person in charge of a shoe foreign trade company in Wenzhou, it is really a helpless move to survive with a broken arm.
The current status of the entire supply chain is: suppliers dare not do business and do not dare to take credit; factories do not dare to do business and cannot buy materials with cash; foreign trade companies are in a dilemma: factories and customers Both sides are Party B.
In Wenzhou, where we are located, there is a relatively common phenomenon in the supply chain that allows credit accounts. Because Wenzhou has always believed that as long as business is done and flowing, money will be made. If it is all cash, it will not be conducive to the liquidity of the entire chain.
As far as I know, a week ago, some shoe factories in Zhejiang, Fujian, and Dongguan began to lay off employees.
Due to the nature of large customers, all the production factors of the factory will revolve around a few large customers. Once production is stopped, workers will still have to support them, so they will lose money every day. In fact, letting workers go is very hurtful. Once the epidemic situation improves, it will be difficult to recruit temporary workers, but even then, we have to let them go, because they can’t support them even if they only pay minimum wages.
Many factories that deal with large customer orders have begun to arrange for workers to leave their jobs and encourage them to make a living on their own. Workshop management benefits and performance are cancelled, and only basic wages to ensure living standards are paid. They are all cutting the flesh with a sharp knife, and it falls off before it hurts.
We will survive this month no matter what, but there will be some layoffs next month, or we may discuss temporary salary increases, otherwise we really won’t be able to survive.
Some foreign trade companies have experienced order cancellations
Liu Changyu, the second-level inspector of the Foreign Trade Department of the Ministry of Commerce, said: The downward pressure on global economic and trade has increased significantly, and some foreign trade companies have experienced order cancellations.
Liu Chang stated at a press conference on March 26 that the current COVID-19 epidemic has spread to more than 190 countries. and regions, uncertainty in the external environment for China’s foreign trade development has increased, and downward pressure on international trade demand has increased. Major trading partners, including Europe, the United States, Japan and South Korea, have been affected to varying degrees in terms of domestic production and consumer demand, which will inevitably put certain pressure on the normal development of China’s bilateral trade.
He said that the spread of the epidemic has a phased impact on foreign trade companies:
One is �It has affected international demand, and China’s major trading partners have entered a state of emergency to “anti-epidemic”. In the short term, domestic and foreign trade companies are facing the impact of sluggish demand in the international market;
Second, it affects international trade Cooperation, China’s imports of intermediate goods and raw materials may be affected, which in turn affects the export of final products;
The third is that it affects international business activities, and the exchanges of economic and trade cooperation personnel tend to stagnate, and various exhibition negotiations Will be postponed or canceled, and companies face problems such as ineffective traditional methods and blocked traditional channels in obtaining new orders.
Although the external environment for China’s foreign trade development is increasingly uncertain and the downward pressure on international trade demand is increasing, we must also see that my country’s foreign trade industry chain has a complete structure and strong competitiveness. , Chinese enterprises have strong innovation capabilities, and foreign trade enterprises have strong adaptability to turn crises into opportunities.
These capabilities have been proven in responding to previous crises, and they will surely be tempered in the test of this epidemic. At present, the interests of all countries are deeply intertwined. On the one hand, the Ministry of Commerce will strengthen its analysis of the development of the epidemic in relevant countries, especially China’s key trading partners, and its impact on bilateral economic and trade situations, increase international cooperation in the fight against the epidemic, deepen pragmatic bilateral economic and trade cooperation, and strive to Reduce external risks in foreign trade development.
On the other hand, and most importantly, we will make full use of various foreign trade policies, especially to promote fiscal, taxation, banking, export credit insurance and other policies to precisely support enterprises. Measures should be implemented as soon as possible to take effect, support local governments, industry organizations, and trade promotion agencies to provide necessary legal and information services to enterprises, guide enterprises to prevent risks, and help enterprises protect the market, orders, and share. </p
