Some time ago, the news about labour disputes between foreign-funded OEM companies was overwhelming: First, Shenzhen's Foxconn’s “12 consecutive hops†shocked the country, and all sectors of society had questioned the corporate culture of the world’s largest OEM company; The Honda Parts Factory** resulted in the suspension of Honda’s three major vehicle plants and the company’s huge losses...
Subsequently, news of Foxconn and Honda's auto parts companies’ pay rises came to the news. Under heavy pressure, some employees of Shenzhen Foxconn’s salary increase rate was as high as 66%. According to media reports, since 2010, 14 cities in China have raised the minimum wage. “People’s Daily†issued a paper for four consecutive weeks focusing on the reform of income distribution, and all parties in society are calling for raising the wages of migrant workers, in order to resolve the increasingly prominent social problems such as the shortage of migrant workers and labor conflicts. Under this circumstance, the cost of employing labor has risen sharply in all labor-intensive enterprises, especially labor-intensive ones that mainly consist of OEM or OEM business. Some experts predict that the labor-intensive industries will no longer have the scenery and the status of China’s “world factory†or Will shake.
“Continuous labor and capital disputes indicate that the labor force structure in China is changing and labor costs are rising. According to this trend, it is feared that the cost advantage of labor for OEMs or OEMs will disappear. This is for OEMs and OEMs. The hardware business that is the main business is also a huge test.Although these labor disputes do not occur in hardware companies at present, once workers think that extreme measures such as ** can significantly increase their wage levels, they are most likely to follow suit. "Demonstration effect." Experts from the organizing committee of the China International Hardware Show (CIHS'10) said.
The China International Hardware Show (CIHS) is the second largest hardware exhibition in the world and has been held for 10 times so far. As one of the CIHS organizers, China National Hardware Association has long been committed to implementing national industrial policies, actively promoting industry innovation, technological progress, industrial upgrading and product upgrading, and promoting the healthy, sustained and rapid development of the industry. It is a professional trading platform for Chinese hardware. The designers and creators are also the authoritative organizations of the hardware industry development research and various standards organizations. They have more than 4,000 large and medium-sized member manufacturing companies and more than 50,000 domestic and foreign member purchasers. The expert team of the CIHS Organizing Committee not only shoulders the promotion and organization of the exhibition, but also pays close attention to the problems and opportunities in the development of the hardware industry, and provides timely advice for the rapid and healthy development of the hardware industry in China.
"12 consecutive hops" or become a "world factory" funeral
Foxconn Group, which has been plunged into a vortex due to employees' continuous jumps, announced twice in the most recent week that it has significantly increased its salary level, and that wages will increase more than in the past 10 years. At the same time, most provinces across the country have raised the minimum wage this year, which has generally risen by more than 10%, and some provinces have risen by as much as 20%. This series of signs shows that the era of cheap labor that has brought about rapid economic growth in China will never return.
In the field of macroeconomics, there is a well-known "Lewis Turning Point" theory, which is the turning point of excess labor to shortage. After that, we must increase wages to continue to absorb surplus labor. From this point of view, this round of wage growth is not accidental, but it is the inevitable result of China's labor supply and economic development to a certain stage.
As we all know, cheap labor has always been one of the biggest advantages of attracting foreign capital in China. This is especially true for industries such as hardware that rely mainly on export processing or OEM business. China's hardware industry is dominated by small and medium-sized enterprises. It has been engaged in "customs processing, OEM export" business, and it only earns the difference between the domestic and foreign labor market. The profits are meager and difficult to achieve in the long run.
The increase in wages means that the cost of employing hardware will be greatly increased. The foundry, processing, or OEM business that used to rely on cheap labor to obtain export profits will be difficult to sustain. The entire hardware industry will face difficulties.
"The hardware industry, like other labor-intensive industries, relies heavily on export processing and OEM business support, so the rising labor costs will hit the hardware industry. Of course, labor costs are not going up one day, although the 'world factory' will certainly Disruption, but there is still a process, hardware companies currently need to expand their sales channels, through the expansion of sales to temporarily make up for the increase in labor costs, to their own to win the time required for corporate transformation."'10 China International Hardware Show (CIHS'10) Organizing Committee experts said.
"China International Hardware Show (CIHS) is the world's second largest hardware exhibition, has a history of 10 years, and has been committed to providing hardware companies with a platform to expand and stabilize sales channels, helping the majority of hardware companies to achieve technology upgrades and improve product additions. In 2009, the China International Hardware Show (CIHS'09) attracted a total of nearly 3,000 overseas visitors, of whom 40% were from Europe and the United States, while the remaining overseas buyers were mainly from Eastern Europe, South Asia, and the Middle East. In emerging markets such as Africa, according to current statistics, overseas buyers at this year's China International Hardware Show (CIHS'10) will far exceed last year's figures, which will be very conducive to stability of hardware companies and expansion of export channels to cope with labor costs. The rise will help companies win the capital and time for transformation,†said experts from the 10th China International Hardware Show (CIHS'10) Organizing Committee.
The transition from "Made in China" to "Created in China" is an urgent task
In recent days, in addition to Foxconn’s “12 consecutive hops†that have received much attention, there have been a number of worker shutdowns and incidents across the country. This undoubtedly shows that China has entered a period of profound and large-scale adjustment of labor relations. People's long-talked economic structural transformation has obtained the driving force from the bottom. The early arrival of the "nodes" has made economic structural transformation inescapable.
The Chinese government has long proposed to "accelerate industrial restructuring and adjustments," and proposed to enhance the company's ability to innovate and change "Made in China" to "Created in China." However, in the traditional labor-intensive industries such as hardware, this transition is obviously "insufficient in power," and the transition is slow and difficult.
For hardware companies, the biggest difficulty in the transformation is that there are not enough funds and talents to support the development and research of new technologies, new processes, and new designs. Without innovative products with independent intellectual property rights, it is impossible to come up with their own. Brand, it can not get rid of the fate of doing OEM or OEM for others.
“At present, with the increase in the cost of human resources, some orders have already flowed to Vietnam and other Southeast Asian countries with lower labor costs. It can be said that industrial transformation has become a pressing task, and hardware companies can only accelerate their industrial upgrading and make themselves more capable of producing higher-end products. The product can only get rid of the limitation of the cost of human resources,†said an expert from the China International Hardware Show (CIHS'10) Organizing Committee. â€
"At this year's China International Hardware Show (CIHS'10), the organizers will open up a 'new product display area' to provide free exhibiting opportunities for high-quality new products for exhibitors, and the products participating in the exhibition must be self-owned knowledge. Property rights and innovative technology design.In addition to providing free booths, the organizing committee will also compile exquisite brochures for the new products for the exhibition. After the exhibition, it will be promoted through 89 professional media exhibitions and 15 domestic and foreign outstanding industry exhibitions to promote and promote. The technical design innovation and brand promotion in China's hardware industry will strive to expand more high-end product markets and achieve industrial upgrading.â€
About CIHS
China International Hardware Exhibition is jointly sponsored by China National Hardware Association, Cologne International Exhibition Co., Ltd., China Federation of Industry and Commerce, Hardware and Electrical Machinery Chamber of Commerce, and China Light Industry Industry Branch of the International Trade Promotion Committee. The scale of the exhibition is No. 2 in the world, No. 1 in Asia, 10 years of history, 2000 exhibitors, 5000 booths, 110,000 square meters of exhibition area, 4,000 stable top international buyers and hundreds of thousands of member buyer resources. The exhibition has now become the first choice of international hardware buyers professional procurement platform, China's hardware products for domestic sales and foreign trade, "the main channel", and China's hardware new product release and promotion of the authority of the platform. '10 China International Hardware Show will be held from September 28th to 30th, 2010 at the Shanghai New International Expo Center, and will hold the '10 China International Cabinet and Kitchen Bathroom Products and Technology Fair, China International Building Hardware Exhibition 2010 and 2010. China International Lock and Security Products Exhibition.