Why "Yanghegong" sells in Changjiang Delta Garment Factory (II)

Low-end labor can not be introduced. It is understood that Vietnam and Burma’s “blacksmith” wages are only half or even less than Chinese workers. Compared with the current labor costs in China, they are more attractive.

“Our company is at the end of the industry chain and profits are already very low, and if the state allows it, I very much welcome Vietnamese workers to work.” Yang said.

Like Yang’s textile mill, many companies also expressed their willingness to recruit “foreigners” through this underground form. “They do not have to pay various kinds of insurance, they are not holding up wages, and they are not like Chinese workers, like the Chinese New Year and Mid-Autumn Festival. Will return home, affecting the production of the factory."

So, many foreigners liked by the SMEs can enter the factories in China to work legally?

The author reviewed the "Regulations on Employment Management of Foreigners in China", which clearly stipulates that a "foreigner employment permit" and a professional visa are required, and that the requirements for the job position are "should have special needs, and there is no suitable candidate in the country, and no Violation of relevant state regulations." According to reports, the above regulations clarified that “If an enterprise needs to introduce foreigners, it can only be middle- and high-end talents, and foreign low-end labor cannot be introduced.”

For the “Irish Workers”, the “Regulations on the Employment of Foreigners in China” clearly requires that the public security agency may terminate the employment of foreigners at the same time as the employer, and may use more than 5,000 yuan for the employer. Fines of less than 50,000 yuan, and ordered them to bear the full cost of repatriation of foreigners hired privately.

“Ilishism” tests the labor market As Vietnam and Burma are geographically connected to China, the people have always had contacts. It is reported that on the 1,020-kilometer-long Guangxi-China-Vietnam land border, Vietnamese people can enter China only a few minutes walk. After evading checks in various ways, they can buy tickets to reach major cities.

The issue of "black workers" has caused the relevant departments to attach great importance to it. In recent years, under the unified deployment of the Ministry of Public Security, the public security department of our province has repeatedly launched special campaigns to rectify the "three non-inconsions" and mobilized people to provide and report "three non-negative" clues. According to the regulations of the Ministry of Public Security, all foreigners who are illegally entering or illegally residing in China, regardless of whether they are registered with the UNHCR or not, have to “discover one, investigate and deal with one and send one”. However, due to the temptation of interests, "Irish Workers" was favored by individual SMEs, and the "Irish Workers" incident also occurred from time to time.

The author calculated a sum of money. For example, the 28 “blacksmiths” hired by a textile mill in Zhuji are estimated to have a monthly salary of 600 yuan less than domestic workers, and only 17,000 yuan in wages can be saved in one month.

Industry insiders believe that in the current situation of “difficulty in recruiting workers” in China, the labor cost will further increase. There may be more companies, especially traditional processing and manufacturing companies with low technological content, who risk illegally and are illegally employed. Illegal Workers". While satisfying the normal production of the enterprise, the enterprise benefit is reduced by reducing labor costs.

It is understood that at the end of 2009, the registered urban unemployment rate in China was 4.3%, and there were actually 9.21 million registered unemployed people in cities and towns. Relevant human resources experts pointed out that under current circumstances, once the large number of “black workers” have flooded into China, it will bring a great test to the low-end labor market in China.

The transformation and upgrading of enterprises is the key 28 "foreigners" sent back to the country, Yang's factory has a few more vacant equipment, he still faces the difficulties of domestic workers can not recruit, "Ocean workers" can not be introduced. In each of the "three non-specific" special operations, companies face similar difficulties.

Small and medium-sized processing companies have no technology or brand, and their products have low profits. They can only keep reducing their costs in order to maintain the current low profit margins. Experts pointed out that with the low-cost labor force outside the country, it is possible to reduce production costs, which is the fundamental reason for the continuous ban on foreign workers.

In the interview, the author learned that, in addition to enhancing corporate brand awareness and improving product competitiveness, there are also some companies that try to “go global” and establish production bases in countries such as Vietnam. Relevant individuals believe that this can not only eliminate and circumvent the adverse effects of international market trade barriers on enterprises, but also enjoy the advantages of foreign preferential policies and human resource costs.

Take Shaoxing as an example. In recent years, the city's Yuemei Group, Daheng Group, and Hailiang Group have respectively established Nigerian Textile Industrial Park, Botswana Textile Industrial Park, and Vietnam Longjiang Industrial Park. Among them, nine Chinese companies are currently living in the Longjiang Industrial Park in Vietnam, including labor-intensive companies such as Zhengyuan Socks and Shuangda Wood.

Interviewing when can SMEs smile?

Low productivity → Large number of workers required → Difficulties in recruiting companies → “Blacksmithing” appears ← Reduces labor costs ← Reduces production costs ← Maintains existing lower profits ← Corporate profits are low.

In the recent investigation of the "Irish Black Workers" incident, the author summarized two direct causes of the emergence of "Irish Black Workers": low production efficiency and low corporate profits. Behind these many arrows, the urgent need for transformation and upgrading of labor-intensive enterprises is reflected.

It is undeniable that in the past 30 years, labor-intensive industries have made many contributions. Relying on China's abundant labor resources, the development of export processing industry, so that "MadeInChina" - "Made in China" swept the world.

In the field of economics, there is a concept of “smile curve” where patents, technologies, brands, and services are located at both ends of the high-profit curve, while assembly and manufacturing are at the bottom of the profit-making low end. Most of China's labor-intensive SMEs are at the bottom of the “smile curve” and face the disadvantageous situation of “low corporate profits, low production efficiency, and low brand technology”. Today, due to factors such as resource constraints and labor costs, some companies at the lower end of the industrial chain are struggling.

At present, the Chinese government requires companies to accelerate the transformation of economic development methods, accelerate the transformation and upgrading in the face of new historical opportunities and challenges, and carry out a series of measures to eliminate backward production capacity.

In the interview, the author felt that many SMEs have a strong desire for transformation and upgrading, but their capabilities are very limited. With low profits, low efficiency and difficulty recruiting, in addition to idle machines, there is also a bright future for transformation and upgrading. Compared to others, this group also knows what it means to increase production efficiency and improve the production process.

On the Internet, "MadeInChina" was translated by some netizens as "cottage." In order to allow small and medium-sized enterprises to transform themselves from "production workshops" to "corporate headquarters," besides improving production technology, brand building must also be on the agenda.

When it is no longer at the low end of the industry chain, but at the technological and brand level, it breaks through and captures both ends of the “smile curve”. Many small and medium-sized enterprises in China may only smile happily.

In the meantime, there is still a long way to go.