Cost And Environmental Protection, 20% Of Smes Are About To Withdraw From The Market.

With the high prices, rising costs and the appreciation of the renminbi, the low cost advantages of many Chinese enterprises have been eroded.

The government's implementation of energy conservation and emission reduction is letting some small and medium-sized enterprises gradually withdraw.

And those powerful large enterprises, especially multinational corporations, are complacent and continue to expand their investments.

The Chinese market is about to face a shuffle.

It is estimated that at least 20% of the small and medium-sized enterprises will withdraw from the market after the "high tide" and "energy saving and emission reduction".

The advantages of low cost are eroded and the pressure of environmental protection is increasing. In Fujian, a business owner who has been frugal and wealthy has recently opened a new shoe factory.

Apart from recruiting workers everywhere and training workers to expand their production capacity as soon as possible, the workers' welfare benefits also have to be distracted.

He has to ask questions about improving the food and housing conditions of the new factory and increasing the daily necessities.

All these investments can be saved in the past.

But the improvement of workers' welfare conditions is only a fraction of the cost of the factory.

Workers' wages, loan interest rates, raw materials and land prices have increased substantially in recent years.

The monthly wage of one thousand and two hundred yuan per worker, although it can only be considered as a middle level, has increased by several hundred yuan.

The price of land has more than doubled.

The low cost advantage of the original survival has been greatly eroded.

If we take into account factors such as inflation, RMB appreciation and export tax rebate, the profit margin of enterprises has dropped a lot.

To ensure total profits, the business owner had to continue to expand production capacity.

But not all enterprises are like this shoe factory, they can expand their scale.

The owner of a paper business complained that he had already run four banks in order to get a loan of twenty million yuan.

But because of environmental protection technology, banks refused to provide loans.

If this paper mill can not continue to improve environmental technology, it can not only get loans, but also be forced to close by the government.

In the paper industry alone, last year, more than 2000 factories were shut down by the government for environmental protection.

By contrast, Western companies that are targeting the high-end consumer market and mastering advanced environmental technology are relatively calm.

Their scale and technological superiority began to exert their strength.

The Chinese market is expected to integrate the market with increasing concentration. Although the selling price has increased, the turnover and market share of Kimberly, the largest paper towel manufacturer in the world, has been increasing.

Sales of some products can increase by one or two times in a year.

A company official named Wu Yong explained that he was watching the middle and high income earners.

They are much less sensitive to price than the low-end market.

At the same time, with the help of its huge procurement scale in the world, the cost of acquiring raw materials by Kimberly is lower than that of many Chinese enterprises.

Like other Western companies, it relies on its own environmental protection and energy saving technology, which has gained official recognition from China.

Some local governments have made a green light on their investment projects.

In order to continue to expand its market share, Kimberly also plans to continue to expand its investment in China.

The two sides chime in with each other.

The number of small and medium-sized enterprises has been decreasing, and large enterprises have continuously expanded their capacity. Under this background, the concentration of some industries has been increasing.

Take paper towels as an example. In the past one or two years, 40% of the market share was divided by six largest companies.

It is expected that in addition to paper towels, there will be more companies withdrawing from other competitive industries, and the market will become increasingly concentrated.