The Emergence Of Pay Increases &Nbsp; Textile And Garment Industry Pformation Is Coming Soon.

To a considerable extent, it depends on cheap.

In recent years, Foxconn and Guangzhou Honda led the "pay raise tide" began to spread.

This year, Shanghai, Shenzhen, Beijing and other places have announced the increase of minimum wage standards, which will also increase labor costs everywhere.

Recently, Su Hainan, director of the Institute of labor and wages of the Ministry of human resources and social security, said in an interview with the people's Daily overseas edition that China basically had the conditions to achieve the "national income multiplier plan" with the annual average wage growth of more than 15% and 5 years or so. Therefore, we should consider or adopt similar measures in the "12th Five-Year plan" or the government's work plan.

Various phenomena show that China is accelerating the pace of reform of the income distribution system and has entered a substantive stage.

Wage increase is inevitable. The rise of labor costs is the general trend. The proportion of future wage costs to the total cost of enterprises will be further improved.

Although businesses will face pain in the short term, the increase in wages is beneficial to the development of China's manufacturing industry in the medium and long term. The rising labor costs will force enterprises to upgrade their industries and improve the competitiveness of the whole industry through the reshuffle of the industry.

Excerpts from the original text:

Based on the data provided by the 2009 annual report of the listed companies, the author makes a statistical analysis of the sensitivity of the manufacturing industry to the rise in the cost of manpower.

The results show that in the various sub sectors of the manufacturing industry, the textile and garment fur industry is the most densely populated industry, with the lowest average wage, the highest proportion of wage cost in total business cost, and the most sensitive to the change of human cost.

When the wage surge comes, the biggest impact must be the industry.

The author has made statistics on the wage level of 968 manufacturing companies, and extracted the indicators of the number of employees, total wages, total operating income and total business cost of the listed companies in 2009.

The statistics show that textile and apparel are the most intensive industries in the 10 manufacturing sub sectors, such as electronics, textile and clothing, machinery and equipment, metal nonmetal, wood furniture, food and beverage, medicine and biology, paper and printing.

The statistical results of industry average wage show that the textile and garment industry is at the lowest level in all manufacturing industries.

In 2009, the annual average wage of the employees in this industry is only 31 thousand yuan, far below the annual average wage of 56 thousand and 500 yuan in manufacturing industry.

The annual average wage of the manufacturing industry is higher than that of the two industries, such as mechanical equipment and metal and nonmetal, reaching more than 65 thousand yuan.

From the proportion of staff salaries to total operating costs, it is also the highest in textile and garment industries, reaching 10.24%, while other manufacturing sub sectors are below 9%.

If staff salaries go up further, the textile and garment industry will feel more pressure than other industries.

Under the pressure of rising labor costs, China

In this regard, CICC Wang Hanfeng also discussed earlier, he said, rising labor costs will promote industrial pformation and upgrading of industrial structure.

Specifically, the rise in labor costs will bring China three medium and long term industrial trends: the proportion of manufacturing industry has shrunk, the scale of traditional manufacturing industry has increased steadily, but all sectors have entered the stage of reorganization and integration, and the concentration of industries has been upgraded. The proportion of high value-added, technology intensive manufacturing industries and product grades has increased.

(excerpt from the June 11th Securities Times writer Liu Qiaoling)

Comment

Textile and garment industry is a high degree of marketization and privatization.

Since the reform and opening up, the textile and garment industry has been able to turn it into a driving force for the pformation and upgrading of the industry.

Hopefully, the impact and challenges brought about by the rising cost of manpower can also be harvested.

In the short term, labor intensive textile and garment industries will face a painful process.

The competition in these industries is very fierce. There are too many small and medium enterprises, and the industry is disorderly.

After a gradual rise in wages, the competitive edge of small businesses with poor competitiveness is compressed and may eventually be closed.

In the medium to long term, the increase in wages is beneficial to the development of the textile industry. The rising labor cost will push the enterprises to upgrade their industries and enhance the competitiveness of the whole industry through the reshuffle of the industry.

At present, there have been some good signs. Some enterprises have taken a solid step in industrial pformation and upgrading.

Such as Lu Tai, Huafu color spinning and so on, with higher R & D level, bargaining power and positioning high-end, differentiation and other strategies, have stronger ability to resist risks than similar companies.