Export Commodities Usher In The Era Of High Price &Nbsp; &Nbsp; "Made In China" Is No Longer Cheap.

Last year, Teng Xingbiao of followme Shoes Co. Ltd. of Wenzhou began to talk about the price increase with his clients.

He said, "we have probably increased 10%-15% since the end of last year."

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Workers increase wages, prices of raw materials and RMB appreciation.

The rise in costs makes China win in the long run at low prices.

This is a passive process as well as an initiative.

In the tide of price rise, can Chinese enterprises be able to shift the cost pressure? Obviously, the shuffle of manufacturing is inevitable, and the insisting will make "made in China" no longer cheap.

"Two years later, China's

"What China's manufacturing industry has to do is adjust and stick to it."

Zheng Chenai, chairman of Zhejiang's Olympic apparel Co., Ltd.

Passive, because forced to do so

"The main pressure comes from three aspects."

Teng Xingbiao said, "the prices of raw materials, labor costs and the appreciation of the renminbi, these three factors make our foreign trade enterprises have to raise prices, and businesses can not help but make money."

"In one year, the raw materials have increased by four or five, and the businesses around them are the same. All walks of life are the same."

He said.

In December last year, global resources research conducted a survey. They visited 232 Chinese exporters of telecommunications products, household products, fashion accessories, garments and textiles, hardware products, sports equipment and security products. More than half of the respondents were from Guangdong Province, 19% from Zhejiang Province, and 13% from Fujian province.

The survey showed that the prices of raw materials and accessories continued to rise since last year. 33% of respondents said that the price of raw materials and accessories increased by 6% to 10% last year, while 41% of the surveyed suppliers pointed out that the price of raw materials increased by 11% to 20% or more.

After the price rises, what should we do? In the survey, 24% suppliers plan to implement a new round of price adjustment.

In addition, the rise in labor costs is also a reason why companies have to raise prices.

At the beginning of 2010, "labor shortage" began to win the headlines of China's major media.

In the middle of the year, Foxconn company (Foxconn) raised a lot of wages after a series of workers' suicides. The continuous improvement of workers' wages in mainland China has always been the focus of attention.

Later, some people began to put forward the "Lewis turning point", that is, as the rural surplus labor force in developing countries gradually reduced, the turning point of the country's wages began to rise rapidly.

Last year, Teng Xingbiao's salary for workers increased by about 10%-15%.

He said: "although helpless, but it should be, the wages of Chinese manufacturing workers have not risen for 20 years, which is unfair.

The average increase in factory wages in Wenzhou is around 10%.

Coupled with the appreciation of the renminbi, "therefore, raising prices is something we have to do."

Teng Xingbiao said.

The price increase has just begun.

It is also a proactive behavior because China has been in a low supply cost position in the world in the past 30 years.

With its huge manufacturing machinery based on cheap labor, China actually dug up industrial bases in the United States, Europe and other Asian countries.

Teng Xingbiao said: "in the past 20 years, as prices continued to decline, we had to increase shipments to maintain revenue growth.

Now the cost of all aspects of the rise, so that enterprises can no longer compete with each other.

In fact, these manufacturers are tired of this way of survival.

Raising prices does not mean a great loss of customers.

"We are less affected."

Teng Xingbiao then analyzed the reasons.

He said: "we are generally more well-known brands, that is, more professional orders, first of all to find our factory replacement is not very easy, and now India, Vietnam and other countries can not reach this level; secondly, these big brands have their own market, the world has their brand stores, that is, they need a certain amount of goods to support their existing market, or still need to increase the volume to expand the market."

"Of course, some smaller and unknown brand orders will lose after raising prices, but that is not our priority."

Teng Xingbiao said.

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Price increases are just beginning.

In the process, there will be factories disappear.

"Because some factories do not have the bargaining power, they will lose orders when the price is raised, and the costs in the environment are rising. These enterprises will gradually disappear. On the other hand, as the manufacturing industry becomes more and more difficult to do, some people who earn the first pot of gold here will also withdraw from here."

Teng Xingbiao said, "after the completion of this process, China's exports will enter an era of full speed raise, not only 10%-20%, but a substantial increase."

This is because the total volume of production is decreasing, and the disappearance of some factories will contribute to the balance of supply and demand, rather than the situation of "more factories and less orders", which naturally will make China's commodity prices rise to their due position.

Many manufacturers still insist on having such psychological expectations.

"I think this time should be passed this year and next year, that is, 2013."

Teng Xingbiao predicted.

Experts in the industry say it is impossible for the manufacturing industry to move from China in large scale within 5-10 years.

Huo Jianguo, President of the Ministry of Commerce, is a supporter of this view.

Teng Xingbiao said that after the rise in costs, although the company also has a price increase, but the company's current profit margin is only about 5%.

When a company has at least 10% profit, it can guarantee the renewal and development of technology.

At present, the profit of this part of foreign trade is still very low, but if I want to survive these two years, there will be a good period. "

He said.

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Zheng Chenai, chairman of Zhejiang's Austrian Garments Co., Ltd., has the same idea as Teng Xingbiao.

Zheng Chenai said: "our price has increased by 30%, before the volume is up, the profit comes down; now we mainly protect the profit.

What the enterprise should do now is to seriously adjust and insist.

During this period, China's exports will usher in another "spring".

Hongkong based consumer goods purchasing and logistics company Li Feng has warned that "a new era of purchasing price increases" has arrived. Chinese manufacturing enterprises will shift the cost of raw materials and labor to the customers.

Bank of America Merrill Lynch economist also said that in the next few years, as China's labor costs rise, when China enters "Lewis turning point", the US consumer price index will increase to about 4%.