Subprime crisis affects 40% of hardware exports to survive

“Only about 25% to 30% of the companies can maintain a good business condition.” On the 20th, at the China Hardware Technology Innovation Conference held in Tianjin, Zhu Renhe, the secretary-general of China’s Wujiao Business Association, lamented.

Participants generally stated that the world-wide financial crisis has touched the real economy in China, including the hardware industry. Currently, about 40% of hardware companies survive very hard, and some of them have already closed down or closed down.

Hardware industry is an important industry in China industry, China's hardware industry in recent years to 20% annual growth rate of development, the annual output value reached 400 billion yuan, and absorb a large number of jobs, there are only tens of thousands of hardware companies in Shenzhen, Attracted hundreds of thousands of employees, but in the face of the crisis, companies generally feel powerless to cope.

Tianjin, the distribution center for the hardware industry in the North, is also facing an overall decline in the industry. Sales revenue and profits of the hardware industry in the region decreased by 3.09% and 12% respectively year-on-year.

“In Shandong, 30% of companies face difficulties in survival. The larger the production companies are, the greater the influence of large companies is.” A member company of the Shandong Hardware Chamber of Commerce stated that the export ratio of major export-oriented enterprises such as Sakura and Dienchi in Shandong’s famous hardware companies. From the past 80%, the current domestic exports accounted for 50% each.

"The drop in export rate has directly led to a reduction in the profits of Hebei Province's hardware companies, and at the same time hindered the financing of Hebei's small hardware companies." A representative of a hardware company in Hebei Province said that many hardware companies in Hebei are under pressure from rising raw materials . They all went bankrupt and most of the rest were running at a loss.

Behind the plight of survival, it reflects the weakness of the Chinese hardware industry. “The hardware industry in China is more about adopting a growth mode that is big and big, and the international environment is slightly troubled. Enterprises will be at a loss,” said Zhu Renhe.

Under the influence of the US subprime mortgage crisis and rising internal costs, the shift in international orders is accelerating. A company that produces and sells cutting tools tells reporters that the technical content and added value of hardware products are relatively low, and it is a typical labor-intensive product. When the international market demand was strong in previous years, export growth was relatively strong. However, since the second half of last year, the economic situation at home and abroad has undergone great changes, and the space for corporate survival has narrowed. Exports have fallen by more than 10% this year.

Faced with the difficult situation, using scientific and technological innovation as a breakthrough has become the consensus of all parties. An enterprise in Hebei Province stated that most of the domestic hardware industry is low-end products or OEM OEM production. High-end products and brand products are still controlled by European and American countries.

Lu Yongjia, general manager of Tianjin New Nanma Road Hardware City, stated that the profit margins at all stages of the hardware industry chain are shrinking, and the room for price reduction is decreasing. Enterprises cannot rely on price competition to establish their core competitiveness, and they should explore new development paths. It is understood that many hardware companies have increased their investment in technology, developed new products with high technology content, made product differentiation as a long-term plan for enterprise development, sought new market demand and established new growth points.