Steel Global Net

Now we should encourage enterprises to actively internal absorption rather than outward shift cost, can take eight responses

Taizhou - before this, the third of China's private economy development forum held in Taizhou, Zhejiang, vice chairman of the Ninth National Association of Industry and Commerce, economists Professor Gu Shengzu invited to attend and focus on the current era of cost inflation delivered a speech . He pointed out that China has entered the era of mild inflation, cost-push factors need to attach great importance. Cope with the cost of inflation era, on the one hand enterprises should adopt enterprise information, industry clusters, intensive development of strategic nuclear naturalization, and management modernization, rationalization of distribution and management of international countermeasures, such as active in the digestive internal costs rather than outward shift cost increases inflationary pressures; On the other hand the Government should reduce the tax burden so that enterprises can "without reservation."

Professor Gu Shengzu first reviewed after the founding of the Fourth inflation, and pointed out that in 1994 the price of food rose 35 percent, is the highest price rises over 40 years of the year, its prominent feature is stimulating demand for the evolution of cost-push. Since April this year, China's overall consumer price level monthly rising, and the October consumer price index reached 6.5 percent. The current price increases both the cost-push factors, but also driven by demand factors, mainly cost-push. He stressed that, with 1994 different, China has now entered the era of high-cost, high-cost era of cost-push inflationary pressures increase. This is manifested specifically in the following aspects. First, the high prices of agricultural products, it is necessary to prevent "a 100-grain prices." Second, labor costs will continue to rise, economic development, bid farewell to the era of low labor costs. Third, resources, and environmental costs will rise. Fourth, the energy price adjustment for price changes. Fifth, the exchange rate, raising the export tax rebate rate costs in the enterprise. Sixth, the monopoly profits to promote increased costs. Seventh, raising the cost of technological innovation. Eighth, the international market of raw materials and mineral commodity prices generally rose a greater impact on the domestic enterprises.

Gu Shengzu stressed that: the current structural prices although partial, but it also requires vigilance. In particular, we entered the high cost of the current era, the cost-push factor is very significant. At present, we should actively encourage enterprises to absorb rather than internal cost onto the field, specifically, can be taken following eight responses.

First, enterprise information. Conform to the trend of information technology is not only the trend of development of enterprises, but also enterprise cost savings, improving competitiveness, an effective way. By building the ERP system, Lenovo production in a series of management changes: inventory turns from 95 to 72 days in 2000 to 22 days, save money 2.1 billion. Second, industry clustering. Have had such a case, in a steel-framed structure Wuhan project bidding, a very good local Wuhan Iron and Steel Enterprises, but their enterprises metric tons of Steel offer is higher than 8,000 yuan, it will be a loss. Xiaoshan in Zhejiang and much of the Price of Steel enterprises only 5,000 yuan, the gap great. The reason is that the Xiaoshan Steel Industry Cluster their products cost much lower. Third, develop intensive. Enterprises should strengthen their human resources management, increase staff training, staff motivation to create learning organizations, and realizing the quality of the laborers and social structure in line with the requirements of production. At the same time, technology upgrading, and promote industrial upgrading to achieve a "black manufacturing" to "green manufacturing" changes. Fourth, it is of strategic nuclear naturalization. The last in the early 1980s, the United States set off a wave of opposition diversified, some large enterprises have introduced naturalization nuclear strategy. At present, about 80 per cent of private enterprises is a pluralistic development. From a strategic sense, "return to the" one-sided pursuit of diversified business scope of the amendment is to proceed from a long-term strategy "of growth" and "qualitative improvement" between the balance. Fifth, the management modernization. In modern management, and advanced logistics management has become the "third profit source." According to statistics, China's logistics costs accounted for about 20 per cent of GDP, and the developed countries only 10 per cent. Management Modernization model also involves management issues. For example, Zhejiang, and Guangdong private enterprises are faced with the issue of inter-generational transmission. Some, unable to succession, and some do not want to take over, then some of the classes, but the older generation "retired, Chuichentingzheng" serious new and old generation gap, the private corporate governance model there are still quite a lot of problems. Sixth, the rationalization of distribution. Their layout is not the current balance. In some eastern areas, due to land, energy, environmental pressures, the existing local area, low value-added products of labor-intensive industries are being relocated. The world's largest electronics manufacturing enterprises in Shenzhen Foxconn because of the rising cost pressures, which have been central Wuhan transfer. Seven international operators. Enterprises can be through industrial upgrading, and can also transfer to deal with high-cost industries. "World War II", the traditional industries, labor-intensive and resource-intensive industries, which do not have a comparative advantage in industries from the United States in accordance with the gradient to Japan, West Germany to the Asia's "Four Little Dragons" and other newly industrialized areas then to China as the representative of the diverted into developing countries. With the improvement of factor costs, China's enterprises can also "going out" to the elements of resources cheaper region. Eighth, the government will reduce the tax burden, reducing corporate cost pressures. "15", China's average annual GDP growth rate of about 10 percent, while the average annual revenue growth rate is above 20%. Some areas "on the tax, and local fees on the phenomenon of" serious, non-tax burden on the private sector is still serious. In their own digest the meantime, the Government should be timely and appropriate to reduce the tax burden for the enterprise development policy support. Information Source: Published by: Global Network Steel