Shenzhen Jiucheng Foreign Trade Corporation's Profit Drops

Financing difficulties, weak external demand, falling orders and rising costs, many unfavorable factors continue to affect Chinese SMEs, Shenzhen foreign trade companies frequently warned. The survey shows that the profit rate of more than 90% of export enterprises in Shenzhen has decreased, and that 15 percent of companies have operated in losses.

"I studied a technology-based company doing integrated circuits and semiconductors. Last year, the total sales volume was 140 million yuan and the profit rate was 15%. This year, orders were cut in half, the overall cost was increased by 40%, and the cost of equipment, etc. Almost on the verge of losing money.” Recently, when Premier Wen Jiabao of the State Council conducted a survey on Guangdong's foreign trade companies, Guo Xiaohui, executive vice chairman of the Shenzhen Association of Enterprises with Foreign Investment, reported to Wen Jiabao as one of the representatives. "First Financial Daily" quoted its claim that foreign trade companies operating environment next year will be worse than this year.

A recent sample survey by the Shenzhen Association of Enterprises with Foreign Investment shows that due to factors such as artificial, raw materials, taxes, logistics, labor and capital disputes, rising costs, and the appreciation of the renminbi, more than 90% of Shenzhen's foreign trade companies have seen a decline in their profit margins. 65% of corporate profits fell by more than 10%, and another 15% of companies operated in losses.

Li Xiaobai, vice chairman of Shenzhen Anbo Electronics Co., Ltd., said that labor costs have increased by at least 40% from 2009 to now, driving overall costs up. The current profits of his company are almost zero.

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