The Dongguan Association of Enterprises with Foreign Investment held its inauguration ceremony on the evening of 15th March. During this event, the association released a questionnaire survey report regarding operating conditions of member companies in 2017. The report shows overall environment development continues to be steady and good. 96.16% of companies stated they did not plan to transfer or leave Dongguan, 82.05% of the respondents had plans to increase their investment in Dongguan, and 12.62% planned to increase investment or expand production in the near future.
Surveyed companies maintain profit growth against the trend
According to Lin Hansen (President of the Association), there are currently more than 2,300 member companies and 35 branches in the association. Each year, the association distributes a questionnaire survey to member companies regarding the previous year. The enterprise conditions and data collected by the association have become an important reference for government policy making.
This time, valid questionnaires were collected from 339 companies across various industries, though chiefly electronics, electrical appliances, and textiles. The average investment period of the surveyed companies in Dongguan was 18 years, among which 120 companies had invested for more than 20 years and 10 companies more than 30 years.
Last year, the RMB exchange rate fluctuated frequently. The operations of 73.46% surveyed companies were affected. In addition, companies also faced unfavourable factors such as rising labour costs. However, through internal initiatives such as researching internal potential, improving the level of automation and enhancing technologies, the profit of 339 respondents increased by an average of 9.78% during 2016.
Over 90% of respondents willing to take root in Dongguan
96.16% of the 339 surveyed companies do not plan to transfer from Dongguan or leave Dongguan. According to previous data, the proportion of companies stating that they would continue to invest in Dongguan is increasing. In addition, 82.05% of surveyed companies plan to invest a combined total of 1.7 billion RMB in Dongguan. 12.62% of companies plan to increase production in the near future.
Liang Weihao (honorary President of the association, also the chairman of Dongguan Deli Watch Co. Ltd), confirmed that Deli is planning to build an international watch culture industrial park in Fenggang Town, with a total investment of approximately 500 million RMB. The first phase is expected to consume 3 million RMB and complete within 2 years. The overall project will be completed in 3-5 years.
In terms of transformation and upgrading, 116 of the 339 surveyed companies have already implemented “machine substitution”, substituting machines for human labour. The average investment for this is over 18 million RMB, reducing the average workforce by 15.26%. One company decreased their workforce by 70%. As a result, the average production cost of enterprises has dropped by 11.16% and the maximum by 50%.
In terms of research and development, 142 of 339 companies surveyed have set up specialized R&D teams and 5.83% are planning to set up R&D teams. Among the companies that have established R&D teams, the average ratio of R&D investment and registered capital was 10.22% last year.
(By Nicky Yu, Stefanie Tan and Sev Pischl)
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