China Made Difficulties

At the critical moment, "the world factory" is coming. The Olympic Games just ended is not only a great event in sports but also the best affirmation of China's reform and opening up.

After 16 days of revelry, life returned to normal, and we faced a severe economic situation.

Three problems have led to a serious situation.

First, the real estate crisis.

The government's land sale and loose credit policy are considered to be the main reasons for the soaring housing prices. International hot money and domestic speculators take this opportunity to push the bubble to the top. Now, with the withdrawal of offshore capital, housing prices are already high and the industry is facing recession.

The world economy has been in a low ebb because of the subprime mortgage crisis in the United States.

The biggest three economies in the world: the demand in the US, Europe and Japan is sluggish, and the export orders of China's export manufacturing industry are decreasing.

Although China's exports are still growing in 2008, the growth rate has been greatly reduced.

This indicates that China may face a more difficult situation in 2009.

The cost of export manufacturing is also rising.

This includes several aspects: raw materials, energy and land prices, labor costs and environmental costs increase, and tax incentives for exports are becoming less and less.

Low cost is the main weapon of "made in China" in international competition.

In the past 20 years, cheap labor, land and energy have led the manufacturing industry to move from Taiwan, Hongkong and Malaysia to China.

Now China is losing this competitive advantage.

Our interview found that manufacturing capital is beginning to look for cheaper manufacturing bases, while Chinese local government officials are busy trying to retain enterprises in their jurisdictions while planning pformation.

It remains to be seen whether the efforts of local governments are effective.

Compared with the real estate industry developed only in the 10 years after the Asian financial crisis, "made in China" is not only the engine of China's economic growth, but also absorbs about one hundred million of the employed population, most of whom are migrant workers from the countryside.

The prospect of "made in China" is related to the future of social stability and reform.

Only by leaving "made in China" in China can we gain time for further reform and economic upgrading.

Has the good time passed? Some people think that the good times are gone forever. Some people think that good times are always in waves.

In front of a crowded factory floor with low floors, Mr. Guo worried about his increasingly thin production line.

It had just rained, but only the air-conditioned workshop was installed in the workshop. Mr. Guo's office building was very sultry and even the lights were turned off.

The situation of power shortage became serious again in the summer of 2008.

The town greeted the factory so as to save energy as much as possible.

After 15 minutes of talking, everyone sweating profusely. This undoubtedly makes visitors feel more deeply and intuitively about the difficulties faced by the factory.

Finally, Mr. Guo regretfully suggested that we should talk at the gate below the office building because it might be cooler.

He talked about topics: prices of raw materials, appreciation of the renminbi, the labor contract law and the worldwide drop in laptop prices.

From the Yangtze River Delta to the Pearl River Delta, journalists have been visiting the world's "made in China" base for 10 years. Entrepreneurs, technologists, government officials and economists are all talking about the same topic. Everyone, like a region that has just experienced the epidemic of influenza, shows similar melancholy and a loss of future.

Only those different expressions of sadness can add some personal color to these topics.

Along with Mr. Guo's guidance, looking at it, a piece of land that should have been a beautiful scenery of the south of the Yangtze River can be seen in a dense factory building similar to that behind him. But what Mr. Guo himself sees is that there are several people in every workshop who are under heavy pressure like him.

These factories are located in Dianshan Town, Kunshan, and only a dozen minutes' drive from Qingpu, Shanghai.

The scene here is the epitome of Shanghai's suburban counties and towns in Kunshan, as well as the epitome of "made in China".

The best time has passed. If a manufacturing company has only 500 employees and the factory occupies only 30 mu, it is hard to believe that it can represent the scale of "made in China".

However, in every four laptop computers around the world, there is a product of Mr. Guo, a device for CPU cooling of laptop computers.

The forklift truck loads the raw materials off the truck and enters the workshop, where the workers begin to cut and grow copper pipes with different sizes and sizes. After a series of processing, the final formed copper tubes are stacked together, and Mr. Guo hints that they can feel the thermal conductivity of the product.

Just pick up a copper tube and dip it in hot water. The other one feels the temperature of the hot water in a twinkling.

The principle of making the heat dissipation module looks so simple. The copper tube is a good conductor of heat. It can pmit heat very quickly. It can make the core component of the notebook CPU run at high speed without fear of being damaged due to overheating.

50 years ago, the original form of this technology was only applied to space technology in the United States.

The satellite runs in space. The temperature on the sun faces 300 to 500 degrees Celsius, while the shady side temperature drops to 100 to 200 degrees below zero Celsius. No material can withstand such a temperature difference.

In the end, NASA's experts decided to wrap up the satellite with copper material to keep the surface temperature of the satellite consistent.

After the invention of the first notebook computer in Japan, this technology solution is used to solve the heat dissipation problem of computer components.

In 1998, when Mr. Guo returned to Taiwan from the US, the fast-growing notebook computer industry was booming. Taiwan has become the world's largest notebook computer manufacturing base.

He went into a traditional hardware manufacturing company and developed his laptop cooling program, which was flooded by the United States and Japan at that time.

This year, a radiator tube of 20 centimeters long and 3 to 4 millimeters in diameter is worth 10 dollars.

In the age of 5000 to 8000 dollars per laptop, no one felt the price of the radiator was too high.

In a market where everything is growing, Mr. Guo's success story is also the most common.

He and a marketer, with his own invented heat pipe, waited at the door of the computer factory to sell to the person in charge of the factory, explaining why their products could defeat the products of the United States and Japan.

When Taiwan's manufacturers finally accepted Mr. Guo's products, the cost of the heat sink almost fell overnight to $2.

Historically, this is the most vivid example of technology changing our lives.

Of course, this change did not stop because Mr. Guo invented his own cooling plan.

Since then, 10 years later, the world has changed again.

In the factory buildings in Kunshan, the processing and testing of products are carried out at high temperatures. Young workers, with their skilled and mechanical movements, continuously produce various specifications of copper pipes beside the loud fans.

In an air-conditioned workshop not far away, it is necessary to change shoes or put on shoes covers to show the need for fine processing to environment. Here, copper tubes are processed into different heat dissipation modules.

After the final quality inspection, they were packed into cartons with DELL or HP words.

The forklift trucks are sent out again and loaded into containers.

The truck will start from Dianshan town and drive on the expressway. According to the distance, several days later, customers from Kunshan, Xiamen, India, Eastern Europe and South America will receive the heat dissipation module from here.

They were then loaded into a notebook computer.

The cargo ship started again, and the portable laptop was shipped to our electrical appliance store, including China, to enter our life.

It is said that Thomas Friedman, a reporter for the New York Times, is writing the famous book about the best seller of globalization on a HP computer.

In Mr. Freedman's HP computer, is there a cooling module from Dianshan Lake, China?

The way to change the world of laptop computers is not to spawn a few great ideas, but to change the way of life of ordinary people with a huge amount.

Over the years, Negroponte, author of digital survival, is committed to a OLPC OneLaptopPer Child for every child to own a laptop.

He combined Intel, Google and AMD IT giants to reduce the price of laptops and software, and then send them to children who are poor and lack of educational opportunities through the purchase of charitable organizations.

Nero George grant sees laptops as the human intelligence that can be carried everywhere, and believes that they will change the lives of poor children and change the world.

In this ambitious plan, quantity and low cost are undoubtedly the key to changing the world, which is what Mr. Guo and "made in China" are best at.

But by 2008, Mr. Guo, who was good at reducing costs, felt that the best time had passed.

Mr. Guo missed the golden age of a module worth 10 dollars.

Good time lasts not long. It starts in 2000 and ends in 2002. The head and tail are only 3 years old.

At that time, Mr. Hou's business did not take up such a large share of the market, but the net profit rate was above 20%.

Now, 25% of the market share does not allow him to ease his worries.

Since 2006, all kinds of factors are eating away his profits.

The first is the price rise of raw materials.

The price of copper began to rise 5 years ago in the international market.

Some say this is caused by China's bulk purchases.

In fact, demand for copper is rising in most emerging market countries.

Whether China and India or Russia and Brazil in the BRICs, the rapid economic growth has put forward higher requirements for the power infrastructure.

Copper is the main material for manufacturing cables.

By 2008, the price of copper has doubled.

As the main material for making computer thermal modules, copper has accounted for 80% of the price of the product.

Despite this, Mr. Guo did not raise the price requirement to the customers. On the contrary, the price of the cooling module was still declining due to the popularity of laptop computers and the rapid decline in prices.

Since the Yuan's policy of abandoning its fixed peg to the US dollar in 2006, it has entered a fast and slow channel for appreciation of the US dollar, which has appreciated about 20% against the US dollar so far.

For export enterprises that have settled the price of products in the US dollar and settled the cost of production in Renminbi, there is almost no room for price increases for the "made in China" products that are known for their low cost, so appreciation means a drop in profits.

Another blow is that the government has abolished tax preferences for export processing enterprises. As a Taiwanese exporters, Mr. Guo's feelings are very typical.

The corporate income tax rate he raised has risen to 25% from the lowest 12% before the merger of the two taxes, and the tax rebate rate of VAT has dropped from 17% to 13%.

At the same time, due to fierce competition, the prices of "made in China" in the European and American markets have been reduced to the lowest possible range.

More than 10 years ago, when Mr. Guo's first customer DELL asked him to design the cooling module, the design cost was NT $1 million. Today his client does not need to pay any design fees separately.

As the world's second largest laptop manufacturer and Mr. Guo's biggest customer, DELL has its own assembly plants in Asia, Europe and South America, but suppliers scattered around the world must be responsible for logistics and warehousing when they supply to assembly plants.

To this end, Mr. Guo must be in every DELL.