China's mold making sector plodding forward

Tony Zhang

Published: April 23, 2014 1:25 pm ET
Updated: April 23, 2014 1:29 pm ET

Image By: DC Mould (HK) Ltd. Tony Zhang

Related to this story

Topics Molds/Tooling, China

The U.S. manufacturing sector is showing what appears to be the most stable and significant recovery since the recession. In fact, small and mid-sized enterprises are quickly rebounding with rising optimism.

A lot of it owes to the work done by the U.S. government.

President Obama said the U.S. will once again become a manufacturing powerhouse. I believe it will happen soon, because this country possesses advantages in energy, land, capital, technology, among others.

In Michigan, investors in the manufacturing sector are welcomed with very affordable land, tax exemptions and even cash allowance for creating jobs. The U.S. also has an efficient government and well established legal system.

In contrast, China’s manufacturing industry, especially the injection mold industry, faces fast inflating wages and land prices.

It has become difficult to obtain land for the construction of a plant, especially for small and medium-sized businesses. Land brokers and consortia with government backing, state-owned enterprises, and large public companies have easy access to land resources, resulting in spikes of factory building rent and industrial-use land prices.

This type of profiteering from land trading sets a bad example for business owners. They no longer are willing to engage in real manufacturing. They instead invest in land and real estate. Small factory owners in Shenzhen who don’t have sufficient funds to buy land there go back to their hometowns and use their connections to purchase land. They claim they would build industrial parks and invest hundreds of millions in the local industry, but their entire purpose is just to get the land.

The government is inefficient, and sometimes even hindering.

Many of us working in SMEs have probably encountered “problems” with fire department, environmental protection, quality inspection and other government agencies. Whether it’s a certification or inspection, it always, overtly or covertly, becomes a significant cost. As long as you pay the agencies, you’ll get a pass. If you don’t pay, you may end up spending a lot more [trying to do things the right way] but not going anywhere.

We don’t have good financing channels in China, financing costs are overly high, and the credit system has failed to be established.

With impetuous business owners looking for quick profit, and corrupt and inefficient government at all levels, where are they taking China’s manufacturing?

With the Dow Jones Industrial Average reaching new highs, China’s similar indexes are still hovering at a low level. What does the economic barometer indicate?

Business owners face different options. To sell the factory, go back home, buy land and enjoy a peaceful life? Or to stick to manufacturing, continue to put in hard work and hope to achieve success?

Many SMEs in the mold making or injection molding industry have dozens to hundreds of employees, the vast majority coming from the bottom of society. A monthly income of a few thousand yuan supports a happy family.

In small factories, employees can directly interact with the factory owner, many of them learn valuable skills by observing how the boss starts and runs the business. Once they come up with some money, they can start their own business.

In fact, many business owners in Shenzhen and Donguan started from scratch like that.

Things are tough, but they work hard and never give up.

Tony Zhang is founding owner of DC Mould (HK) Ltd. He graduated with a degree in mold design and production from a technical school in Sichuan in 1989, moved to Guangdong province in 1991, and founded DC Mould in 1997. He immigrated to Canada in 2012.


Comments

China's mold making sector plodding forward

Tony Zhang

Published: April 23, 2014 1:25 pm ET
Updated: April 23, 2014 1:29 pm ET

Post Your Comments


Back to story


More stories

Image

Gerresheimer opens first development center in China

October 24, 2014 1:34 pm ET

Medical molder Gerresheimer AG has launched a development center for medical plastic systems in Dongguan, China.    More

Image

Arburg expands presence in China

October 24, 2014 11:34 am ET

German machinery maker Arburg GmbH + Co KG has expanded its office in Shenzhen, China, making it the company's first competence center for automation ...    More

Image

SRG opens second China auto parts factory

October 24, 2014 11:25 am ET

U.S. automotive supplier SRG Global Inc. said Oct. 23 it is opening its second plant in China, an injection molding, plating and painting facility in ...    More

Blow mold maker adding laser cladding

October 24, 2014 10:26 am ET

Blow molds need to be strengthened at points that wear, and an official of Canadian blow mold maker Garrtech Inc. said laser cladding can replace...    More

Image

Hasco gets into augmented reality

October 17, 2014 6:00 am ET

Mold makers may be used to seeing cores and pins on the exhibition stand of a supplier — but not augmented reality that looks like it comes from...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events