Unit C,9/F Winning House,No.72-76 Wing Lok Street,Sheung Wan,HK
Supply Side Reform is new. How to understand Supply Side Reform?
When Chinese economy achieves middle income, the advantage of low cost will lose gradually. China will be hard to complete with the low income countries in the low-end market, also hard to complete with high income countries in the middle and high-end market. Under such awkward conditions, the economy of China will easily stop growing.
Take outdoor iron furniture industry as example. The quick development in the last years benefit from the real estate. The hidden crisis can not be seen, such as increasing human cost, raw materials cost and management cost, etc. Since 2013, when the economy downs, the crisis comes out. Comparing with Southeast Asian countries, the human cost is more than 4 times and the materials cost is more than 3 times higher. That means the final price in the terminal market is a few times higher. Comparing with Italy, France and Germany, their designs and techniques lead in the middle and high-end market, the outdoor furniture enterprises of China always do OEM or ODM. They do not have price advantage nor brand advantage. So a lot of high-end customers will purchase in Europe.
Of course, Supply Reform has negative effects. It may increase the unemployment rate. During the upgrade, the traditional industry will eliminate some excess capacity and some will realize automation which will need fewer workers. But it is an inevitable process.
Now let us come to GH METAL PRODUCT CO.,LTD.. It is an outdoor furniture factory with more than 10 years, with rich experience in product development and export to all over the world. Now it is also reforming. It kept the old projects such as iron bench, iron base and iron street light. It also tries to develop new projects such as plastic chair sets, which win good feedback from the customers with their absolute high quality. The new foldable chairs for outdoors also win good orders.