How to view the pressure on enterprises? Xinhua News Agency: For the problems encountered in the market, we should look to the market for answers

China has over 180 million business entities, varying in size and type, distributed across various industries. They form the micro-foundation of the market economy and vividly represent the Chinese economy.

Currently, the external environment is undergoing many changes, and the economy is facing pressure. How should we view the difficulties faced by some enterprises? How should companies respond?

(1)

Lanhua Medical is a medical consumables manufacturer based in Ningbo, Zhejiang. Since the beginning of this year, the company has felt pressure in its operations. On one hand, traditional products like masks are facing low-price competition in the industry; on the other hand, new products like self-developed fever-reducing gel have just been launched, and the market still needs to be expanded.

The company's chairman, Cao Jun, lamented that business has become increasingly "intense" this year. He has been busy on the road, consolidating existing distributors to maintain volume and exploring new partners to create growth, with revenue basically remaining stable.

The word "intense" captures the pressure and challenges that enterprises feel while navigating the market.

Where does the pressure come from? First, from the demand side.

When the reporter contacted Wang Hanchao, chairman of Li Gao New Energy Technology Co., Ltd., he had just returned from a business trip.

He is either expanding the market or on the way to do so. This leader of a power battery system manufacturing company has taken over 100 flights this year alone, not only deeply cultivating the domestic market but also conducting research abroad, establishing branches in Western Europe, Africa, and other regions. "Market competition is fierce; we need to plan ahead and quickly explore new customers."

In the face of a "reshuffle" in the retail industry, Yonghui Superstores has accelerated its self-adjustment pace. Wang Shoucheng, vice president of Yonghui Superstores, admitted that discovering demand is currently the biggest challenge, and the company is gradually exploring, expecting to increase the number of adjusted stores to 40 to 50 before the Spring Festival next year.

Expanding the market and finding demand is the norm for many enterprises. Some business leaders say that competition in "volume" is becoming increasingly fierce, and every day they wake up thinking about how to retain customers. Others report that competition in "quality" is becoming more pronounced, as consumer demands are increasingly diverse and personalized; if they cannot adapt to changes, they could be replaced "in an instant."

On the supply side, challenges also abound.

In interviews, many business leaders discussed how to pursue extreme cost-performance ratios while ensuring or even improving product quality.

As competition among peers intensifies, many enterprises must maintain their existing scale advantages through price advantages, which requires maximizing efficiency and reducing costs, posing significant tests for the stability of the capital chain and the efficient operation of the supply chain.

Currently, many industries are experiencing rapid technological iterations and accelerated innovation rhythms. How to respond to market competition with continuous and efficient innovation is also a practical issue faced by enterprises.

In Songshan Lake, Dongguan, Memory Storage Technology Co., Ltd. is tirelessly advancing the research and development of high-capacity storage devices to meet the upgrade requirements of electronic products for memory. The company leader stated that the innovation cycle for storage chips is becoming shorter, and they cannot afford to relax for a moment In-depth analysis of the various challenges faced by enterprises is related to the broader economic development environment:

Insufficient domestic effective demand. During the structural adjustment process, on the investment side, the growth rate of fixed asset investment is below expectations; on the consumption side, the total retail sales of consumer goods in society is in a recovery phase. These factors impact the sales of goods and services for enterprises.

The continuous advancement of industrial upgrading makes the squeeze from the conversion of old and new driving forces unavoidable. On one hand, the development of emerging industries has a certain impact and substitution effect on traditional industries, leading to a shrinking market scale for some traditional industries; on the other hand, technological changes are accelerating, and time and opportunities do not wait for anyone. These challenges force enterprises to face the pain of adjustment while also needing to engage in the race for innovation.

The world economic recovery is weak, global trade protectionism is intensifying, and uncertainties and instabilities are increasing. Some industries are experiencing cyclical fluctuations, and some enterprises have not yet adapted to the changes in market and industrial development.

These difficulties arise from both external pressures and internal challenges, environmental factors and intrinsic reasons, resulting from a complex interplay of multiple factors. They are also a test that our economy must inevitably face as it climbs and overcomes obstacles towards high-quality development.

(2)

It is undeniable that the current pressures and challenges have put some enterprises in difficulty. However, in the process of development, which enterprise has not experienced setbacks or faced tests? The key is how to respond.

At the 19th China International Small and Medium Enterprises Expo held in Guangzhou, Li Weichong, president of Ligong Industrial, brought a newly developed robot to the exhibition hall.

There are many "players" in the robot market. However, this product is different from the robots commonly used for service and mass production on the market, as it targets small-batch, personalized operations.

Li Weichong found that the pressures in economic operations have rapidly increased the demand for digital transformation among small and medium-sized enterprises. These factories are small in scale, and conventional smart equipment is often not universal, leading to high costs for production line transformation. "We diagnose on-site at each customer's factory, identifying the problems in their digital transformation, and design modular robots and personalized software packages based on different application points," he said. By tailoring solutions to the needs of small and medium-sized factories, the company's digital transformation projects have increased by 200% this year compared to last year, finding breakthroughs in niche markets.

Markets are discovered, not waited for. When facing problems in the market, one must seek answers from the market.

Recently, some changes are thought-provoking:

The steel industry is under short-term pressure, but focusing on new "steel" demands such as electric vehicles, high value-added product sales are strong; the notebook computer market is nearing saturation, but gaming laptops and ultra-thin laptops targeting personalized needs are growing significantly; large performances are driving cultural tourism, with the e-commerce transaction volume for tourism and entertainment services increasing by 15.3% year-on-year in the first three quarters... These new growth points in niche areas are the result of enterprises recognizing changes, adapting, and seeking transformation, capturing new business opportunities.

Exploring broader markets. In the first 10 months, the export of private enterprises in China increased by 9.3% year-on-year, the export of new energy vehicles grew by 6.3%, and the export of electromechanical products rose by 8.5%... Behind these numbers are Chinese enterprises venturing out and battling the waves in international markets Competition is always fierce, and difficulties will always exist. What determines the development prospects of a business is not how many difficulties there are, but the perspective on difficulties, the methods to cope with them, and the determination to solve them.

"The harder the road, the stronger the competitiveness," this saying is particularly evident in Jiangfeng Electronics, a manufacturer of high-purity metal sputtering targets.

The technology difficulty and supply chain barriers for high-purity metal sputtering targets are extremely high. For 19 years, the company's founder, Yao Lijun, has been focused on this field. During the toughest times, the company's monthly sales dropped to 80,000 yuan, while the monthly R&D expenses reached several million yuan.

"I thought about selling my house and car, but I never thought about giving up." After overcoming the 12-inch tantalum target in 2016 and breaking through the HCM-shaped copper target in 2010... With hardcore technology building a "moat," Jiangfeng Electronics has maintained a dominant position in the global target market regardless of industry fluctuations.

Seeking solutions through innovation and space through transformation.

Faced with fierce competition in the glass industry, Wang Huanyi, chairman of Sihang Glass, chose to embrace digitalization, spending nearly 300 million yuan over two and a half years to transform the entire factory. By introducing intelligent production lines, the entire process from material preparation, feeding, melting, to drawing is connected digitally, reducing the company's overall costs by 5%.

Wang Huanyi admitted that the expenses for digital transformation would bring financial pressure, but technological transformation is crucial for long-term development. "If the quality of the company's products improves, market recognition will also increase," he said, noting that this year, the company's order volume grew by 20% compared to last year.

To meet the ever-changing demands of consumers, the time-honored brand Wu Yutai has set a three-year "lifecycle" for each product, upgrading and iterating 20 to 30 items annually, developing tea-related products like ice cream and tea biscuits, and transforming stores into cultural experience shops.

Upholding integrity while innovating. With the quality and craftsmanship of the "old" and following the "new" paths and products, Wu Yutai achieved a counter-cyclical growth with annual sales of 1 billion yuan in the fiercely competitive tea market.

In times of "downturn," use "progress" to hedge; in "transformation," use "practical action" to build a ladder. During the research, the reporter felt that many enterprises, when faced with difficulties, strive to break through and move forward, seeking innovation in change, progress in innovation, and breakthroughs in progress.

In the first three quarters, the R&D investment of Chinese listed companies reached 1.1 trillion yuan. The R&D intensity of companies on the ChiNext, STAR Market, and Beijing Stock Exchange was 4.74%, 9.94%, and 4.73%, respectively, indicating a boost in innovation.

In the first three quarters, 6.191 million new private enterprises were established nationwide, with "four new" economy private enterprises accounting for 40%, expanding their operational fields.

In the first three quarters, private enterprises' imports and exports to ASEAN, Africa, and Latin America grew by 12%, 6.4%, and 13.9%, respectively. The online retail sales of physical goods increased by 7.9% year-on-year, and investment in manufacturing technological transformation grew by 9.5%, promoting transformation and upgrading.

There are opportunities in crises, and it is up to people to make it happen. Facing challenges head-on and advancing against difficulties continuously stimulates the upward growth of enterprises.

(3)

Problems should be viewed dialectically and dynamically. Difficulties are not immutable; they can be transformed and overcome through effort A good business environment is like sunshine, water, and air; it is indispensable for business entities and serves as an important support for enterprises to cope with external shocks and challenges, and to enhance their competitiveness.

The 20th Central Committee of the Communist Party of China made new deployments to optimize the business environment. On September 26, the Central Political Bureau held a meeting to deploy a package of incremental policies. Since the beginning of this year, from the central to local levels, policies have been continuously intensified and strengthened, launching a series of "combined punches":

Effectively and powerfully reducing the burden on enterprises, establishing a coordination mechanism to support financing for small and micro enterprises, promoting a further decline in the comprehensive financing costs for enterprises, continuously implementing policies such as the pre-tax deduction of R&D expenses, and introducing a series of effective measures to reduce logistics costs for the whole society;

Strictly regulating law enforcement and supervision, improving the legal and regulatory system and judicial mechanism for the repayment of debts owed to enterprises, establishing and improving the administrative law enforcement assistance system across regions, and perfecting the regular collection mechanism for problem clues, resolutely correcting and seriously holding accountable for arbitrary charges, fines, and levies;

Precisely supporting enterprise development, with multiple departments establishing and improving a regular communication and exchange mechanism with enterprises, launching a new round of support policies for specialized and innovative enterprises, and providing central financial support for more than 1,000 key "little giant" enterprises.

At the same time, in response to the problems encountered in economic operation, especially in enterprise development, a series of policies and reform measures are more precise and focused: efforts to boost demand, with "two heavy" policies strongly supporting a number of major engineering projects, and "two new" policies driving continuous growth in related product sales; further stabilizing the fundamentals of foreign trade, with the issuance of "Several Policy Measures to Promote Stable Growth of Foreign Trade," providing substantial support for foreign trade enterprises; focusing on enhancing confidence in the private economy, with the draft law on promoting the private economy publicly soliciting opinions, and accelerating the construction of a unified national market...

These measures have made us clearly feel the determination and strength of the Central Committee of the Communist Party of China to solve the difficulties in enterprise development and stimulate the vitality of enterprise development.

Currently, the effects of policies are being released, and the market is warming up, with a more obvious trend of stabilizing and improving expectations.

In the first three quarters, the main policies supporting technological innovation and manufacturing development in the current policies have reduced taxes and fees and provided tax refunds exceeding 2 trillion yuan.

In October, national enterprise sales revenue increased year-on-year, rising by 1.3 percentage points month-on-month; the manufacturing PMI was 50.1%, rising into the expansion zone for the first time since May this year; the non-manufacturing business activity index has remained stable around 50% for several months; the small and medium-sized enterprise development index rose by 0.3 points compared to September, the largest increase this year.

Although there are still many difficulties at present, the confidence of business entities is recovering, and more and more enterprises are moving forward with greater determination At the Seres Super Factory located in Chongqing Liangjiang New Area, over 3,000 robots are working collaboratively. The factory's general manager, Cao Nan, stated that the factory is currently operating at full capacity.

Tao Shaoyong, general manager of Anhui Ruide Microelectronics Co., Ltd., told reporters that the increase in orders has strengthened the company's confidence in additional investments to expand production capacity, and they plan to accelerate the intelligent upgrade of production lines in the coming months.

The market economy is a confidence economy, and the foundation of confidence lies within enterprises.

From the arduous exploration at the beginning of the reform and opening up to navigating the waves of the world economy, through financial crises and trade frictions, there have been many rapids and hazards. After numerous trials and tribulations, batches of outstanding enterprises have emerged. It is precisely because of the contributions and efforts of countless enterprises and entrepreneurs that the development and growth of Chinese enterprises today have been achieved.

It is undeniable that challenges still exist in overcoming difficulties, but China's economy is resilient, has great potential, and is full of vitality; the long-term positive fundamentals will not change. Our entrepreneurs are bold, visionary, innovative, and capable, nurturing the ability and determination for sustainable development while leading their enterprises to overcome difficulties.

Li Xinggen, chairman of Tian Sheng Sealing Co., Ltd., which possesses core technology in the sealing field and solves the problem of trace leakage in nuclear power plants, often uses the analogy of tightening screws to describe doing things, saying, "If you are going to tighten, you must tighten it all the way."

In the face of a complex and changing international market, Yang Shibin, president of Shanghai Jialinjie Textile Co., Ltd., discussed the company's strategies: diversifying impacts through global layout and continuing to follow up on technology and services. "Compared to the storms we faced before, this time is nothing."

Seeking change in difficulty, finding opportunities in challenges, and striving for progress is the logic that keeps Chinese enterprises moving forward and is also the confidence that supports the stability and long-term development of the Chinese economy.

This article is authored by Zhang Xinxin, Zou Duo Wei, and Wei Hongyi, sourced from Xinhua News Agency, original title: "Xinhua Commentary | How to View the Operational Pressure Challenges of Enterprises - Current Q&A on the Chinese Economy, Part Three"

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