The Pain Of Riding A Tiger

Although China's CPI data in May have not yet been released, many experts speculate that this year will hit a new high.

However, inflationary pressure is not only one of the major problems facing China at present.

According to the latest report released by the Wealth Management Research Department of UBS, although the price of emerging markets may have risen significantly in the world, the global inflation threat may return from 2013.

"The global economy has begun to recover gradually after the financial crisis.

In the process of recovery, various measures to stimulate the economy of various governments have stimulated inflation to a certain extent.

Dr.Shumeet Banerji, chief executive of Booz&Company, a management consultancy, said: "it is very obvious in two areas, one is the price rise of commodities, the other is food, because of the consumption structure, the developing countries may be more affected by the Dr.Shumeet."

How should Chinese enterprises cope with the global inflationary pressures of internal and external troubles?

Inflation will persist for a long time.

One side is from oil to cotton and then to gold.

Benage believes that as far as China is concerned, "because the Chinese economy will definitely continue to grow in the next few years, the pressure of price rise will continue.

Now, we are not talking about inflation, but how serious inflation is.

Judging from the attitude of the Chinese government, the inflation rate of 3%~5% is a goal they are trying to control. "

Xu Huchu, partner of Bosse company, also believes that the upward trend of global inflation will be a structural trend that has lasted for many years.

In the past twenty years, global inflation has declined sharply, mainly due to the participation of emerging economies in the global supply chain and the reduction of the prices of most manufactured goods.

At the same time, because emerging economies are not strong enough to affect global prices, commodity prices have remained relatively stable.

This actually creates room for western central banks to maintain interest rates at a very low level.

But now the situation has changed.

First of all, including China.

Survival skills under double pressures

"Relatively speaking, SMEs may be more affected by inflationary pressures."

Benage said that from the perspective of source of funds, SMEs actually rely more on the banking system rate, and the central bank is raising interest rates and deposit reserve ratio, which increases the financial cost of enterprises. On the other hand, the price of commodities is rising, resulting in small and medium-sized enterprises have to spend more money to buy raw materials.

"In fact, they are under double pressure."

Benage said that with the accelerated increase in the financing cost of enterprises, some SMEs even faced the problem of capital chain breaking.

In this regard, if small and medium-sized enterprises supply more powerful companies downstream of the industrial chain, and because the chain of funds is broken and these small and medium-sized enterprises have to withdraw from the market, they will also have losses to large companies downstream.

"Therefore, there should be a cooperative relationship between enterprises in the industrial chain, and large companies can help SMEs overcome difficulties."

In addition, small and medium-sized enterprises themselves also need to seek alternative financing means, such as venture capital, private equity funds, etc., but also consider other sources of funds, including some domestic private lending.

For enterprises in the face of rising costs, if the cost pressure can not be effectively pmitted to the terminal consumers, the operation of the enterprise will be very difficult.

However, because of the increase in costs caused by inflation, the challenge for enterprises in clothing, food retail, home appliances and other industries is that they should "pfer prices to consumers and not lose them."

Xu Huchu said, "usually, manufacturers themselves will bear part of the extra cost.

They dare not pass too much extra cost on to retailers or consumers because they are worried that their competitors will not do so.

Some enterprises will give up short-term real interests because they do not want to lose market share. "

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Therefore, with the increase of costs, how to maintain profit margins has become a big problem.

Face

For the Chinese government, we need to reduce the operating costs of the enterprises. One is to further improve the infrastructure construction. The two is to be more scientific and simplified in the process of import and export.

Not only in the production and manufacturing links of enterprises, but also in the whole industry chain, the sales cost of enterprises is also increasing, with the increase of staff cost and site rent.

Under the pressure of rising costs, some enterprises ensure the sustainable growth of enterprises by strengthening meticulous management and expanding online sales channels.

Whether we should first expand the expansion of foreign cities or whether we should carry out internal fine management first, Xu Huchu believes that, in any case, enterprises should first establish relatively mature business profit models.

Second, it depends on the lifecycle stage of the industry.

If it is in the stage of rapid expansion of industrial explosive growth, enterprises should, of course, expand first and then concentrate on intensive cultivation.

Besides, we should also observe the market situation in different regions.

For example, in the mature market of China's second tier cities, because the business layout has been relatively perfect, enterprises should be rational thinking and intensive farming, while in China's three to five tier cities, the market share can be given priority.