Since this year, with the deepening of the global economic integration, the role of the global economic impact on the economy of our country further, the implementation of the new labor contract law will bring labor-intensive processing manufacturing chain reaction on the cost of production and labor, and raw materials prices, the appreciation of the renminbi and rising Labour costs are growing faster than that of companies such as expected, at the same time, export tax rebates and rise in interest rates is also the important factors that affect the rise in the cost of enterprise. Taking all the above factors into consideration, the average cost of the enterprise increases by about 10-20%, and the proportion that foreign investors can share after the production cost increases is very limited. Therefore, export enterprises are facing a severe export environment. At present, what enterprises are more worried about is that it is difficult to judge the trend of rising raw material prices and appreciation of the RMB in the future. Conditions and environment for the development of foreign trade are very worrying.

　　According to industry statistics, in the first quarter of 2008, the total sales volume of motor exported by the industry was 4.3878 million kw, an increase of 17.7% over the same period of last year (3.7272 million kw). The export generated foreign exchange was 103.66 million usd, an increase of 49.2% over the same period of last year (69.495,000 usd). Although the motor export of China maintained growth in the first quarter, the growth rate of export motor decreased somewhat. The total sales volume of export motor decreased by 14 percentage points compared with the growth rate of the same period last year.

　　The situation of foreign trade

　　2007-2008 was a difficult year for "made in China". The combination of internal and external factors, such as the reduction of export tax rebate and the deterioration of the external environment, has led to considerable difficulties for Chinese export enterprises and may seriously affect the overall economic growth. Against the dollar, the yuan is above 7, up more than 4 percent since 2008 alone (up 15 percent since July 21, 2005). China's exports grew 21.4 per cent in the first quarter of 2008, with real growth in the single digits excluding depreciation. Facing intensive domestic export tax rebates and processing trade policy adjustment, the appreciation of the renminbi, land, labor and other factors of production rise in price, as well as foreign trade protectionism looked up again, a series of challenges such as the United States subprime debt affect the international market demand, external the emerging economy's impact on exports, the policy factors contribute to export enterprises face difficulties, many economists have made "foreign trade export growth will slow next year" warning. In addition, the sharp rise in the cost of raw materials has made Chinese manufacturers "stuck at both ends". In particular, this round of global energy and food prices has made the situation worse for Chinese manufacturers.

　　The domestic environment

　　Raw material prices rise, resulting in rising costs to the industry's impact can not be underestimated. Iron ore prices this year, the machinery industry will inevitably lead to a deterioration in the overall production situation. The price of silicon steel sheet, the main raw material for motor production, has been rising since last year, up 23.7% year on year. Compared with iron and steel enterprises that can increase prices, the motor industry is a highly market-oriented industry with fierce competition. Since the supply contract has already been signed, the price cannot be readjusted, and the increased cost of raw material price rise can only be borne by the enterprise, even if the product price has been increased, the range is small. If the downward transmission of price pressure is likely to lose customers. The rise in the price of raw materials has directly increased the procurement costs of enterprises and squeezed the profit margins. Faced with the era of high steel prices, motor enterprises do not have too many choices, both can not rashly increase prices, internal and unable to digest. Enterprises can only make an article in the service, through quality products and quality services to win more orders, forming a virtuous circle.

　　Tight monetary policy affects the capital supply and capital turnover of enterprises. Since 2007, the strict monetary tightening policy has caused most enterprises to suffer from the shortage of funds. On the one hand, it has reduced the investment scale, reduced the number of engineering construction projects, and reduced the number of orders accepted by enterprises. On the other hand, it is more difficult for enterprises to obtain bank loans, which not only makes it difficult for enterprises to collect loans and turn over funds, but also may cause enterprises to idle production capacity and break the capital chain, threatening the survival of enterprises.

　　From 2007 to 2008, Chinese enterprises faced great pressure of rising costs. The rapid appreciation of the renminbi and a cut in export tax rebates have already squeezed thin profit margins. With the end of the demographic dividend, enterprise labor costs are also gradually rise, coupled with raw materials and energy prices, the increasing cost of labor and environmental factors, not only to locating in the low-end market, low product added value of small businesses face enormous pressure, also make some famous brand is facing the challenge of optimizing product structure, research and development of new products. Although there are factors such as the change of export product structure and the increase of high-performance products in export price increase, what is more important is the passive price increase in order to cope with the rising cost of products. Therefore, the traditional motor manufacturing industry relying on cheap labor and environmental resources to accelerate the transformation and integration is an inevitable choice.

　　China electrical equipment industry association of small and medium-sized motor branch of the statistical work in enterprise of national 56 motor 2007 annual statistical data analysis showed that: 56 motor enterprise product sales totaled 130.095 million kw, the ac motor sales of 122.999 million kilowatts, accounts for the ac motor output of 188.7722 million kw (65.2% of the national bureau of statistics). The economic operation of the whole industry shows a trend that scale growth is greater than benefit growth. At the same time, it also shows the characteristics that export motor output keeps rapid growth and the growth rate keeps falling.

　　At present, the overall trend of the economic operation of the whole industry is that the growth of scale is greater than the growth of efficiency, and some enterprises have taken on debt management. These problems have become the fetter of the rapid development of the industry. In recent years, the rapid development of China's electric power construction, driving the rapid development of China's small and medium-sized motor industry. In the future, the effective demand of motor market will continue to grow, and the development prospect of the industry is still promising. In the face of rare development opportunities, how to improve the core competitiveness of enterprises, improve product quality, put an end to low-cost competition has become an urgent task for the development of the industry.

　　In short, the motor manufacturing industry is facing difficulties in China's industrialization process has to bear the pain. However, we should see that it is this series of baptism that makes the era of low-price competition gone forever, and the export environment will become better and better, which has become the main reason for the motor industry to maintain a high export growth rate in recent years. We will accelerate the transformation of the economic development model, focus on intangible products and assets, increase investment in technological innovation, product and industrial research and development, market development, human resources training and other areas, rely on energy conservation and emission reduction to reduce costs and absorb some of the factors driving up prices. We believe that with the joint efforts of the small and medium-sized motor branch of China electrical equipment industry association and the majority of member enterprises, we will surely seize the good development opportunities brought by the sustained and rapid development of macro economy, further obtain the international competitive advantage and market position, and realize the leapfrog development of the small and medium-sized motor industry.