China Council for the Promotion of International Trade (ccpit) 2009 Preface

Light Industry Is the Major Industry Absorbing Labors for Employment

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Light Industry Is the Major Industry Absorbing Labors for Employment

At present, China’s light industry is still a kind of labor intensive industry. Most enterprises covered in the industry are of medium and small sizes. Enterprises under designated size form a comparatively large proportion. Labor employment is not only related to the increase of people’s living standards but also the social stability and economic development. The current employment situation allows no optimism. There is still a lot of surplus labor force in rural areas. College graduates are facing a grave situation in employment. It is hard for laid-off workers in urban areas to land a job. From 2007 to 2008, millions of college graduates failed to get employed each year, while nearly over six million students had graduated during this period. College students are under huge pressure of employment. Moreover, China's economy is affected by the global financial crisis, while enterprises are forced to shut down. The demands for labor are inevitably cut down because of this. Some enterprises have begun to slash jobs in response to changes in the market. The migrant workers in China also need to get employed. Therefore, the labor employment situation will allow no optimism in coming years.

Light industry is the major solution to address the problem of labor employment. In 2008, 20.42 million people got employed by the enterprises above designated size in the light industry, accounting for 25% of those employed by all enterprises above designated size in China. With those enterprises under designated size, the light industry absorbed the employment needs of over 35 million people. A large number of medium- and small-sized enterprises in the light industry offered a large number of jobs for migrant workers and urban labours at grassroot level. China’s light industry has become the backbone benefactor for agriculture, farmers, and rural areas. China’s light industry is facing with a product market with shrinking demands. Those medium- and small-sized enterprises depending on export are running at half capacity or have stopped production, while employees are on leave. China is currently implementing the plan of reviving light industry for the major purpose of address the employment problem. Because the light industry is closely related to rural areas, the development of light industry has not only boosted related agricultural development but also helped create jobs for about 200 million people from rural areas. Seventy percent sectors and 50% output of the light industry are related to deep processing of farm produce, while over 200 million farmers are benefitting from it. The light industry is playing an irreplaceable role in increasing farmers’ income, promoting the industrialization of agriculture and accelerating urbanization. The light industry has already had more than 150 characteristic regions and industrial clusters with an annual output of 1,200 billion yuan, accounting for about 16% of the total. They have become the important powerhouse to promote the development of light industry and regional economic development. Therefore, the development of China’s light industry plays a key part in addressing labor employment.

Chapter 2 Overview of the Development of Global Light Industry

The world has not a clear classification for industries at present. The classification of light industry doesn’t exist in some countries and regions in Europe and America. As for the classification of light industry in China, it is classified as consumer goods industry in foreign countries. Moreover, consumer goods are further classified into fast moving consumer goods and durable consumer goods according to lengths of their life cycles. Fast moving consumer goods generally include packaged food, personal hygiene products, tobacco, alcohol and drinks. “Fast moving” means they are daily necessities and consumed by consumers repeatedly and frequently, while profits and values are realized through market volumes of certain scales. Typical fast moving consumer goods include chemicals for daily use, food, drinks and tobacco. The papermaking industry, food industry, beverage industry, alcohol industry, dairy industry, daily chemical industry and battery industry in China belong to fast moving consumer goods industry.

Durable consumer goods generally include furniture and household electrical appliances which have longer life cycles and are purchased by consumers less frequently. The furniture industry, household electrical appliance industry, bicycle industry, clock industry and metal hardware industry in China fall into durable consumer goods industry.

1.1Food Industry

Food industry is the largest industry in the world, acting as an important criterion to measure economic development and quality of people’s life in a country. At present, the global food industry is developing toward the direction featuring multi-sectors, multi-gradations, deep level, low energy consumption, full utilization, high efficiency and sustainableness. Thanks to technical innovation, food processing industries in developed countries have seen continuous development. In 2005, the annual sales volume of global food processing industry stood at about US $4,000 billion. The US accounted for 25%, while Europe 20%, Japan 15% and China only 6%.

The food industry in developed countries has a noticeable feature of high processing rate and high added value. In developed countries, raw materials for food generally have a processing rate of over 70%, some even reaching up to 92%. The rate is only 20-30% in China and other developing countries. Developed countries have a full range of food processing machineries, over 3,000 kinds. Processing equipment of their food industry has a high level of mechanization and automatization. The outputs are very considerable. New principles, technologies, techniques and materials have been constantly adopted, which has promoted the development of food machinery industry and helped achieved reliable and stable product quality as well as a high level in standardization, generalization and serialization.

The major dairy producers include the US, Russia, India, Germany, France, Brazil, Ukraine and Britain. The major exporters include German, Netherlands, France, New Zealand, Belgium, Ireland, Denmark, Britain and Austria. As for quick frozen products and frozen products, the products from Europe account for nearly all the global market shares. Excluding ice cream products, quick frozen products have maintained a growth rate of 17% in turnover for nearly 10 years.

As for meat and meat products, major exporters include Australia, EU, the US, New Zealand, Argentina, Canada, Brazil, Ukraine and India, while major importer include the US, Japan, Russia, the EU, Canada, South Korea, Brazil and Egypt. As for pork products, pork processing industry account for 21% of the total turnover of the processing industry of member countries of the European Economic Community. The major producers include German, France, Italy and Brazil.

World’s most renowned food enterprises:

Nestle was founded in 1867, headquartered in Vevey, Switzerland. It is the world’s largest food manufacturer. The company was ranked 57 among the Fortune 500 Companies by the Fortune magazine for its operating revenue of US $89.63 billion and profit of US $8.874 billion. It owns over 500 plants across the world with nearly 280,000 employees. Its business coverage has expanded into drinks, seasonings, pet food, dairy products, chocolate, ice cream and drugs.

Pepsico., Inc. is one of the world’s largest food and beverage companies. It has 185,000 employees in over 200 countries and regions across the world. Its sales revenue stood at US $39.474 billion in 2007. Pepsico ranked 184 among the Fortune 500 Companies in 2008.

Coca-Cola Co. is the world’s largest beverage manufacturer, also the leader in soft drink market. It ranked 275 among the Fortune 500 Companies in 2008.

Danone, headquartered in Paris, is a multinational food and beverage companies with diversified businesses. It ranked 423 among the Fortune 500 Companies in 2008. Its operating revenue stood at US $20.128 billion in 2007. The company has about 76,000 employees across the globe. Danone is the world’s largest dairy manufacturer, the world’s second largest bottled-water producer, the world’s second largest and Europe’s largest baby food manufacturer, and the world’s third largest manufacturer of health and nutrition products.

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