Resolving the "Zero-Sum" Dilemma and Saying Goodbye to "Zero-Sum" Game
Reporter: Wang Xiaowei
Account receivable is a commercial credit that can enhance the efficiency of using funds. Reasonable-scale account receivables can have a driving force for economic development. On one hand, creditors can increase production to compensate for losses caused by unpaid debts; on the other hand, debtors will also strive to produce quickly to repay their debts, which is known as "debt-producing power" in the field of economics.
However, account receivables and repayment periods will lose their effectiveness once they exceed reasonable limits. Especially for the automotive industry chain, extended payment periods are often used by mainframe manufacturers to occupy funds from relatively weak enterprises, thereby increasing their profits or reducing losses.
China has a comprehensive industrial structure and an obvious advantage in terms of supply chain. China's new energy vehicles can achieve over-taking through the complex and well-developed supply chain. The assembly process of a vehicle involves multiple suppliers, manufacturers, logistics companies, and sales companies, and only by maintaining close cooperation can they ensure that each stage from design to delivery is completed efficiently and accurately. However, in practice, some industry chains have their main enterprises not opening up space for development or distributing dividends to chain-based enterprises, but instead "wrapping" them.
The prevailing view among downstream entrepreneurs interviewed by the Securities Times reporter is that when payment periods are generally prolonged, the profits of real economy will be eroded, and market order will be severely disrupted, not only increasing operating costs but also weakening the motivation to innovate.
Therefore, this pattern needs to be corrected. The positive cycle of an industry chain should be that when a problem occurs in the industry chain, the main enterprises need to regulate it, such as opening up market space for development and distributing resources and benefits to chain-based enterprises, rather than using their advantageous positions to squeeze out the survival space of chain-based enterprises.
Similarly, accounts receivable from automotive suppliers are essentially "sleeping money" that needs to be channeled into the market in an orderly manner. It is worth noting that it is necessary to establish professional institutions for account registration, certification, and credit reporting to support enterprises' accounts receivable as a guarantee for re-financing or re-investment.
At a deeper level, payment periods reflect not only the concept of contracts but also commercial civility. The latter two are the two important pillars that an enterprise must build in order to become a "century-old shop".
In the context of developing new forms of production, simply pursuing cost reduction may not be the way forward for long-term development. How can we transform our supply chain management mindset, improve the "zero-sum" relationship, and explore deeper collaboration between automakers and suppliers to build a healthy and sustainable supply chain system? This is the key to high-quality development.
As economist Joseph Schumpeter once said, innovation is essentially re-combining existing resources to achieve higher efficiency. Today's automakers and suppliers may be at a critical stage of re-organizing their resources, requiring them to build more stable and sustainable supply chain relationships rather than engaging in simple "zero-sum" games.