Pearl River Delta Footwear Enterprises Cut Sharply But Export Performance Growth

In the 1~5 months this year, there were 2428 footwear export enterprises in the Pearl River Delta region, a sharp decrease of 2331 over the same period last year. Nearly half of the PRD footwear export enterprises have no export performance this year. The latest statistics from Guangzhou Customs show this information, but the first financial daily survey found that the export volume of shoes enterprises that survived for the same period increased by 16.5% over the same period last year.

Li Peng, Secretary General of the Asia Footwear Association, said in an interview with the first Financial Daily yesterday that the shoe industry will soon enter the off-season order, and Guangdong will continue to shut down some shoe companies.

After more than 20 years of accumulation, Guangdong has become a global footwear trade center and shoe making material supply center. Currently, there are tens of thousands of footwear manufacturers and more than 2 million employees.

Footwear has become one of Guangdong's most important industries and export commodities. In 2001, Guangdong exported footwear to US $4 billion 340 million, and it increased to 9 billion 200 million US dollars in 2007, with an average annual growth rate of 13.3%.

However, according to Guangzhou customs statistics, in 2008 1~5 months, Guangdong footwear production most concentrated in the Pearl River Delta region exported 940 million pairs of shoes, a sharp decrease of 25.7% over the same period last year.

Guangzhou customs analysts pointed out that since 2007, under the multiple attack of factors such as the export tax rebate reduction and processing trade policy adjustment, the continuous appreciation of RMB, the rapid rise in labor costs and the increasingly fierce competition in the footwear industry, a number of "insufficient internal force" shoe factories began to move beyond the PRD region or withdraw from the shoemaking industry, and nearly half of the PRD footwear export enterprises have no export performance this year.

The analysts also pointed out that although the PRD footwear export enterprises reduced by nearly half, the export performance has not been greatly affected, and the export value of 1~5 months is 3 billion 460 million US dollars, still achieving a 8% increase.

Among them, there were 4 enterprises with an export volume exceeding 100 million US dollars, an increase of 2 over the same period last year, and 62 enterprises with an export volume exceeding US $10 million, an increase of 7 over the same period last year. The 1~5 export volume of these 62 enterprises was 2 billion 40 million US dollars, a substantial increase of 16.5%, and the export volume accounted for 59% of the total export volume of the Pearl River Delta in the same period.

Li Peng said that large shoe factories have more advantages in terms of capital, customers and risk pfer, and small shoe factories can also respond flexibly. For example, small shoe factories mainly based on Baiyun District in Guangzhou, with the help of small orders from the west side of the Guangzhou Railway Station, such as the domestic market of shoes city, Russia's border trade, Middle East and Africa, can survive.

During the shuffle process, the victims were mainly 800~3000 shoe factories and shoe processing plants.

Wu Zhenchang, chairman of the Guangzhou Panyu Chuangxin Shoes Co., Ltd., which exports more than 100 million US dollars a year, said in an interview with the newspaper that the cost of labor in the Pearl River Delta has risen rapidly, as well as the American subprime mortgage crisis and global inflation affecting consumption. Under the circumstance of depression, some enterprises around the world are pferring or changing, and the enterprise is still slightly better because of the processing of big brands such as Nike, but it is also under pressure.

"The situation facing the export of labour intensive industries in the Pearl River Delta region has aroused concern. The Ministry of Commerce and other departments have investigated many times this year to encourage shoe manufacturers to pfer to the mainland or Guangdong's East and West wings." Wu Zhenchang said, "but at present, oil prices are rising. In the era of high oil prices, we must consider pportation costs. The risks are increasing. Our export oriented enterprises are unlikely to pfer to the mainland. The main reason is that we have to go through the cold winter in the internal adjustment of enterprises, and begin to test the domestic market of water.

At the same time, we hope that the government will grasp the macro adjustment efforts and gradually promote industrial pformation and upgrading.

Wu Zhenchang also said that raising prices to overseas buyers had a certain limit and could not pass all the rising costs. At present, the overall export price of the PRD increased rapidly, mainly due to the rapid increase in the cost of the PRD, and the elimination of the overall average export price.

According to the statistics of Guangzhou customs, the average export price of footwear exports in the Pearl River Delta region has increased considerably this year.

1~5 month PRD footwear export Fisher Price Index was 1.4501 (1 in the same period last year), that is, the price of footwear exports in the Pearl River Delta 1~5 month increased by 45% over the same period last year. The export price of leather shoes increased by 31.7%; the export price of shoes made of rubber or plastic shoes increased by 69.3%; the price of export of shoes made of rubber or plastic substrates increased by 48.6%.