Thousands Of Chinese Shoe Companies Are Closing Down. Is It A Blessing Or A Curse?

The processing trade in the Pearl River Delta region is undergoing pformation pains. Recently, thousands of shoe companies have closed down in this unavoidable labor pains.

This closure is a crisis or a turning point for processing trade, causing widespread concern inside and outside the industry.

Thousands of shoe companies are closing the throes of pformation?

The Asian Footwear Association is an influential industry organization in the Pearl River Delta region. Li Peng, Secretary General of the association, said there were five thousand or six thousand shoe factories in Guangdong, and more than 1000 were closed in the past year.

The closure of footwear enterprises, including shoe factories, supporting materials factories, shoe factories and footwear traders, are mainly small and medium-sized, and there are more than a dozen Taiwanese shoe factories with thousands of people.

These closing enterprises account for 10% to 15% of the footwear industry in Guangdong Province, involving 150 thousand to 200 000 employees.

"Although the closure of thousands of enterprises, but its capacity is not as good as a leading enterprise."

Li Peng, for example, said, "Baocheng group is the largest shoemaking enterprise in the world, and there are more than ten million employees in Dongguan. Over 25% of the world's high-end sports shoes come from this group."

According to the insiders, the production capacity of Guangdong shoe factories has already been surplus, and the closure of small and medium-sized enterprises is the result of the survival of the fittest in the market, which has not much negative impact on the industry.

The position of world shoe industry in China?

However, in order to achieve industrial upgrading, the "Pearl shoes" processing trade after years of rapid growth is a heavy flight.

Copper buckle raw material copper from the beginning of 2004 per ton 20 thousand yuan a road up to the current 60 thousand yuan per ton, and product prices did not rise at the same time.

In 2002, the minimum monthly wage in Dongguan was 450 yuan, rising 50% to 690 yuan in 5 years, and the actual wage has already reached more than 1000 yuan.

Even so, there is often no employment.

Moreover, the RMB appreciation, the implementation of the labor contract law, the reduction of the export tax rebate rate, the implementation of the export margin account system and the rising land cost all make the Pearl River Delta processing trade enterprises, including shoes industry, no longer able to go back to light.

With the closure of thousands of shoe companies, a large number of enterprises have moved out, which has raised questions from many people inside and outside the industry: is China's shoe companies facing a crisis or a turning point in their pformation?

Will "Chinese shoes" change their position in the world industry?

"There is no need to be pessimistic or panic."

Li Peng and other industry insiders predict that China's status as the shoe factory in the world will not change.

This is mainly because the conditions for supporting the footwear industry have not changed. "

Expert analysis pointed out that, first of all, abundant and relatively cheap human resources and land resources have not changed.

Secondly, abundant hydropower resources, perfect infrastructure and industrial chain have not changed.

Compared with India, Vietnam and other major shoe making areas, China's hydropower costs are much lower.

In addition, the pattern of orders for Chinese footwear industry has not changed.

In the world shoe industry, there is such a saying: 80% of the world shoe orders are in the hands of Chinese, and 60% of the world's finished shoes are made by Chinese factories.

According to the reporter, at present, Guangdong's Huajian, Yuyuan, Haifeng and other large shoe making enterprises have built production bases in Jiangxi, Anhui, Jiangsu and other places, but they have not reduced the scale of production in Guangdong.

What is "made in China" to win the future?

A number of industry experts pointed out that after 2008, more low-cost and low profit starting, lack of independent brand and technical content, lack of core competitiveness of enterprises, small and medium shoe-making enterprises will accelerate bankruptcy because of the loss of cost advantage, and for most of the regulatory standards and a certain pattern of shoe-making enterprises, is the beginning of a new industry shuffle, the footwear industry will be more quickly into the track of healthy development.

"The Chinese footwear processing trade is faced with the coexistence of opportunities and challenges."

Li Peng said.

China's footwear production and export volume are ranked first in the world, and China's footwear industry is at a critical stage of development and pformation.

The crisis faced by the footwear industry in the Pearl River Delta is also the general situation of China's manufacturing industry. In the Pearl River Delta, the world's processing factories are facing difficulties not only in shoemaking enterprises, such as garment making, toy processing, electronic processing, etc.

What is "made in China" to win the future?

Shortly before the world footwear industry development forum held in Dongguan, Liang Yaowen, director of the Guangdong Provincial Department of foreign trade and economic cooperation, gave a clear answer: not only the shoe industry, but for the many processing enterprises in the Pearl River Delta, there is only one way out for the future: "only technological research and development is the way out for enterprises. No technology is always controlled by others. We must take market demand as the guide, speed up the strategic pformation with technological innovation as the driving force, and strive to improve the technological content and added value of shoes products, pform the technological advantages, and accelerate the pformation of our country from a big shoemaking power to a shoemaking power."