Multiple Pressures Push The Pformation Of Export Shoe Enterprises (1)

The Wallace family lives in Monroe, Louisiana.

On the official website of the more than 50 thousand people's city, it is announced that their greatest tourist attraction is that visitors can enjoy a cup of coffee and a croissant at sunrise, that is to say, there is nothing here.

But for local residents, WAL-MART has everything.

Mrs. Wallace often went to the supermarket with WAL-MART, Family Dollar Store and Brooke Hill (Brookshire 's).

Monroe has more family dollar stores than WAL-MART, but she prefers to buy WAL-MART's weekly food, because "there are more people there, fruits, vegetables and meat are always fresh, and their prices are the cheapest in the city".

"If you don't have WAL-MART, you don't need it at all."

Like many people living in small towns in the United States, she put this phrase on the lips.

The WAL-MART Super Center on Louisville Avenue, Monroe is one of the 79 super centers of Luis Anna S.

There are about 142 thousand products in the WAL-MART Super Center, and there are about 500000 products on WAL-MART website that allow customers to choose at will and distribute them to customers free of charge to their nearest super centers for free.

Whether it's a small town or a big city, WAL-MART keeps making "made in China" - most of which do not even have the name of the production plant. The product has only one bar code, which represents "I belong to WAL-MART" - to the US family. This is not because of changing the slogan from "everyday parity" to "saving money and living better".

Like its sensitive customers, this supermarket knows where to buy the cheapest things.

WAL-MART has direct orders with more than 5000 factories in more than 2000 suppliers worldwide, including about 4000 factories in China.

Even after the financial crisis, the floating range of the figure is less than 20%.

Trading companies like WAL-MART in China have been making "made in China" the most important source of their price competitive advantages and profits for many years.

As of November 2009, China's share in the US import market reached 23%, according to CIC's research department.

So, the day of the Wallace family began with the coffee machine made in China, and it ended in the quilt cover made in China. It was filled with more things from China: clothes, shoes, hair dryer, MP3, decorative jewelry, photo frames, telephone, greeting cards...

But now their lives may be faced with variables - the cheapest goods may no longer be Made in China.

In June 19, 2010, under the pressure of heavy appreciation, China announced that it would enhance the elasticity of RMB exchange rate, which is the re exchange rate reform of RMB after China's floating exchange rate system in July 21, 2005.

This exchange rate reform worries people that the renminbi will probably appreciate slightly, and the export of some low profit labor intensive industries in China will face a sharp decline or even collapse.

Among them, clothing and footwear exports will probably be the most seriously affected industries.

In 2009, China's share of the clothing and footwear market in the United States was 46%.

According to the estimation of CICC's research department, the industry with higher export dependence and higher domestic cost, such as textile and garment manufacturing, has a domestic rate of over 80%, which is obviously higher than that of other industries.

If the appreciation of RMB is 5%, the export cost of US dollar will rise by 4%.

"In Dongguan, the order of enterprises can be achieved in August and September, and many small businesses are not too brave to take orders."

Wen Haibin, manager of the world shoe industry (Asia) headquarters base in Dongguan, can still remember the scene of the collapse of Dongguan shoe factory when the financial crisis came. "The most worrying thing for manufacturing factories is to have emergencies. Once they appear, they will lose all their profits in the first half of the year."

At 7:30 on June 2nd, in the Dongguan Huabao shoe shop production workshop, some workers in different colors were still doing the last process on the production line.

At this time, most of the workers had left the workshop, and the usual busy floors were quiet.

As one of the top workshops of the world's top women shoes, Huabao shoes will give their workers a holiday every Wednesday night, which makes the 7 - day work cycle look less long.

Wang Jianfei, the Guizhou people, as the leader of the three workshop of the shoe factory, is leading several workers to "replenish the goods". "When the production line is damaged, people need replenishment."

Wang Jianfei has been in the factory for 4 years, and his workshop is probably the largest number of factories in the factory.

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"To build a pair of boots, according to about 10 yuan per piece fee, 30 people's team average, each person can get more than 2000 yuan per month."

Wang Jianfei said that skilled workers can get more.

In these workers, it is easy to hear accents from Hunan and Hubei. Gao Jiang Lei, a Hunan native, has already been competent.

"Before and after the Spring Festival, there are 50 yuan to 90 yuan reward for introducing workers to work in the countryside."

For them, the better news is that in May, the notice on adjusting the minimum wage standard for workers and staff in Guangdong province came into effect, and the minimum wage of workers was raised to 920 yuan per month.

But for Zhang Huarong, President of Huabao shoe company Huajian group, this is no small pressure.

According to the average wage of 1800 yuan per worker per worker, the cost of labor will increase by about 17%. Taking 300 factories as an example, enterprises should pay 90 thousand yuan a month and 1 million 80 thousand yuan a year.

The annual export volume of Huabao shoe factory is about 91 million 260 thousand dollars.

"The factory's electricity, material costs, maintenance of machinery costs, factory rents are all essential."

Zhang Huarong said there are countless bills, including pportation, telephone, office, communication, development, interest, travel and business taxes.

All this will be counted in the order.

A pair of ordinary women's shoes exported to Warburg footwear industry converted into US dollars. From 2006 to 2008, raw materials increased from 10.05 US dollars to US $10.85, and labor cost rose from $2.23 to US $3.3. Hydropower and pportation cost increased from 0.18 US dollars to 0.23 US dollars. Although the comprehensive cost of office consumables decreased by 0.32 US dollars, the export unit price rose from 15 US dollars to 16.2 US dollars, and the gross profit of a pair of shoes dropped from 1.1 US dollars to 0.7 dollars.

The continued appreciation of the renminbi, which began in 2005, has reduced gross profit by 0.29 US dollars, and the state has reduced the export tax rebates for footwear products by 0.3 US dollars. Finally, the pre tax profits earned by enterprises dropped from US $1.2 in 2006 to US $0.21 in the first half of 2008.

"Slightly smaller business profits may be less than 5%."

Zhang Huarong, who has made shoes for 14 years, is very clear about the present situation of Chinese foundry shoe factories.

His Warburg footwear industry accounted for nearly 95% of the total, and the highest profit was less than 10%.

So is the socks industry.

Ningbo Tonghui international trade company is mainly engaged in the export trade of socks. In recent years, although the cost has increased, the price of socks has changed little. In 2000, 50% of the profits can be achieved, and now it can be kept at 5%.

At the moment, Gui Mingjun, the general manager, is most impressed by the rise in labor costs: "now the main force of the workers is 90. They have different labor concepts with the older generation. For example, our factory now offers free accommodation, and the hostel has high-power air conditioners, with a monthly salary of more than 4000 yuan, but it still doesn't attract people."

Even so, large orders are still the guarantee for factories to maintain stable profits for enterprises.

"Americans can spend seven or eight pairs of women in a year, and Europeans can spend five or six pairs, but there are no more than two pairs in China."

Zhang Huarong said.

Brown footwear is one of the largest footwear retailers in the United States. It has many brands such as Naturalizer. Its wholly owned subsidiary, Li Wei trade, is next door to Warburg shoe factory and is also one of Warburg's partners.

Among the top 50 internationally renowned brands in the world, 15 women's shoes are handed over to Warburg shoe factory.

In fact, although the recent minimum wage adjustment has put some pressure on Zhang Huarong, China's manufacturing industry has only 3% of its salary.

The US Bureau of Labor Statistics (BLS) found that manufacturing wages in Norway were 2.8 times that of the US in 2007.

In 10 countries in Canada, Australia and 12 Western European countries surveyed, manufacturing wages are higher than those in the United States - the salaries of these major export countries and regions are much higher than those of China.

In Zhang Huarong's shoe factories, labor and research and development costs account for only 15% of the total cost. The largest share of the cost is 55% of material costs and 20% to 25% of all taxes and fees.

From the point of view of logistics, export products only need to pport products to the port, and the chamber of Commerce will do the rest.

However, the domestic product takes the pportation route of Railways and highways. Taking Guangzhou to Beijing as an example, if the toll is charged at 0.5 yuan per kilometre, the cost of the expressway will be at least over 1000 yuan.