East Shoe Moves Westward -- Inevitable Trend Of Chinese Shoe Enterprises In The Future

Shoemaking industry is a typical labor-intensive industry. It transfers from developed countries to developing countries, and shifts from high labor cost areas to low labor cost areas. In the 60-70 century of twentieth Century, the world's shoe making centers moved to Italy, Spain, and in 80s to the relatively low manufacturing costs in Japan, Taiwan, Korea and other places. By 90s, they moved to coastal areas such as Guangdong and Wenzhou, where production costs were lower. Since 2004, along with the rapid development of the southeast coastal economy and the increasing cost of labor, the domestic shoe industry has shifted from the southeast coast to the West. Since the beginning of 2007, with the sustained and rapid development of China's economy and the rising cost of labor, the world footwear industry has begun to shift to countries with lower labour costs, such as Vietnam, India, Pakistan and Thailand. At present, with the rising cost of labor and raw materials in coastal areas, the manufacturing base of Chinese shoe enterprises will also migrate to Western China.

At the beginning of 2008, the shoe industry entered the shuffle year. With the appreciation of RMB, the rise of labor costs, the increase of raw material prices and the adjustment of export and export tax, a large number of shoe companies are losing money or even going bankrupt. The footsteps of the East shoe moved westward.

Two star group set up the Chengdu shoe company in 2001. In 2006, the new double star R & D center was located in the North District of Chongqing economic development zone. AOKANG group also invested in the construction of shoe industrial park in Western China in May 2003, greatly reducing the cost of shoes production. AOKANG points out that the cost of producing shoes in the west can be reduced by 20% compared with that in coastal areas. Up to now, there are more than 1300 shoe enterprises in Bishan, Chongqing, which undertake the eastern transfer, and about 60000000 pairs of leather shoes each year, with an annual output value of 4 billion 570 million yuan. It is estimated that in the year 3~5, the annual output will exceed 100 million pairs, and the annual output value will exceed 10 billion yuan. In addition, Brazil shoe giant magnon has launched a project of investing 160 million yuan to build 8 international standard shoemaking lines in Bishan, Chongqing in June 3, 2008. From this we can see that the westward movement of East shoes is the general trend. {page_break}

Why do shoe companies migrate to Western China?

First of all, the western region has sufficient energy, cheap labor and preferential policies and measures. At the same time, the western region has provided more than half of the country's cattle, sheep, pigs and other raw leather resources. For a long time these pellets have been transported to the eastern coastal areas for long-distance leather processing, and then exported to the domestic leather shoes manufacturers. This "leather in the west, shoes in the East" situation does not meet the requirements of the rational allocation of resources in the market economy, for Eastern and Western shoe-making enterprises, to varying degrees increased costs, "East shoes West shift" can effectively reduce production costs.

Secondly, the "East shoes westward shift" will also improve product quality and enterprise production efficiency. There are a large number of skilled shoemaking craftsmen in the western region to complete the necessary manual operation in leather shoes production. Leather shoes in Chongqing have been produced for over 100 years, employing over 120 thousand people, and have a large number of skilled shoemaking craftsmen with relatively low cost. Many small and medium sized shoemaking enterprises in the western region, mostly private enterprises, have flexible mechanisms and rich experience in the local market. It is a good partner for the large shoemaking enterprises in the eastern region to enter the western region and implement complementary advantages.

In addition, "moving east shoes to the west" is conducive to the development of the western market. According to the insiders, the historical opportunity for the development of the western region and the establishment of the economic corridor of Western Chongqing will drive the development of the western rural economy, and the income of farmers will increase year by year. The sales of leather shoes in the western market, especially in the western rural market, will also increase rapidly. First of all, shoe-making enterprises entering the West will seize the opportunity to seize market share.

"East shoe westward shift" does not mean that the eastern part no longer produces and sells leather shoes. The current "East shoe westward shift" is mainly the shift of the production capacity of the middle and low grade leather shoes. The eastern region will become the processing base and sales center of high-grade leather shoes in the future, and the western region will become the production base of low and Medium leather shoes in a certain period.