Three Puzzles In China'S Shoe Industry

"To migrate with time, to go to the world," ("Xunzi non")

The trend of industry is often a natural instinct of wealth. Industrial clusters always migrate towards the direction of wealth accumulation, just like the "migration" of the footwear industry.

The footwear industry is known as the "migratory bird industry". During the past 50 years of continuous migration, the footwear industry in the world has formed a universal rule -- pferring to the countries and regions with low labor costs.

According to Zhang Shuhua, director of China Leather Association, the world shoe center was in Italy in the 60s of last century, moved to Japan and South Korea in 70s; pferred to Taiwan, China in 80s; pferred to Dongguan and Wenzhou in 90s; today, shoe industry center is gradually moving to China's central and Western regions and Southeast Asia.

As early as 8 years ago, the largest women's shoes in Houjie Town, Dongguan, Guangdong.

In September 28, 2003, the shoe star AOKANG Group invested 1 billion yuan in Chongqing and Bishan to build the foundation of the "western shoes capital" which covers an area of 2600 mu.

Three years later, a modern industrial park took off and solved the employment of over 5000 people in the poverty-stricken areas of the West.

In May 17, 2006, the plan covers an area of 5000 mu, with a total investment of 1 billion yuan, an annual output of more than 30 million pairs of leather shoes, and 20 thousand jobs. The Tongliang Red Dragonfly Footwear Company, which achieves 1 billion 500 million yuan of annual output value in Chongqing, Tongliang County, Jinlong Industrial Park, has held a phase of completion and commissioning. This marks the beginning of the two stage of the western footwear industry base and the relocation of the Red Dragonfly Group.

In August 2008, Taiwan, Foshan, Guangdong.

In November 2008, the world's largest footwear manufacturer, Baocheng international group of Taiwan (hereinafter referred to as Baocheng International), leased factory buildings in Shannan Industrial Park, Huangshi. After a year, it moved to the new factory area of Yangxin North Industrial Zone, which invested 100 million US dollars, and planned to build 28 production lines, with 12 million pairs of shoes per year.

In September 2009, Baocheng international invested 30 million US dollars to start construction of Jiangxi Yutai shoe industry Co., Ltd. in Poyang, Jiangxi. It is reported that the project will become the largest shoe manufacturing base in Jiangxi, and will achieve an annual output of 12 million pairs of sports shoes, with an annual export volume of 70 million US dollars.

In July 2010, Baocheng International Group (Xiangfan) Industrial Park project signing ceremony was held. Baocheng group will invest 100 million US dollars in Xiangfan, specializing in the production of "Lining" brand sporting goods.

Confusion in shoe industry

Migration is an instinctive act of life. It is a regular, relatively fixed route and long distance movement. On the way to migration, the life body will be faced with many unexpected adventures, or it will be killed in the middle of the journey, or it will still be in danger of four volts at the end of its search. At present, China's footwear industry has also experienced three puzzles.

Perplexity 1: when is the pain of logistics?

In the wake of the financial turmoil, Huajian, a forerunner of the footwear industry, plans to move again. One of the important reasons is the lack of supporting manufacturers and lagging logistics.

Most of the raw materials needed for the production of Huajian Jiangxi base need to be shipped from Dongguan.

When the expressway from Ganzhou to Dongguan was not opened, there was a shortage of 8 kilograms of material, and the whole production line might be shut down. The boss could only send a car to Dongguan for the night to purchase and send it to the factory.

After the completion of the expressway, Jiangxi and Guangdong still need to open ten trucks each day: pporting raw materials while pporting the shoes to Shenzhen port.

Like Huajian, many domestic shoe companies want to purchase raw materials nearby, but shoe manufacturers are also worried. The shoe factories after relocation are too scattered. Suppliers need time and manpower and material resources for every place they go. Unlike shoe factories, Wenzhou shoe manufacturers can supply several factories at the same time.

Conversely, the procurement of shoes by moving enterprises is also more difficult, often because of the lack of supporting manufacturers and pain, virtually increased procurement costs.

Some shoemaking enterprises need to move away from a long distance. If there are too many stocks, the styles of shoes will change and a lot of raw materials will be scrapped.

Perplexity two: reduced to "sacrificing cage and changing birds"?

The southeast coastal area is the cradle made in China and the distributing center of China's footwear industry. In the new century, with the appreciation of the land, the increase of raw materials and the increase of labor costs, the Guangdong provincial Party committee and provincial government took the lead in making a series of decision making departments to promote the pformation and upgrading of the economic "cage changing birds". The shoe enterprises in Dongguan and other places began to scale and move inland. At the same time, Zhejiang and other places began to deploy "cage cage for birds", and the shoe industry moved into a trend at a time.

Migratory migration is a kind of active behavior on the surface, but it is actually forced by life.

The outward appearance of shoe industry is an independent act, but in fact it is also a compulsion.

When the policy of "cage changing birds" was introduced, the land, resources and energy of the coastal areas tended to be tense, which led to the increase of production costs, and shoes enterprises had to choose to move inland. Otherwise, who would be willing to toss?

After the move, some shoe companies sighed: "after their" dedication ", they have no value of" use ", but are abandoned by the" developed "area. Will the relocation of the land now follow the footsteps of the developed areas and will also discard the footwear industry after they are used?

I did not expect the shoe industry's worry to be confirmed by the news from the western shoes.

It is reported that Bishan, Chongqing, aiming at IT business opportunities, wants to "cage for birds", and overdue undeveloped area of 1000 acres of AOKANG three phase project was frozen.

Subsequently, the shoe Office of Bishan county was merged into the County Commission, and was relegated to the Department. The special leading group of Bishan Microelectronics Industrial Park was established.

At present, Bishan has issued a new investment policy: the industrial park must conduct investment according to the unified standard, and the enterprises with less than 100 thousand yuan per mu tax revenue each year must not be allowed to enter the park.

According to local shoe companies, "no shoe company in Bishan can achieve this standard".

After all, the shoe industry is a traditional manufacturing industry with labor-intensive and low added value, and the main way out is foundry and export.

At that time, the Bishan government hoped that AOKANG would take 2600 mu of land as its position and make use of AOKANG's influence in the industry to drive Bishan's small workshops to upgrade their industries and sell their shoes to the European and American markets.

However, the freight cost of raw materials and finished products in the West has pushed up the production cost of the shoe industry. This is very clear to Wang Zhentao. So he put the production line of the domestic brand "red fire bird" in Bishan, and the other coastal shoe enterprises are not stupid, but trying to move inland.

At this point, the grand goal of Bishan's introduction of AOKANG has been lost. In Bishan, shoe manufacturers in the whole county dropped from 2000 to 1000 in 5 years.

Under such circumstances, Bishan did not hesitate to choose to abandon the footwear industry, "cage for birds" to seek high value-added, high-tech IT industry.

At present, the Taiwan whale electronics has settled in Bishan, and about 50 microelectronics enterprises have reached an agreement with intent to invest in Bishan.

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Puzzle three: is migration a permanent solution?

Some experts said that the shoe industry moved because the coastal areas after 20 years of rapid development, land, resources, energy sources of tension, the footwear industry has no room for development, coupled with the high cost of labor in coastal areas, rising production costs, so that the original "razor" shoe industry can not maintain their livelihood, the footwear industry has to instinctively move.

Internal cause is the fundamental reason for the change and development of things. External causes are only conditions.

If we look at the shoe industry in a dialectical way, we will find that the shoe industry is moved because of the low added value of the shoe industry, labor-intensive and severe homogenization. As long as the traditional manufacturing nature of the footwear industry remains unchanged, it is impossible to move to any place and will encounter the same difficulties as the coastal industry.

Huajian, who moved inland, had a good understanding of this.

Before moving inland, the manpower wages in Ganzhou are much cheaper than Dongguan. However, due to the opening of Jiangxi Guangdong Expressway, the labor force difference has been rapidly reduced. At present, Ganzhou's labor cost basically has no comparative advantage.

The low price of land and hydropower is Ganzhou's advantage, but the water and electricity charges in Ganzhou can only offset pportation costs.

According to the relevant estimates, the production of a pair of shoes enterprises in the west can save 20% of the cost compared with the eastern coast.

However, the export logistics cost of western enterprises accounts for 20% of the total cost of products, and the advantage of moving inland gradually disappears.

Earlier, as the production cost of Pearl River Delta and Yangtze River Delta increased in recent years, Baocheng international had to plan to move inland.

In order to make use of the advantages of manpower, tax system and public facilities in the Midwest, Baocheng international chose to "run away" again and again.

Baocheng chose Yangxin because Yangxin county is the main exporter of shoemaker in China, with more than 100 thousand.

When the project was being built, the Yangxin county government issued a circular on "conscientiously doing a good job in recruiting workers in Baojia shoe factory of Baocheng shoes". According to the plan, Baojia should recruit the first batch of workers before March 1, 2010: 10300 people, the result is due, and the number of people recruited is far from the plan.

This also makes Baocheng's policymakers feel puzzled. Why do we build factories in famous working counties and do not recruit migrant workers like those along the coast?

Practice has proved that it is impossible to move the shoe industry in the middle of the market. There may also be labor shortage in the Midwest where the labor force is abundant, and it can not be put on the preferential policies of some government's investment promotion. The embarrassment of the shoe industry in the developed areas may also appear in any place. The relocation of shoe enterprises can only be a first-aid measure for solving the problem. There are still many uncertainties.

Sun Zhongshan, the father of the country, once sighed, "the world tide is vast, and those who shun it are prosperous, and those who turn against them are dead.

Perhaps the shoe industry is a trend of the times, but in the process of the large-scale relocation of the footwear industry in China, we also hear another voice, that is, the song of the poet's Wolf -- "the confusion of internal migration".

Needless to say, to change the cage for birds.

Don't say this is just a migration.

Is it that the cost is rising and manpower is scarce?

We are going to leave quietly.

Moving inland is not an instinct of wealth.

Is it necessary to move inland or develop?