The Cost Of Footwear Industry In Guangdong Has Risen Rapidly By &Nbsp; Inflation Is The Main Cause.

　 　 Shoe industry cost Rapid rise

February 22nd hearing with China Economics In recent 10 years, the production cost of China's footwear industry has been on the rise. The rising pressure mainly comes from the raw materials such as leather, glue, outsole and buckles. Meanwhile, factory rent and stall rents are also rising. For example, the rental of factory buildings, where the shoe industry is concentrated in the vicinity of Guangzhou, it is easy to find the 8 yuan / flat rice workshop in 2005, and now there is no 15 yuan / square meter workshop for rent. Another example is the stall rent of the West shoe city of Guangzhou Railway Station, which was slightly reduced in 2008 due to the financial crisis. Now it has not only fully recovered, but also surpassed the level before the financial crisis in 2008. Under the pressure of the rent increase in the shoe city, some companies began to move their offices and exhibition halls in the West shoe city to other places, and even more, even many years of stalls were abandoned. They have moved to a commercial city with offices, exhibitions and warehouses. The location of these commercial cities is somewhat more than that of the shoe city, but the transportation is convenient, the rent is cheap, and the cost pressure of enterprises can be reduced. Since 2005, these commercial cities have springing up everywhere in Guangzhou Baiyun District.

Since the beginning of this year, the price of leather materials in Guangdong has increased by 2 yuan to 3 yuan / foot, much larger than the 5 cents in the past. Before 2008, a good quality calf price was quoted at 23.5 yuan / foot, and this year it increased to 26 yuan / foot. This price increase is not driven by the strong growth of market demand, but the result of the interaction of raw material and labor cost. In 2010, the footwear industry revival, but the export growth of shoes is still slow. The EU trade barriers to trade in shoes are still in the US. The export friction in the United States continues, and the Russian market is recovering slowly. Japan and South Korea are unable to accept new quotes for shoes. The main battlefield of footwear sales is domestic market.

　 Factories and traders are unable to digest the rising costs internally.

Since 2008, as the cost of raw materials, rents and labor has risen, the cost of footwear enterprises has risen, but the shoe factories are far from the increase of production costs when they quote customers. It is not that shoe factories do not want to quote high prices, but buyers do not accept them. In order to survive, from raw material suppliers to shoe factories, from shoe factories to traders, the way they take is to give up part of their profits to digest the rising costs. During the period from 2005 to 2008, when shoe factories and materials traders talked about the price of a shoe material, they would fluctuate up to 5 cents, for example, the cost of a pair of shoes increased by 1 yuan. Then the shoe factory and the material manufacturer each bear half the cost. This is what they call "internal digestion", and the price of the shoe to the purchaser eventually remains the original price or only a slight increase.

But this year, the grim situation has made shoe factories and raw materials suppliers unable to digest the cost of rising internally. At the end of October, I saw in a factory in Guangzhou that the factory received the fax of the price rise of the bottoms, glue factories, and leather traders at the same time, while the shoe factory technicians were in short supply. In order to win the workers, the factory had to pay high salaries to dig and leave workers, and the cost of labor increased sharply. The labor cost of each pair of shoes had already accounted for over 20%, far higher than that of two or three years ago. 12%.

Guangzhou sum shoes mainly accepts orders from Japan. "Japan's demand for single work is relatively clear, especially in terms of detail. We feel the pressure now. First, the labor cost is rising rapidly, and the two is the overall rise in raw material prices." Said Mr. Meng, director of the shoe industry.

Shoe factories can no longer afford to increase the cost of raw materials and labor. In order to survive, factories can only raise the factory price of finished products, and retail prices naturally rise. In the terminal market, the brand of the new major women's shoes, such as BELLE, she, Qian Baidu, Conley and so on, the price of short boots is almost no less than 700 yuan.

　 Inflation has become an important inducement.

When shoe factories complain that the raw materials have gone up too much, the answer from raw materials suppliers is that the cost of production has increased, and that part of the price of materials has not fallen into their pockets. This is indeed the case. Now prices are generally rising, and enterprises are obviously feeling the pressure of inflation. {page_break}

January 10th news: Zhou Wangjun, deputy director of the price department of the NDRC, interpreted "understanding the situation, coping properly, and maintaining a basically stable price level". Zhou Wangjun pointed out that four reasons led to this year's price rise too fast, and the primary reason is the excessive issuance of currency. China's financial rescue operation began in 2008, and the state adopted a proactive fiscal policy and a loose monetary policy, making the broad money market in the market now more than 60 trillion, while the current GDP has only 30 trillion. The market money volume is much higher than that of the social wealth. Then, the direct consequence is that the money in the hands of the people is becoming more and more worthless, and the commodity prices are rising rapidly.

Now, the economic situation facing the government is more complicated. If we suddenly tighten liquidity, though we can control inflation to a certain extent, we are worried that the economy will decline again. Therefore, the government is very prudent in dealing with monetary policy. The governor of the people's Bank of China Zhou Xiaochuan said he will continue to maintain a sound fiscal and monetary policy. Therefore, as long as inflation is not eliminated, commodity prices will be hard to come down. At the same time, labor shortage and national salary and welfare policies have made the cost of labor and labor in shoe factories higher and higher. Especially in Guangdong, where the economy is developed and the cost of living is higher, the rise in labor costs has become irreversible. This is fatal for the labor-intensive shoe industry.

　 Footwear prices rising trend

Guangdong's real leather shoes are well recognized and loved by domestic consumers, so wholesalers and traders from many regions are coming to Guangdong to buy goods. They are looking forward to lowering the price of shoes. The shoe industry is a fully market-oriented industry with fierce competition and its price is determined by the market. In recent years, the production cost of footwear has been on the rise stage. In order to maintain its customers, shoe factories, wholesalers and traders can only digest the cost of rising and abandon part of profits when raw materials and labor prices continue to rise.

But this year, the cost of shoe making industry has risen far more than everyone can afford. The price of leather, glue, outsole, metal buckle and other shoe materials has risen in price. At the same time, recruitment has become more and more difficult, and the wages of workers have gone up and up again. What worries us most is that even so, factories still can not recruit workers, which exacerbates the difficulties of factory survival.

The price of shoes has gone up, but the profits of the manufacturers have not gone up. Where has the profits gone? Needless to say, a discerning eye can see that profits have been engulfed by various costs such as labor, raw materials, logistics and so on.

The state can restrain inflation through policy adjustment, but the wages of workers can not be reduced. With the introduction of various wage and welfare policies and the fact that the state is trying to eliminate the increasing gap between the rich and the poor, it is an inevitable trend that people's incomes will rise in the future. In recent years, both the ex factory price and the retail price of shoes have been rising, which is the response of this trend, but high inflation has increased the growth.