Chinese Shoe Enterprises Are Trapped In The "Domino Effect" &Nbsp; The Road Is Confused.

July 18th news phenomenon 1: as China's production costs rise, coupled with the recent financial tsunami, many international famous brands have reduced production and procurement in China, moved to Southeast Asia and other regions, and even moved factories back to their home country.

World-famous Sports

In 2005, Nike's foundry moved to Vietnam for a crucial year.

Nike's world's largest two generation factories, Taiwan Baocheng and Fengtai, have heard the news of Vietnam's expansion.

Since then, Fengtai has put many Chinese orders down to Vietnam, and has expanded its production line of 4 processing plants in Vietnam and invested about 16000000 US dollars to build new factories in Vietnam.

In the same period, Baocheng group also plans to increase 15 production lines in Vietnam.

2006, China's Nike

The move is not just for Nike, such as another internationally renowned sports brand Adidas, which is beyond the expectations of the brand due to the rising cost of Chinese manufacturing and tightening of policies. Therefore, Adidas is considering phasing out production or procurement in China and pferring production lines to Vietnam, Kampuchea, Indonesia and India in phases, and has sent people to Southeast Asia and other countries for inspection.

German Steiff Co, known for its teddy bears, announced in July that it would withdraw all its production lines in China and move the factory back to Germany.

It is reported that WAL-MART also plans to pfer part of the small plant business to Vietnam.

Phenomenon two: in the face of the shift of "military power" such as Nike, the Brown shoe industry, the largest footwear trading company in the world, has chosen to "stay put".

Because Vietnamese workers are always on strike, companies of this kind are still willing to place their orders in China's foundries.

Based on the above phenomenon, the industry, industry experts and the whole manufacturing industry are concerned and discussed: is China's world factory status under threat? Is this a good thing or a bad thing? Is China entering the "Post China made" pformation? Is there any reason why the producers withdraw from China? Are there any opportunities in the crisis? Can China become the next world R & D center after the world factory? Who is going to fill the gap after Nike has gone?

One of the experts' Views: there are opportunities from the foundry industry to the R & D crisis.

At present, Nike's "made in China" is lower than "made in Vietnam". It reflects that after the rapid growth of China in the past 30 years, "made in China" is facing the opportunity to pform from cost advantage to other advantages.

It shows that the cost of labor in China is rising.

Because the state puts forward that "Chinese society should pay more attention to people's livelihood, and it is very important to improve the welfare benefits of employment."

Although international competition is becoming more and more intense, China's market is still very large, and China will not be eliminated immediately.

Nike officially announced its new financial report. Sales in mainland China broke through 2 billion US dollars, and sales in China accounted for more than 1/10 of global sales, up 18% over the same period last year.

China is still the main consumer area of Nike in the future, so it will not easily isolate itself from China's consumption.

Therefore, the change of Nike's OEM data in a certain year does not mean that 36% of China's manufacturing share will fall to 5% or even 10%, just like Japan, Korea and Taiwan in the past.

China's economy is going to change its growth pattern. It needs to shift from extensive style to connotative growth in the past. Connotative growth is bound to focus on R & D, especially in the manufacturing sector along the southeast coast. In other words, China's manufacturing should be developed from the bottom of the smile curve to the two ends, one of which is R & D.

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Over the years, multinational companies have set up R & D companies in China and increased investment in R & D.

In addition, every year, millions of science and engineering graduates from universities across the country provide a steady stream of R & D power for the engineering manufacturing industry. This also shows the competitiveness of China's technology and R & D teams in the future.

Therefore, the future manufacturing industry will develop to the high end on the one hand, and increase investment in research and development on the other hand.

Two of the experts' Views: the "Domino effect" causes the manufacturing industry to shrink.

If the big brands of international brands really moved to Southeast Asia, what would be the situation? Fiscal experts point out that the first is overcapacity.

For example, the production equipment of the shoe industry has already completed the use cycle, which is equivalent to the previous investment is cleared, and even people need to deal with these industrial wastes.

Second, the Domino domino chain effect, which has spread from one industry to another, has affected the whole manufacturing ecosystem, and because of credit relationship and so on, it will indirectly impact the financial system. The chain effect has caused serious economic setbacks in the mainland coastal industrial area.

At present, as the labor-intensive footwear industry of Dongguan generation, production costs are soaring rapidly, it is very difficult to undertake production tasks.

The enterprises in this area will send orders for high-end shoes to Wenzhou, Fujian or some factories in the mainland, where not only technology, raw materials, labor costs are relatively low, but some low-end shoes orders are sent to Southeast Asia and other countries, such as Vietnam, Indonesia, or even farther Ethiopia, because the cost is lower.

In a year or two, when the cost of the domestic industry is further rising, the order of the high-end shoes will also be gradually outflowing after the technology and raw materials and accessories of the above countries are combined.

People will start to worry.

First, the shoemaking industry, which is a labor intensive leading industry, will be affected by the related clothing industry and luggage industry. This will lead to the shrinking of the entire manufacturing industry, the deterioration of the business environment in the coastal areas, the sharp decline in exports and the decline of GDP. If this happens, it is indeed very worrying.

Reporter's notes

Nike made from Japan in 1964 to "made in Korea" and "made in Taiwan" in 70s of last century, and then to "made in China".

After entering twenty-first Century, "Vietnam made" gradually revealed its production advantages.

From the development history of Nike OEM, it is easy to see that the movement of production pfer from high cost areas to low cost areas will never stop in China.

The pfer of Nike foundries is not absolutely representative, but it indicates a potential trend - the advent of post manufacturing in China.

As early as five or six years ago, this sign has been revealed.

In 2008, 43 manufacturing enterprises of the Hongkong group completed their inspection of Vietnam, aiming to explore the feasibility of pferring the production line to Vietnam to ease the cost pressure in the production line of the Pearl River Delta.

Cheap labor is not the only indicator of the world's largest choice of foundry areas. Rather, it should be production factors, including labor prices, land rents, local policies and so on. In addition, in recent years, the appreciation of the renminbi has continued. The pfer of such labor-intensive enterprises to Vietnam is not an unexpected thing, but the speed of pfer is too fast.

From reform and opening up to the present, we have gone through the stage of attracting simple processing industry by only cheap labor force, and we can not stay at this stage. How can China's manufacturing industry pform and upgrade?

China will gradually move away from the "world factory" characterized by primary labor. Therefore, we must constantly adjust our role and adjust our manufacturing culture. In the past, entrepreneurs should always regard the profits of their enterprises as the first target, because enterprises only do overseas foundry.

Once domestic sales are done, such a cultural core will undergo radical changes. The profits of entrepreneurs should be redistributed, so that the whole industry chain can make money and benefit workers.

Only when the masses are rich can the consumption of local brands be radically stimulated, so that they can be more conducive to the realization of "China's creation".