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    Domestic Footwear Industry Is Facing New Challenges &Nbsp, Innovation And Development Breakthrough

    2011/7/26 11:18:00 48

    Footwear Export Economy

    As one of the important industries of economic development, shoemaking industry has made great contributions to China's import and export earning and increasing employment.

    Compared with the developed shoemaking countries, although China is a big shoemaking country, it is not a powerful shoemaking power.

    In view of this, under the background of this competitive era, we are facing new opportunities and challenges.


    Vietnam: no fear, low level pcendence


    Pursuing a light asset model.

    Nike

    Without its own factories, its products come from the foundries, and the geographical distribution of Nike's foundries has changed dramatically: Vietnam has become the largest source of Nike footwear products.

    In recent years, Vietnam is attracting manufacturers of shoes, clothing and computer chips with preferential terms such as tax exemption, cheap land and cheaper labor.

    The average wage of Vietnamese workers is only about half of that of China's coastal manufacturing centers.

    The attraction of Vietnam is so great that even China.

    enterprise

    They began to move to Vietnam.


    About 1 out of every 6 pairs of Nike sneakers come from Tai Fung.

    In 2010, China's foundries accounted for 23% of shipments and 51% of Vietnam's share.

    Taifeng will focus on the huge growth opportunities in the mainland's domestic demand market, and Vietnam's share of the foundries is expected to reach over 55% of the company's capacity in the next few years.

    "The rise in labor costs and the appreciation of the renminbi in recent years in the mainland have indeed increased the difficulty of operation, which is based on the high standard payment that has been regulated by labor laws for a long time.

    staff

    The increase in wages and related benefits has been gradually reflected in the cost of previous years.


    Similar changes have taken place in Yuyuan group, another important foundry company of Nike company. Compared with fiscal year 2003, the production line of the group in 2010 fiscal year in mainland China and Vietnam was 40.4% and 53.8% respectively.

    Yuyuan pointed out that along with the improvement of living standards in the Pearl River Delta region, and with the minimum wage stipulated by the government, the cost of labour in the mainland should rise, thus continuing to develop production bases in Vietnam.

    Although Vietnam has become the largest production base of Nike shoes, it is only Nike's OEM enterprises that pfer capacity to cheaper Vietnam, but have nothing to do with "Vietnam made" itself.


    In the view of manufacturing practitioners, the position of "made in China" in the world market for more than 10 years is changing.

    However, industry operators emphasize that "made in Vietnam" will not replace "made in China".

    For Vietnam's manufacturing, the best result is only a supplement to "made in China". Many overseas enterprises are also considering or have moved their research center to China.

    Chinese enterprises have gone from imitation to local brands, and the gap with international brands such as Nike is shrinking. Chinese manufacturing enterprises have gone beyond the stage of foundry and imitation, and are moving towards the stage of creating brands.


    Nike shoe part of the foundry business to Vietnam is very normal, and the impact on domestic employment is also limited.

    In the field of sports shoes, Chinese enterprises have gone beyond the subprime stage of small profit subsistence, and have successfully moved to the stage of independent brands. From this perspective, Vietnam's replacement of China as the largest foundry base for Nike shoes is not good news, but it is also not bad news.


    Japan: avoid repeating its mistakes


    The earliest factory of Nike was located in Japan. With the increase of labor cost in Japan and the appreciation of the yen, the production base moved to Korea and Taiwan, China.

    Later, the cost of Korea and Taiwan came up, and Nike began to shift its production base to Philippines, Thailand, Malaysia and Hongkong of China. At the same time, it looked into the future long-term production base, and chose China after comparing China and India.

    In 1981, Nike began to produce sports shoes in China.

    In the next 30 years, China quickly became the largest producer of Nike sports shoes until Vietnam was over Vietnam in 2010.

    {page_break}


     

    In order to control the cost of human resources, Nike has been relocating its main production base in the past 30 years.

    Japan was also part of the world factory of Nike and other large overseas enterprises, but it was abandoned because of the high wages of workers.

    China's human resources prices are rising, leading to more and more international manufacturers moving their factories to cheaper Southeast Asian countries.


    The prosperity of OEM trade and the prosperity of GDP due to the low wages and environmental costs of laborers are not real national wealth and economic prosperity, but a "impoverished growth". This "sweatshop" model is not sustainable.


    What Chinese manufacturers need to do is stick to industrial upgrading and strive to accelerate the production of high value-added products.

    At the same time, overseas enterprises are increasing investment in research and research in China, building new research centers in China, or moving R & D centers to China, where high-tech capital is entering China.


    "The general production of manufacturing is moving out of China, which is an inevitable labor pains in the process of China's industrial upgrading."

    A professor at Nanjing University's business school said this.

    He believes that in the process of pformation, China should step by step, slow down the pformation process and prepare for high-tech competition, or else it will repeat the mistakes of Japan. That is, the industrial pformation is too hasty. After entering the high-tech industry stage, the cost of human resources is too high, and the advantages are lost.


    Us: threat of manufacturing backflow


    Recently, a factory in Georgia has exported chopsticks to China, which has stimulated people's understanding of the return of US manufacturing industry: whether it is high-end or low-end, China will face the challenge of the competitiveness of the manufacturing industry in the United States.


    The first quarter report of the US Department of Commerce shows that US manufacturing industry has seen a decline in foreign investment and an upward trend in tax profits. The US "re industrialization" strategy is in force, and the US real economy is showing signs of revitalization, and the US manufacturing reflow trend will continue to strengthen.


    The actual cost of labor in China is rising at an average annual rate of about 15%, which is a very high speed.

    China's inflation has risen by more than 6%, while the United States is about 3.5%.

    If inflation remains at 2.5%, assuming that the price of labor in China is 15% higher than that of Americans, then the "cheap" cost of China will disappear completely before 2020.

    If the pport cost of high p continents is included, the power of reflux will be more sufficient.

    The manufacturing industry in the United States is mainly exported to the United States.

    The high pport cost brought by high oil prices is a considerable expense.


    Another is the pformation of capital labor.

    Take Master Lock as an example, its production line in China is not the fastest production line. Because China's labor force is very cheap, it can combine the low capital density and low technology level with China's cheap labor force to achieve the best economic arrangement.

    Now, Master Lock is back to the United States, because the production line in the US's production base is the most advanced, and its efficiency may be more than 10 times higher than that in China. This is enough to make up for the gap of 6 times the labor force price of the US labor force than that of China. It is a new economic reasonable arrangement with more capital to compensate for the labor volume and thus to improve the technical efficiency.


    The United States adjusts the global layout of US manufacturing jobs with the efficiency of new technologies and production lines, and has great destructive power to countries like China, because the US manufacturing industry's investment in China is based on the combination of "low capital and low technology plus labor volume". This combination is very fragile in the current situation, and it is also prone to major changes.

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