Pearl River Delta Shoe Enterprises Upgrade And Enhance Competitiveness

On the economic map of China, the PRD has been leading the way for many years, contributing to the "Shunde mode", "South China Sea model", "Zhongshan mode" and "Dongguan mode", creating the "Shenzhen speed" and "Zhuhai phenomenon".

In the global manufacturing industry list, the PRD has the reputation of "world factory".

However, at present, the "giant" and "world factory" are standing at the crossroads of the fission. The labor cost increases and the enterprises move outward from time to time. After 30 years of rapid development, where does the PRD go?

Concerned about the Pearl River Delta region, the Pearl River Delta region has always been at the forefront of China's economic development.

China is the largest toy exporter in the world, accounting for about 70% of the global toy trade, of which 68.2% are toys from the Pearl River Delta. The Pearl River Delta has developed footwear industry and shoes products are exported to the world. 1 of the world's 3 people are from the Pearl River Delta.

Recently, however, the Pearl River Delta region has encountered bottlenecks in economic development.

In 2008, many foreign media carried out a lot of reports on the relocation of enterprises in the Pearl River Delta region.

"Asian Times" January 25 Daily reported that the Pearl River Delta set off "Domino closed chain".

The article quoted a forecast from a Taiwan investment company that the labour cost in the Pearl River Delta region will increase by 8% in 2008, and many Taiwanese enterprises have been pferred to inland provinces or Vietnam. It is estimated that hundreds of small factories invested by Taiwan in Dongguan and Shenzhen will go bankrupt this year.

In the fourth quarter of 2007, thousands of factories and related enterprises in Guangdong were closed or moved out.

In February 11th, the Asian Times reported again that the Pearl River Delta is facing the challenge of industrial upgrading.

The article says that as a witness to Guangdong's economic take-off, the footwear industry is now suffering from the "baptism" of the new round of industrial upgrading.

The introduction of the new labor law and other policies has further worsened the business environment of the footwear industry. Many enterprises have to close or go out.

Around ten thousand factories are expected to close down this year before and after the lunar new year.

The article said that the cost of unearthed land and the rise of labor wages, the official policy of replacing the low value-added manufacturing industry with the enterprises with low pollution and high labor quality can be described as the last straw to crush the shoe industry.

South Korea's Chosun Ilbo also reported in February 16th that labor costs and low price inflation have been hit by foreign companies in Guangdong.

The article says that in the southern Pearl River Delta region known as the "world factory", there is a large scale intra enterprise pfer or factory relocation.

"Over the past 2 to 3 months, more than 1000 shoe making enterprises have gone bankrupt, and more than 10000 enterprises in Hongkong are facing bankruptcy crisis. More and more small and medium-sized enterprises have planned to move out."

Southeast Asian countries challenge the Pearl River Delta in addition to the rising labor costs in the Pearl River Delta region, and the emergence of emerging economies such as Southeast Asia and Mekong River basin also impact the development of the Pan Pearl River Delta region.

According to statistics from the Asian Footwear Association, about 25% of the shoe companies moved out of the Pearl River Delta have moved to Vietnam, Thailand, India, Malaysia and other places in Southeast Asia.

In recent years, more and more foreign enterprises have invested in Vietnam.

The Vietnamese government has also taken many measures to attract foreign investment so that the benefits of foreign investment in Vietnam can be guaranteed.

Simplifying investment procedures and improving the investment environment, from the central government to the local governments, they carefully listen to the opinions of foreign enterprises and act as the basis for adjusting the government, offering preferential tax policies to new enterprises.

South Korea's Chosun Ilbo reported on February 15th that Vietnam's booming consumer market has also become an important reason why multinationals favor investing in Vietnam.

In addition to Vietnam, other enterprises in the Mekong River Basin, such as Thailand, Burma and Laos, will not be severely restricted by quotas when they are exporting to developed countries such as Europe and the United States.

In fact, in order to support these backward countries, developed countries also encourage imports of these countries' products.

Therefore, many factories that build factories in the Mekong River Basin, such as textile and shoemaking enterprises, are making use of these preferential policies to export products to developed countries.

This objectively promoted the relocation of foreign enterprises in the Pearl River Delta region.

The development confidence of the Pearl River Delta region is still well-known in Dongguan for its footwear industry in the Pearl River Delta region.

Faced with the recent relocation of shoe industry, Chen Zhongqiu, mayor of Houjie Town, Dongguan, is not worried.

He said: "at present, the low value-added manufacturing process is being pferred, while core technology R & D and procurement trade remain in Dongguan.

What the government is doing now is to build an Asian shoe base base in Houjie Town, which is both a new product development center, an information exchange center, a trade order center and a pricing center.

The base is to provide high-end services for the whole industry. It does not necessarily increase a workshop or factory, but increase brand and increase core competitiveness.

In fact, while a large number of small and medium-sized enterprises have been withdrawn, some of the dominant shoemaking enterprises have not left the PRD.

Li Xiangyang, a fellow of the Institute of world economics and politics of the Academy of Social Sciences, also believes that there will be no "Domino closed down chain" in the Pearl River Delta because it is only a small number of small and medium enterprises with low added value or enterprises that are not well regulated.

In contrast, some of the old regulated enterprises, high-tech enterprises and new service oriented foreign enterprises have not changed their way of operation.

Charles, President of the world's largest female footwear trader and American Liwei shoes and footwear company, said they did not plan to leave Dongguan. "Because no local industry chain is as perfect as Dongguan, the workers here have been doing well for over 10 years, and are still the best places in the world."

Although the Mekong River Basin countries pose a challenge to the PRD, their own shortcomings still limit the space for rising gas.

If Vietnam lacks infrastructure and lacks professional human resources, many foreign companies complain that they can not find good foreign language workers.

In addition, in 2007, Vietnam's consumer price index increased by more than 10%, and the minimum wage was bound to rise, and the advantage of its cheap labor could be reduced.

Similar problems exist in Thailand.

The minimum wage in Thailand is currently around 200 baht (about 45 yuan per day).

But in practice, most of the workers' wages are far higher than this level. A nanny needs about 1000 baht a day.

In terms of labor efficiency, the 5 Mekong River countries are lower than China.

Many foreign enterprises in Thailand reflect that Thailand workers are working very slowly, "one Chinese worker is the top two or three Thailand workers".

There are Chinese and Laos in the Chinese engineering team who repaired the road in Laos.

Chinese workers always work hard, while Lao workers do not work at rest and do not pay overtime.

The pition pain is inevitable at present. The Pearl River Delta is experiencing a big change: in a certain period of pition, the production capacity of high consumption, high pollution and backward technology is phased out, and the capital and technology investment is increased actively, and the industrial upgrading is promoted, and the processing trade is pformed mainly from the processing export labor intensive products to capital intensive and high value-added products.

This is also the inevitable trend of economic development -- industrial upgrading.

At present, the cities in the Pearl River Delta have identified the basic positioning, Shenzhen develops high technology, Guangzhou focuses on the development of large equipment manufacturing industry, Huizhou is an energy and petrochemical base, and Dongguan has developed into a modern service industry, such as advanced manufacturing and industrial headquarters economy, logistics, exhibition and R & D centers.

It is understood that when the peak of Foshan reached more than 10 thousand ceramic production lines, there were only 1000 left after relocation and closure, and about 100 more will be forced to shut down this year.

The industrial upgrading of the Pearl River Delta is suffering from unavoidable pains.

Dongguan has been growing rapidly for 20 consecutive years, reaching a new low last year.

GDP growth is expected to be lower in Dongguan this year, only 14%.

But upgrading requires space.

Li Xinchun, a professor at the school of management at Zhongshan University, said: "the inferior enterprises will make room for bigger and stronger advanced industries, which will undoubtedly attract more attractive international companies including the world's top 500.

Although some short-term interests will be lost, the competitiveness of the Pearl River Delta will not be weakened in the medium to long term, but will continue to grow.

Li Xiangyang also said that the pfer of some low-end manufacturing industries in the Pearl River Delta is an inevitable development mode for China to promote its own industrial upgrading.

Although the local economic interests will be damaged in the process, it is in line with the long-term economic interests of the country.