The "World Factory" Is Facing The Survival Of The Fittest.

The business was pferred to the mainland in Dongguan, the manufacturing center of Guangdong Province, where 7000 workers were in the heyday.

Today, the company's factory area is like an abandoned city. Only dozens of bored security guards, technicians and technicians are supervising the demolition of the assembly line.

In public communities surrounded by abandoned workers' dormitories, hairdresser shops, table tennis rooms and clinic rooms are deserted.

The auction notice says that anyone who intends to purchase 5 cars from the factory will be invited to participate in the auction.

The company was auctioned off in December last year.

Pang Wei visited the factory area with reporters.

He said, "the Taiwan boss of the company is already more than 70 years old, and has no intention of doing it.

He has returned to Taiwan. "

Pang Wei is an entrepreneur in Guangzhou, near Dongguan. He invested 10 million yuan to buy the fixed equipment of Chang Deng company, and was ready to resell it to other manufacturers.

In the factory, technicians supervise the sewing machine and other machines from upstairs to the first floor for potential buyers to inspect.

What is currently being staged is a competition for survival of the fittest, which is mainly affected by relatively small factories with relatively low technology content.

Other companies are moving some of the less valued and less sensitive businesses to new factories in the mainland provinces where production costs are cheaper.

Mainly due to cost pressures, according to Zhang Huarong, chairman of Huajian group, one of China's largest shoemaking enterprises and the Asian Footwear Association, the basic monthly salary of workers in the industry has doubled since 2006, reaching 200 US dollars.

Through Pang Wei's customers, people can have a general understanding of the industrial migration caused by rising costs.

Chi Shiqing, one of Pang Wei's clients, runs a small shoe factory with 300 workers in Shaoguan, at the junction of northern Guangdong and Hunan.

Chi Shiqing said: "it is not easy to recruit workers in Shaoguan.

No one wants to move there, so I have to recruit locals. "

He said, "now Shaoguan's salary is not much lower than that of Dongguan."

The wages of his factory workers are 1200 yuan per month.

Chi Shiqing's factory only supplied to the domestic market, which made him feel a little relieved.

This means that he does not face another important cost pressure - the appreciation of the renminbi.

Since the middle of 2005, the exchange rate of RMB against the US dollar has risen by about 15%.

Another reason for the closure of some factories in Guangdong in recent years is that China began to implement the new labour contract law last month.

By closing the factory before January 1st, the employer can avoid paying a higher amount of compensation in accordance with the new labor law.

The Asian footwear Federation said that last year's cost increase has forced 15% of the shoe factories in an important industrial center in southern China to close or move.

It will not threaten the overall pattern. The closure of many factories is mainly confined to small businesses, which are squeezed out by more efficient and larger competitors.

The collapse of these factories seems to pose no threat to China's overall manufacturing strength.

Despite rising costs, Guangdong still provides many of the benefits that many shoemaker and other exporters are unwilling to give up, the most important of which is the world-class infrastructure and skilled workers in the region.

Last year, the region's exports increased by 22.3% to 369 billion 300 million US dollars, accounting for 30% of the total exports of the country.

In China, however, rising costs may mean that the world's factory will soon become an important exporter of inflation.

At the end of 2005, the so-called "China price" began to rise.

The price of China's exports has gone down for several years.

Zhang said that the average price of footwear manufactured by his company this year will increase by 1 US dollars.

Last year, his company exported more than 7 million pairs of shoes.

Due to the rise in wages and other costs, Zhang's enterprises have abandoned the plan to increase the number of labour in Dongguan by 1 times to 40 thousand.

It will expand to a production base in its inland Jiangxi province.

The center of the global footwear industry has been migrating from the Taiwan and South Korea in the late 80s to the southern part of China in the 90s of last century.

Zhang's estimate of the number of shoe-making enterprises in Dongguan shows that the shoe industry's center may be shifting to inland provinces in China and other countries in Southeast Asia.

Zhang said, "30% 40% of Dongguan's shoe factories will be pferred inland, but this process will be relatively slow."

He added that the process may take 5 years.