Adidas Factory Relocation "Made In China" Is Imperative

Last week, Adidas China headquarters confirmed that the plant in Huawei, Suzhou, will be closed within the year.

A written reply from Adidas said the move was a "strategic consideration of reintegrating global resources".

This is followed by the relocation of another sporting goods giant after Nike closed in 2009, the only shoe factory in Taicang, China.

The latest figures released by the Ministry of Commerce show that in the first 6 months of this year, the actual use of foreign capital was 59 billion 100 million US dollars, down 3% from the same period last year.

Among them, 2444 new foreign-invested enterprises were set up in the month of June, down 16.3% compared with the same period last year, and the actual amount of foreign investment was $12 billion, down 6.9% from the same period last year.

Adidas global CEO Herbert Heiner was previously accepted.

According to media interviews, Adidas hopes to partially withdraw from China and move to cheaper labor areas.

Laos, Kampuchea, Vietnam and other Southeast Asian countries are regarded by Adidas as a better market.

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When the news came out with Nike, Clarks, K-Swiss, Bakers and other international shoe giants have set up production lines in Vietnam and Indonesia.

Data from customs showed that the competitiveness of industries such as Vietnam and Indonesia increased significantly since 2010.

The market share of some traditional labor-intensive export products in Europe, Japan and the United States is being squeezed by some countries in South Asia and Southeast Asia.

Some emerging economies are successively showing "good news".

The world investment report released in 2012 at the joint China World Trade Center conference pointed out that in 2011, foreign direct investment inflows to the association of Southeast Asian nations reached 117 billion US dollars, an increase of 26%, which is much higher than that of 9% in East Asia.

China's strength is still obvious.

Although Adidas did not specify why the factory was closed, just a few days before it announced that it would close the factory, it responded to the London Olympic Organizing Committee's accusation of its sweatshop in Kampuchea. Its factory workers in Burma earned a monthly salary of 130 yuan (about 828 yuan), while its Suzhou factory had a monthly salary of not less than 3000 yuan.

The earlier message was that Herbert Heiner complained to the media that the wage standards set by the Chinese government were getting too high.

Statistics show that the minimum wage in many cities in China increased by 20% to 30% in 2011, and growth is the trend in the future.

Liu Jintang, deputy director of the Bureau of small and medium sized enterprises in Dongguan, Guangdong, told the media at the twentieth China clothing and fashion fair, which was just held, that in Dongguan alone, the cost of manpower increased by 30%.

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In this regard, Asia

Li Peng, the Secretary General of the association, analyzed to the media that if Adidas reduced the production line on a large scale, it would have great influence on the foundry and supporting facilities.

Under the influence of the integrity of the product process, many generations of factories are difficult to live independently. In this case, if the factory wants to rely on the order of Adidas and other enterprises to survive, it must follow the Southeast Asia.

Reporters learned that, in the more than 300 factories for Adidas OEM, Taiwan Yuyuan group accounted for most of the share of the order. There are many factories in mainland China, specially for Adidas and other OEM. But this enterprise has begun large-scale pfer to Southeast Asia in recent years, and factories in mainland China have begun to shift from coastal areas to low cost labor areas in the mainland.

Does this mean that the status of China's "world factory" is at stake?

"In the near future, China's" world factory "status is irreplaceable and hard to shake.

Liu Jiejiao, a researcher at the Institute of industrial economics of the Academy of Social Sciences, told Nanfang Daily that although China's cost advantage is not so obvious as that of Vietnam and other emerging developing countries, our cost advantage is still very obvious compared with that of developed countries.

Moreover, the quality of the labor force is relatively high in China, and the factory building environment is relatively good and the policy is stable.

Relatively speaking, it is more conducive to enterprise development.

Facts have proved that Adidas has not abandoned the Chinese manufacturing market even though it has closed its factories.

Adidas China has told the media that ADI will cooperate with more than 300 domestic foundries to streamline the manufacturing business, rather than completely withdraw from the Chinese market.

Gao Jiali, managing director of Adidas Greater China, has stated that in the next five years, Adidas's annual sales in China will grow at a rate of 15% to 20%.

What's more, Adidas's location in Tianjin's northern storage center will be expected to further expand its coverage of the Chinese market.

It is possible to move out of high value added industries by labour intensive enterprises.

Even so, the closure of Adidas in Huawei has always been a factory or has caused widespread discussion in the industry.

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"For a multinational company, its investment is influenced by many factors, which may be the adjustment of its internal strategy.

Occasional capital flows are normal.

Liu Jiejiao said that the relocation of individual enterprises does not presage the beginning of a new round of relocation. It may be the adjustment of the economic structure, whether for the enterprise itself or the local government.

Liu added that the relocation of labor-intensive industries in China is not necessarily a bad thing.

It is also possible to introduce advanced equipment manufacturing, service industries and other products with high added value locally.

"When I went to Suzhou last month to investigate, I was told by the relevant parties in Suzhou that 4 billion 500 million enterprises with such high pollution, high labor intensity, quality and consumption exceeding output should go out."

Liu Baocheng, Dean of the Sino French International Management School of University of International Business and Economics, told Nanfang Daily that some of China's developed industrial cities such as Suzhou already have the advantages of choosing their own businesses. They can selectively accept foreign-funded enterprises, or even choose to "go out" of industries that are not in line with local development strategies.

A new round of global manufacturing competition and pfer has been launched. Foxconn President Terry Gou has made a statement that China should continue to base itself on the "world factory" and pform Chinese manufacturing into China's "intelligence".

Improving productivity, quality and product quality stability is the main driving force for enterprises to turn to automation, especially high technology.

With the advent of the post industrial era, turning the turning point of "wisdom" into industrial upgrading and entering a more high-end manufacturing industry has become inevitable.

How should China attract the entry of "intelligent" manufacturing enterprises? Liu Baocheng suggests that one is to establish patent databases at home and abroad, and to update them in time, and even to pick up patents that have expired or will expire abroad; two, to carry out technological alliances with international organizations, to share and invest in technology to avoid cultural conflicts; three, to improve and break the technology at home and abroad, and to turn the existing technology into productive forces.