Foreign Brands, "Down South Asia", The Spring Of Chinese Processing Has Passed.

Compared with the London Olympic souvenirs, 65% are made in China.

The news that China's headquarters will close the Suzhou production base in October (its only factory in China only) is even more noticeable.

Adidas official statement said that after the closure of the Suzhou plant, Adidas still has more than 300 foundries in China to provide products.

It is understood that 50% of Adidas's products are made in China.

"Low labor costs, low rental costs and low raw material costs" are the words of Chinese manufacturing which seem to be away from China with the departure of Adidas and other companies.

At present, Nike, Adidas and other high-end products will be distributed in China, and gradually pfer the middle and low end orders to Indonesia, Vietnam and other Southeast Asian countries. Does this trend of "southeast flight" mean that the spring of Chinese processing has passed?

Following the confirmation by Adidas, the world's famous sports brand, that Chinese manufacturers have begun to split capacity after closing the only direct factory in China.

The Chinese clothing supplier has moved some shirts orders to Bangladesh.

The first time the electricity supplier tried the overseas foundry.

And not long ago, influenced by the European debt crisis, many manufacturing enterprises in Europe and the United States moved back to their homeland to save themselves, and the amount of foreign investment in China was once reduced.

All kinds of costs have risen sharply, and the trade environment is deteriorating. "Made in China" has faced unprecedented challenges.

What is the way out of the "made in China" that once made the Chinese proud?

Foreign brand "Nanyang"

Recently, Adidas announced that it would close its only own factory in China on the grounds of "reconsidering the strategy of integrating global resources".

In the future, all the orders of Adidas in China will be completed by more than 300 foundries in China.

Adidas's closure of its own factories is not without precedent. As early as 2009, the US sports brand

The company closed its shoes and clothing factory in Taicang, Jiangsu, and moved to Vietnam and other countries.

Accordingly, it is speculated that Adidas will also migrate factories to Southeast Asian countries with lower labor costs.

Adidas's public financial report shows that Adidas's global sales revenue increased by 14% to 3 billion 824 million euros in the first quarter of this year, but gross profit fell by 0.7%.

However, sales in Adidas China increased by 26%.

In view of this, Adidas has announced that it will open 2500 new stores in China before 2015 to expand its coverage of the Chinese market.

Why did Adidas shut down its own factories in China? "In fact, the share of the products produced by this factory is very low, and Adidas's closure will have cost considerations."

Economist Tang Xiao told reporters that the move brought more speculation about the future direction of Adidas and the next plan.

In addition to Adidas, Nike, Clarks, K-Swiss and other footwear enterprises have added production lines in Vietnam and Indonesia.

Moreover, more than 10 multinational companies involving household appliances, electronics, building materials, toys, food and other industries have shut down or pferred Chinese factories.

The latest findings released by Hongkong Federation of industry also support the current trend of manufacturing relocation.

In the survey of the current situation and prospects of the Hong Kong funded enterprises in the Pearl River Delta, 15% of the respondents said they would move to the provinces and the central and western regions. About 10% of the enterprises said they would migrate to Southeast Asia or elsewhere.

It is worth noting that in recent years, many Southeast Asian countries have continuously increased the intensity of foreign investment, and preferential policies for foreign capital in terms of tariff reduction and repatriation of import equipment are not less than China's.

Chinese enterprises can not support

Foreign brands have moved their manufacturing factories in China, and Chinese manufacturing enterprises have begun to expand their capacity to overseas under the pressure of cost and trade environment.

As the largest commercial clothing brand in China, van customer's product has been produced by the foundry mode. Its foundry factories are mainly located in the Yangtze River Delta and the Pearl River Delta region.

However, the reporters found that some shirts sold by fan recently sold the words "made in Bangladesh" on some shirts.

As a matter of fact, as early as last winter, fans had placed 130 thousand shirts under the Bangladesh factory.

This year, there are 100 thousand high-profile shirts and 50 thousand casual pants.

According to Hu Haishen, assistant president of fan Ke Cheng, try to work in Bangladesh on the one hand is to develop shirts supplier resources, on the other hand, it also takes into account the lower cost of overseas foundry.

Today, Bangladesh has a more prominent advantage in shirt manufacturing resources, and has formed the most concentrated and largest shirt manufacturing base in Asia.

At present, Bangladesh can also provide some simple excipients, such as thread and buttons, but the main raw materials such as fabrics are still basically imported from China.

"The cycle of OEM in Bangladesh takes 4 months to 6 months."

Hu Haishen said, the domestic supplier delivery cycle requirements in about 45 days, so that the order of Bangladesh OEM can only be limited to some basic requirements for low cycle requirements.

Now, the layout of China's manufacturing industry is changing quietly. For example, a factory with tens of thousands of employees in the South will move 50% of its capacity to Vietnam before 2015, and about 20% will go to India or Sri Lanka, leaving less than 30% of China.

It is understood that China's textile export enterprises have been hit by the price advantage of Southeast Asian products.

In the face of price shocks in Southeast Asia, the owners of textile enterprises proposed to build factories in Southeast Asia to reverse the price disadvantage.

In June this year, 13 Chinese textile companies including the famous Tianhong Textile Group Co., Ltd. sent representatives to Indonesia to find suitable factories.

A textile company official told reporters that the domestic low end export products orders have been reduced by 1/3 this year, and many orders have been snatched away by Southeast Asian companies.

Hou, who has done many years of toy export business in Guangzhou, told reporters that at present, domestic processing costs are getting higher and higher, and domestic and international economy is stagnant. In the future, the pressure of Chinese processing enterprises will be bigger and bigger, and shunt capacity may be a way out.

{page_break}

Artificial dominance is disappearing.

Because many processing industries are labor-intensive, low labor costs are particularly important.

According to the reporter, since 2010, the wages of workers in various provinces of China have increased by more than 20%.

Many companies began to look for cheaper labor force in pursuit of maximum profits, and Southeast Asia has become the first choice for many enterprises.

Herbert Heiner, chief executive of Adidas global, has said that Adidas hopes to partially withdraw from China and move to cheaper labor areas as the wage standard set by the Chinese government has been gradually rising.

According to the reporter, salaries of workers in Southeast Asian countries such as Bangladesh can basically be controlled at around 80 US dollars per month, while the basic wage of Chinese workers is between 2500 yuan and 3000 yuan per month.

Tianya forum, entitled "eighteen years of private enterprise, can't sustain this year", describes a post that a family runs a mechanical processing plant. In order to retain workers, it increased the average wage of workers by 10% in 2006. In the spring of 2007, the factory directly hired a bus to Anhui and Jiangsu Yancheng to pick up workers and return to work.

At that time, the average wage of the workers in the factory was 1200 yuan, and the second line workers were 800 yuan. After a full 20 working days in a month, they paid 100 yuan per day for overtime pay.

In addition, there are four quarters and three meals a day.

In 2010, the wages of front-line workers rose to 2000 yuan, and no one wanted to stay.

By the end of 2010, the wages of front-line workers had risen to 5000 yuan.

Looking back at the cost of manpower in Southeast Asia and other countries, according to the statistics of Japan's Trade Promotion Council, Vietnam's production cost is 15% to 30% lower than that of China under the same conditions.

In 2011, the average monthly salary of factory workers in Vietnam was about $136, and Indonesia was about $129.

"Influenced by factors such as labor costs, raw materials, land and other costs, prices and appreciation of the renminbi, many large international companies believe that the profits they earn in China are becoming less and less, so the pfer of production bases is more and more."

Jin Yuan, lawyer of Shenzhen law firm Xu Teli, told reporters.

It takes time for China to be surpassed.

The latest report released by KPMG, an internationally renowned accounting firm, said that the rising cost of "made in China" forced multinational companies to find new investment locations in other parts of Asia.

Due to regional integration and favourable terms of trade, many Southeast Asian countries are becoming more mature and will benefit from this recent trend.

However, the report believes that although clothing and footwear production is shifting to the whole Asia Pacific region, the "hard" products such as consumer electronics and furniture still rely mainly on "made in China".

China's Ministry of commerce data show that between January and June this year, 11705 new foreign-invested enterprises were established in the non-financial sector of the country, and the actual use of foreign capital was 59 billion 100 million US dollars, down 13.1% and 3% respectively from the same period last year.

Among them, the change of attracting foreign investment in manufacturing industry is especially noteworthy.

In the first half of this year, China's manufacturing industry actually used foreign capital of 27 billion 20 million US dollars, down 5.1% from the same period last year, accounting for 45.7% of the total amount of the same period.

By contrast, foreign investment attracted by manufacturing in Southeast Asia is increasing rapidly.

"But that does not mean that manufacturing has moved from China to Southeast Asia. It is hard to tell whether these investments have been withdrawn from China."

Xu Changtai, director of Asian Research at Standard Chartered Bank, said that some multinational companies are seeking the possibility of diversification, mainly considering the rising operating costs in China and avoiding the risk of trade protectionism measures made by some countries to "made in China".

Tang Xiao also told reporters: "for Southeast Asian foundry enterprises, workers' proficiency in work and familiarity with the industrial chain are still short board.

Due to the fact that the manufacturing and substitute industries in Southeast Asia started not long ago and the maturity is far less than that in China, there is a clear gap in the understanding of the industry.

In addition, there are imperfections in the industrial chain in Southeast Asia and other countries, which also increases the risk of OEM.

"The competitiveness of China's manufacturing industry's production and export is not only derived from low cost, but also rooted in the scope economic benefits brought by the complete industrial system, the scale benefits brought by the huge market, excellent and continuously improved human resources, excellent and constantly improving infrastructure, strong macroeconomic stability, and continuous improvement of public service efficiency. These factors are the long-term advantages that other countries will never have."

Mei Xinyu, a researcher at the Ministry of Commerce, said to reporters.