Shoe Foundry Enterprises Are Facing New Bankruptcy Dilemma.

The cheap world factory of multinational corporations is no longer a part of China.

Under the influence of labor cost, tax burden, environmental cost, inventory pressure and Chinese brand impact, etc.

Nike, a multinational company represented by Nike, is trying to move its factory in China to more attractive areas such as Vietnam and Kampuchea in an extremely low-key way.

According to the securities times, although Adidas said it was terminating cooperation with 10 Chinese foundries in order to optimize the global procurement framework, it said it would continue to cooperate with 300 generations of factories, but the story was far from being so simple.

The fate of low-end foundry

"No orders have been made, and Nike's OEM project has moved to Huizhou, and it will not be clear if it will move to Southeast Asia."

Li Lin, a Shenzhen special industrial company, is responsible for customs declarations.

The company is a shoemaking enterprise and has been the main foundry of Nike in Shenzhen for a long time.

However, today, the factory in Longgang, Shenzhen, is different from many enterprises in the dense Industrial Park. It is in a corner, hidden in the deepest part of a long lost road. There are many factories on the road, and there are only a few scattered factories in the surrounding area of Longgang.

Nike's abandonment of grant is just the first step in its industrial chain pfer.

She is just one of the thousands of representative factories in China, and these factories will be proud of Nike and Adidas OEM. But now they have to face the fate of orders and staff turnover.

At grant Chang, several security guards were carefully examining two outgoing personnel, including searching for their belongings.

"We did Nike before, and the scale was not too small. At that time, it could be regarded as Nike's main foundries in Shenzhen."

Mr. Shen said that at that time, once more than 100 thousand of the employees were granted, the company was a well-known company in Henggang. Apart from Nike, the brand name of the other multinational companies was also the main partner of Nike.

"It's a bit miserable now, but in 2008, it was not like this. At that time, although the orders had shrunk considerably, we could still control it."

Mr. Shen said that at present, he can only receive small orders from some small brands. These small orders will not be answered before, but there is no way out now.

Otherwise, it will be closed and bankrupt.

It is understood that the Nike factory in Huizhou and the Yuyuan shoe manufacturing factory in Dongguan Gao Zhi town belong to the factory of the Taiwan Baocheng group.

A basic idea of Baocheng group's strategic adjustment is to "de SAR" the first generation of its factories, then gradually try to move to Southeast Asia.

In 2010, Yuyuan shoes had 226 footwear production lines in the mainland, 120 in Vietnam and 114 in Indonesia.

At the end of the first quarter of this year, the footwear production lines in Vietnam and Indonesia increased to 150 and 136 respectively, while the production lines in the mainland only increased 4 to 230 this year.

In September last year, Yuyuan footwear industry reached 255 in the mainland's shoe production line, and was the main foundry of Adidas in mainland China.

With the growth of Southeast Asian foundries, Vietnam's manufacturing or Indonesian manufacturing has repeatedly appeared in Adidas's mainland stores.

This recognition not only affects the Pearl River Delta now, but also deeply affects the Inland Hunan.

It is understood that the Hunan OEM Adidas's business is also on pins and needles, once Adidas announced the termination of cooperation, these enterprises or escape the fate of bankruptcy.

Companies like Shanghai, Suzhou and Hunan have also regarded Adidas, Nike and other partners as proud capital.

Although the factories of Adidas and other enterprises in China have been repeatedly labeled as "sweatshops" hats, it is undeniable that the interests of these factories are actually tied up with Adidas. The rapid development of gold in Adidas in China (1692.70, -3.30, -0.19%) for ten years is also the most comfortable period for these foundries.

However, there are only three thousand or four thousand employees left in such a thriving enterprise with 100 thousand employees.

The owner of the factory selling milk tea also said: in the past two years, the business is too difficult to make. A cup of milk tea is 1 yuan. In such a high consumption city such as Shenzhen, such a price is obviously unimaginable, and because of the sharp decrease of the staff, the 1 yuan milk tea is not good enough to sell.

Cost is not the only reason

"Comparative advantage" has always been an important reason for China to become a global factory.

After Foxconn set up a factory in Chengdu, the industry generally believed that the inland area had more comparative advantages than the coastal areas. However, the decline in the orders of Hunan's foundries and the shortage of labor Foxconn faced in Chengdu showed that the rise of human cost may not be the only important reason for the relocation of multinational enterprises.

Jiang Lin, deputy director of the Hong Kong, Macao and Pearl River Delta Research Center of Zhongshan University, said that in fact, Adidas and other foreign-funded enterprises are not worried about the current cost, but the continuing cost of rising prices.

In other words, foreign-funded enterprises have poor expectations of China's cost and economic boom.

Jiang Lin pointed out that in 2009, the domestic economy was relatively poor, but the price of crude oil, represented by crude oil, plummeted at that time, resulting in deflation in the country. Although the sales volume of products such as Adidas had been affected, the cost of manpower was relatively low.

In addition, local governments have also troubled Adidas and other enterprises in terms of tax burden.

Jiang Lin said that some areas, on the one hand, said they should reduce their burdens for enterprises, but on the other hand they would not give in in areas such as taxes, which objectively led foreign enterprises to feel confused when making decisions.

"Of course, this is not to say that the abolition of the super national treatment of foreign enterprises is not right, but it is difficult for foreign companies to see further preferential policies."

Jiang Lin also said that some foreign enterprises are actually willing to pay higher cost of employing labor force, but the new generation of labor force represented by 85 has undergone tremendous changes in the scope of employment and the mentality of choosing jobs. This is also an important reason for foreign enterprises to choose factories in foreign countries.

It is understood that the "great leap forward" of domestic foundries is also the reason why Adidas and other enterprises sprouted.

Quite a number of foundries have gone too far in terms of orders, and overcapacity is hard to avoid.

Finally, these subcontracted products have to take a discount strategy in the market competition, which has a greater negative impact on their brand image and performance, which is not difficult to see from the development track of sports brand in recent years.

Except for Nike, Adidas and so on.

Besides, mobile phones, hardware, toys, plastics and other industries also have the phenomenon of foreign capital withdrawal. These industries generally win with intensive labor force. When human costs are gradually eroding the profits of enterprises, foreign capital inevitably has to be re selected.

Industrial relocation is a non controversial issue.

Since Adidas decided to close its only private factory in Suzhou, there has been a lot of noise about the massive withdrawal of foreign capital from China.

Dongguan Dalang Town, Gao Jiao Town and other factory intensive factories also reported the frequent closure or relocation of the foundries.

However, the Propaganda Department of the Dongguan Municipal Committee did not approve of the failure of the foundry.

When interviewed by the securities times, a staff member of the propaganda department who did not want to be named merely emphasized repeatedly.

The foundries are now all right, although some of them are closed down, and some are moving to Southeast Asia, but that is just a normal industrial pfer.

The office of the Dongguan municipal government, the Dongguan foreign trade and Economic Cooperation Bureau, the Dongguan development and Reform Bureau, the government of Gao Gao and other units in the face of the interview requirements of reporters were also extremely cautious and reluctant to mention the relocation of the factory.

This is very similar to Adidas's attitude.

Adidas is extremely low-key on behalf of the factory. Although it claims to continue to cooperate with the 300 foundries in China, Adidas has refused to disclose the current orders and production status of the 300 factories. Zuo Xiaolei, chief economist of galaxy securities, said in an interview with reporters that the relocation of OEM projects with dense labor force is the trend of the times, and the Pearl River Delta is gradually losing its cost advantage.

However, Zuo Xiaolei did not think that the relocation of the factory was a common phenomenon.

She pointed out that a considerable number of employment problems could be solved by the representative factories. If the factories were moved out densely, there would be serious unemployment problems in the Pearl River Delta.

Therefore, Zuo Xiaolei believes that the relocation of low-end foundry industry in the Pearl River Delta is a normal phenomenon, which has been the case for nearly ten years.

Jiang Lin also has a similar view. "According to my research, foreign companies have been searching for representative factories in Southeast Asia in recent years."

Jiang Lin said that China is an important consumer market in the world. Even if Adidas chooses all the subcontracting factories in Southeast Asia, they will not abandon the Chinese market.

From the current data, Adidas did not withdraw on a large scale, and the cancellation of cooperation with a small number of Chinese manufacturers could create a false impression of foreign capital withdrawal, which might force local governments to introduce more favorable policies.