Factors Restricting The Development Of Shoemaking Industry In Dongguan

The footwear industry in Dongguan has been growing rapidly for many years. The shoe manufacturing base has encountered difficulties in recent years.

RMB appreciation, rising raw materials, adjustment of export and export tax, and promulgation of the new labor law.

Every difficulty is suffering from every shoe maker in Dongguan.

The shortage of resources in Guangdong is mainly due to labor intensive footwear, household appliances, furniture and other enterprises.

Oil shortage, electricity shortage, labor shortage and rising raw materials and oil prices are a serious blow to the footwear industry.

From last year to now, the price of chemical products needed for shoemaking has increased by nearly 20%, and the profits of shoes are less and less.

Some new materials, such as TPU, rise by 2000 to 5000 yuan per ton. These materials have been accepted by consumers. Substitutes are not only related to the performance, quality and grade of products, but also directly affect the consumer market, so shoe companies can not use substitutes easily.

Although Guangdong's footwear industry has a large scale of upstream and downstream production, but because some enterprises rely heavily on the export of processing trade, Guangdong textile industry is gradually lacking in independent innovation ability and market adaptability.

The footwear industry in Guangdong urgently needs to improve its innovative and differentiated capabilities.

The competitiveness of footwear industry in Guangdong is not perfect because of the regional sustainable innovation system.

For example, the low added value of products and the large scale of the product market are not suitable; the weakness between the weak R & D strength of enterprises and the strong market ability of enterprises; the lack of industrial Embeddedness and the imbalance between industrial scale and economic strength.

To this end, on the one hand, we need to pay close attention to industrial cluster governance, undertake a new round of global footwear industry pfer at a high level; on the other hand, we must strengthen industrial Embeddedness and speed up the overall upgrading of industries.

Dongguan has become one of the largest processing bases in the world by foreign investment "processing of incoming materials".

In the face of power shortage, oil shortage and labor shortage, a large number of shoe enterprises in Dongguan moved outward.

However, when the new industries are not being pferred, the crisis of Industrial Hollowing will emerge.

According to the insiders, if Dongguan's footwear industry does not have enough enterprises to keep its headquarters here and there are not enough enterprises to realize industrial pformation and upgrading, Dongguan will become hollow.

This is a severe crossroad for the footwear industry in Dongguan.

Industrial upgrading still needs to work hard. Since Dongguan shoe industry entered the shuffle year, industrial upgrading is a problem for Dongguan shoe enterprises.

But industrial upgrading is a difficult problem for Dongguan shoe enterprises, and still needs to make a lot of efforts.

In the early years, the large number of Hongkong and Taiwan invested in Dongguan quickly promoted the industrialization and urbanization of Dongguan. But at the same time, it also made Dongguan basically "solidified" on the low cost OEM. Under the condition that the proportion of state-owned and collective enterprises was very low and private enterprises did not fully grow up, the upgrading of the industry was still very difficult.

Dongguan's shoe industry has always been processing foreign brands, and it has become the main business mode of many shoe enterprises. This mode has been challenged by export tax rebates and processing trade adjustment since last year.

After last July, the reduction of export tax rebate rate of professional footwear foreign trade companies with low profits accelerated their demise.

In addition, since August 1, 2007, the state has expanded the catalogue of processing trade restricted commodities, and the processing trade enterprises in the eastern coastal areas must give the deposit to the bank management. The cost of processing many shoe enterprises in Dongguan has increased by about 10%.

There are quite a few small shoe enterprises in Dongguan. The family workshop mode of production makes footwear products unsatisfactory in terms of wear resistance, folding resistance, comfort and other indicators. This low-end product has become increasingly unpopular with consumers and can only be seized by price war.

China's export footwear enterprises are developing rapidly, and occupy a large part of the market in the United States, the European Union and Russia, making the western traditional footwear enterprises feel a strong competitive pressure.

For example, in the shoe making power Italy, the cost of producing a pair of leather shoes is more than 7 times the cost of shoe making in Dongguan.

The products of low price competition can easily become the object of anti-dumping and safeguard measures.

In October 2006, the European Union announced a 16.5% anti-dumping duty on Chinese leather shoes enterprises for a period of two years.

In June 2007, Taiwan also imposed a 43.5% anti-dumping duty on 6 types of footwear products in the mainland.

The EU and Taiwan are listed in the key export areas of Dongguan, and the severity of the attack can be imagined.

In recent years, the exchange rate of RMB against the US dollar has been rising. At present, the exchange rate has broken 6.9, making shoes enterprises a headache.

Because foreign businessmen usually place their order in US dollars, Dongguan shoe enterprises pay in Renminbi for both payment of workers' wages and material purchase.

As a result, the decline of the US dollar against the RMB exchange rate directly reduces the profit of footwear products.

The implementation of the new labor law this year has led Dongguan shoe manufacturers to consider whether to continue to survive.

A lot of shoe business owner frankly says, in the many challenges that shoemaking industry faces, new labor contract law is hit hard.

The new labor contract law makes the cost of hiring employees generally increase by more than 8%.

Embarrassment is that shoe companies are also suffering from lack of work while increasing labor costs.

At present, chemical industry, food industry, construction industry and other industries have a strong demand for labor, resulting in increased mobility of the footwear workers, plus the long working hours of some footwear manufacturers, and the loss of skilled workers.