Professor Yifu Lin Visits The World Footwear Headquarters Base

In July 18th, the famous economist, Beijing Director of the China Center for economic research, senior vice president of the former World Bank Yifu Lin The professor visited the world footwear headquarters base and conducted an in-depth conversation with Chairman Zhang Huarong of the world footwear base.

Prior to this, Professor Lin has made a special lecture on the development of China's footwear industry and the industrial transfer of Huajian group, and has made a deep analysis of the world footwear industry and the general trend of world economic development.

Development economics is one of Professor Lin's professional research fields, and is a theoretical achievement of profound research on China's economic development and world economic development. Professor Lin said that in the past, many enterprises like Huajian group have made great contributions to China's economic development. My research and development economics is hoping that our country can further develop. At the same time, we can help other countries' underdeveloped countries and regions develop according to this experience.

In the past time, the development of Huajian group is a China. manufacturing industry Huajian has seized the good opportunity of China's development. Zhang Dong seized the opportunity of development and made Huajian group become the leader of domestic shoemaking in just a few years. This is actually the epitome of the development of many domestic labor-intensive enterprises.

Shoemaking industry is a traditional labor-intensive industry, but it is also an industry that will never die. Whenever there is a huge demand for shoes in the domestic and international market, the prospect of shoemaking industry development is good. Industrial transfer is indeed an unavoidable topic. In the past, Huajian group transferred from Dongguan to Ganzhou. It made use of the local characteristics to effectively promote the development of enterprises by exploiting the gap between the development of the mainland and the coastal areas. Facts have proved that Huajian's achievements today are closely related to the correct decisions and correct vision at that time.

Similarly, in October 2011, Hua Jian went abroad to invest in Ethiopia and became the first Chinese shoe industry to go to African countries. This takes some courage. But today, we can see that this is very important for Huajian and is also very important to China's footwear industry, because it provides a practice and an attempt for the development path of China's footwear industry.

Shoemaking industry is labor intensive industry. With the rising labor costs in China, according to the future plan of China's development, the domestic labor cost will be doubled in the next 10 years. Then, how will the domestic footwear industry compete with Vietnam and compete with other countries such as Kampuchea? However, the footwear industry will always develop. In the development process, some aspects of domestic shoemaking are bound to lose competitiveness in the development trend of the world. The answer is to go to the two ends of the smile curve, develop high value-added links, transfer intermediate links to low wage areas, make cheap production, and make the products competitive, so that they will be more competitive in the international market.

As for Huajian's investment in Ethiopia, why Huajian did not go to Africa in the near future, Professor Lin explained that Vietnam's relatively small number of employed labor force, and transferred to Vietnam, will soon increase the labor cost of Vietnam, the cost advantage will soon disappear and the development momentum will not be enough. Africa has a large population, the modern manufacturing industry is very backward, and it is still in the agricultural dominated society. At the same time, Ethiopia's wage level is very low. Therefore, its competitiveness is very strong and its development conditions are very good.

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The leading enterprises in China can make good use of their own good management, technology and quality resources, combined with the favorable resources of the locals: high quality of labor force, low cost, and good policy environment. Moreover, once the industrial agglomeration is formed, the current logistics cost will be further reduced, and the overall cost will also decline, and the benefit will increase obviously. There is a saying in the industry that Africa can not become a manufacturing base. African products can not compete with China in the international market and compete with Southeast Asian countries such as Vietnam. However, as we can see today, Africa is highly competitive in labour intensive manufacturing. In terms of the footwear industry, Ethiopia wages are 1/10 of the total in the country and half of Vietnam, while the domestic cost is rising. In the next 10 to 20 years, the advantage of low labor cost will soon be lost. If African countries seize this opportunity, Africa will release enormous potential for development.

Huajian also proves that Africa can develop manufacturing industry, and leading domestic enterprises can go abroad to help the economic development of backward areas. The authoritative media in the world also invest Huajian group as an important case in developing manufacturing industry in Africa. So, personally, I feel that investing in Ethiopia is not about how much money we earn, but what is more important for Huajian to contribute to the backward areas in Africa and to contribute to the cause of human progress.

After the meeting, Zhang Huarong, chairman of Huajian group, said that Professor Lin's speech made me very moved and excited, and as Professor Lin said, spark can start prairie fire. Professor Lin has given us the direction of development. Today we have the opportunity to help more poor people. Chinese enterprises go out to invest. Huajian is an important case. Huajian goes out to solve employment for Africans and helps Africa to develop. This is a great realm. We want to become a shoe carrier in the future, serve the whole industry, win honour for our people, and we must pursue the pursuit of our cause.