Lin Yifu Had An In-Depth Conversation With Zhang Huarong, Chairman Of The World Footwear Headquarters Base

Professor Lin Yifu, a famous economist, director of the China Economic Research Center of Peking University and former senior vice president of the World Bank, visited the world shoes The industry headquarters base visited and investigated, and had an in-depth conversation with Zhang Huarong, chairman of the World Footwear Headquarters Base.

Prior to this, Professor Lin gave special lectures to Huajian Group officials on the development of China's shoe industry and the industrial transfer of Huajian Group, deeply analyzing the world shoe industry and the development trend of the world economy.

Development economics is one of Professor Lin's professional research fields. It is a theoretical achievement of profound research on China's economic development and the world's economic development. Professor Lin said that in the past, many enterprises like Huajian Group have made great contributions to the development of China's economy. I study development economics in the hope that our country can further develop, and at the same time help the development of underdeveloped countries and regions in other countries based on this experience.

In the past, the development of Huajian Group has been a model of Chinese manufacturing enterprises. Huajian seized the good opportunity of China's development, and Chairman Zhang seized the opportunity of development, making Huajian Group become the leader of domestic shoe manufacturing in just a few years, which is actually a microcosm of the development of many domestic labor-intensive enterprises.

The shoemaking industry is a traditional labor-intensive industry, but it is also an industry that will never die out. No matter when, there is a huge demand for shoes in the domestic and international markets. Therefore, the development prospect of the shoemaking industry is bright. Industrial transfer is indeed an unavoidable topic. In the past, Huajian Group moved from Dongguan to Ganzhou, which effectively promoted the development of enterprises by taking advantage of the gap between the development of the mainland and the coastal areas and the local characteristics. Facts have proved that Huajian's achievements today have a lot to do with the right decisions and vision at that time.

Similarly, in October 2011, Huajian went abroad to invest in Ethiopia, becoming the first Chinese shoemaking enterprise to enter African countries, which requires some courage. However, today we see that this is very important for Huajian, as well as for China's footwear industry, because it provides a practice and attempt for the development of China's footwear industry.

The shoemaking industry is a labor-intensive industry. As the domestic labor cost continues to rise, according to the future plan of China's development, the domestic labor cost will double in the next 10 years. At that time, how will the domestic shoemaking industry compete with Vietnam, Cambodia and other countries. However, the shoemaking industry will always develop. In the process of development, some links of domestic shoemaking are doomed to lose competitiveness in the world's development trend. The solution is to move towards the two ends of the smile curve, develop high value-added links, transfer the intermediate links to areas with lower wage costs, produce cheaply, make products competitive, and then become more competitive in the international market.

As for Huajian's investment in Ethiopia, why Huajian did not move to Africa instead of moving nearby, Professor Lin explained that there are relatively few employed labor in Vietnam. Moving to Vietnam will soon increase labor costs in Vietnam, cost advantages will soon disappear, and development stamina is insufficient. While Africa has a large population, its modern manufacturing industry is very backward, and it is still in a society dominated by agriculture. At the same time, Ethiopia's wage level is very low, so its competitiveness is very strong, and the conditions for development are very good.

While domestic leading enterprises can use their own good management, technology, high-quality resources, combined with local favorable resources: higher labor quality, low cost, good development policy environment and other factors, to do a good job in products and compete with other regions in the domestic and foreign markets. Moreover, once the industrial agglomeration is formed, the current logistics cost will be further reduced, and then the overall cost will also decline, and the benefits will increase significantly. There is a saying in the industry that Africa cannot become a manufacturing base, and African products cannot be sold to the international market to compete with China, Vietnam and other Southeast Asian countries. However, today we see that Africa is very competitive in labor-intensive manufacturing. In terms of footwear industry, Ethiopia's wage is one tenth of that in China and half of that in Vietnam, while domestic costs are rising. In the next 10 to 20 years, Ethiopia will soon lose the advantage of low-cost labor. If African countries seize this opportunity, Africa will release huge development potential.

Huajian has also proved that Africa can develop manufacturing industry, and domestic leading enterprises can go abroad to help the economic development of backward regions. The international authoritative media also regard Huajian Group's investment in Ethiopia as an important case of Africa's development of manufacturing industry. Therefore, I personally think that Huajian's investment in Ethiopia is not about how much money it makes, but more importantly, what contribution it can make to Africa's backward regions and the cause of human progress, which is also my expectation for all of you here.

After the meeting, Zhang Huarong, Chairman of Huajian Group, said that I was very moved and excited by Professor Lin's speech. As Professor Lin said, a single spark can start a 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 provide employment for Africans and help Africa develop. This is a big realm. In the future, we will be an aircraft carrier in the shoe industry, serve the entire industry, and win glory for Chinese people. We will pursue a career.