Adidas Will "Evacuate" China Due To Wage Increase

The author of this cartoon: Kuang Biao, "we are not very clear about this news and need to verify it at headquarters."

Yesterday, the news of Adidas's Greater China headquarters responded with undue caution as to the news that Adidas would reduce its production ratio in China due to the high labor costs in China.

According to French media reports, Adidas president Haina said recently that in view of the continuous improvement of China's wage level, in order to reduce production costs, Adidas is ready to shift the production of some products from China.

Foreign shoe enterprises migrate?

According to foreign reports, Hainer, Adidas's chief executive, said that 50% of Adidas's sports shoes are now produced in China and will surpass Nike's sales in China by the end of this year.

However, Haina also said that the company plans to reduce the proportion of production in China because of the increasing wage demands and the increased production costs.

Adidas has opened production lines in India, processing in Laos, Vietnam and Kampuchea, and will even return to Eastern European countries.

Nike also asked some Chinese shoemaking and chemical enterprises to move their production base to India. Clacks, K-Swiss, Bakers and other international shoe giants have set up production lines in Vietnam and Indonesia.

According to the 2007-2008 year report on the competitiveness of Chinese manufacturing industry released by the American Chamber of Commerce and the joint Alan consulting company, nearly 66 of the 66 manufacturing enterprises (mostly foreign enterprises) plan to move their factories to other countries, namely, India, Vietnam, Thailand, Malaysia and Brazil.

Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce and international trade and economic cooperation, told reporters that "the appreciation of RMB and the increase of labor costs are the main reasons for these enterprises to migrate."

According to Yang Yelin, Deputy Secretary General of Guangdong footwear manufacturers' Association, the price of foreign trade shoe enterprises must be raised by 25%-30% before the profit margin can be guaranteed.

"If the cost is not rising, it will be unrealistic, otherwise there will be no way out for China's manufacturing industry."

European and American enterprises have adopted the "double standard". The developed countries in Europe and the United States have blamed the high unemployment rate on the "unfair competition" launched by cheap labor in developing countries.

In view of the phenomenon of foreign capital leaving China, there is an external electricity commentary, pointing out that "when China wants to continue to move forward and seek balanced development in terms of social welfare and environmental protection, some of the foreign investors who boast of" civilized management "have to withdraw because of insufficient profits.