After The Crisis, Shoe Industry Reinterpreted "Made In China".

The average American buys 7 pairs of shoes a year, while the average Chinese mainland buys less than two pairs a year. Dongguan, located in southern China, is widely known. Its fame comes from factories rather than talents. But perhaps only talent can save the manufacturing center. At least this is David Schwan's. When the factory closes and the workers leave town, David, a footwear designer from London, does the opposite. He recently opened a boutique design studio in Dongguan, where his company works with manufacturers to produce and sell high-end footwear. He said that the key to success lies in creativity. "Cheap is no longer a weapon." David is part of an urgent effort in southern China to push footwear industry out of reliance on low value exports. With rising costs and depressed demand, more and more shoe makers are moving up to the high-end market. By investing in designing and building their own brands, they want to expand profits and enter new markets. But reshaping "made in China" is not easy. The industry in that area was a symbol of the strength of Chinese manufacturing industry, but now it is in crisis. Since the opening up of the Chinese economy in the late 70s of last century, the Pearl River Delta in Guangdong, which is located in Dongguan, has attracted shoemaker mainly from Taiwan and Hongkong because of its cheap land, lax supervision and seemingly endless cheap labor force. China is now the world's largest footwear producer, exporting 10 billion pairs of shoes annually, of which about 1 / 4 comes from Dongguan. But the days of cheap land and labor are in the past. Then there is the era of super cheap "made in China" shoes. Fang Zhigang, President of Hongkong Footwear Association, said it was the worst period in 25 years. He said: "we built this industry for 30 years, and now we are destroyed in 6 months." Footwear manufacturers say the problem is simple: rising costs and falling demand. Thousands of factories are scattered throughout the Pearl River Delta, and the supply of cheap land has disappeared. At the same time, China's new labor law has led to an increase in labor costs. The appreciation of the RMB exchange rate has also weakened the export competitiveness. Meanwhile, the financial crisis has led to a sharp decline in demand for shoes. These factors have resulted in disastrous consequences. Mr. Wang, general manager of a slipper manufacturing enterprise, said: "I know it will be very difficult, but I did not expect sales to fall so suddenly and so quickly." Wang's factory has about 500 employees, and he expects sales to decrease by 30% to 50% in 2009. That means layoffs. In order to win the market, he began to focus on design and brand, hoping to expand the share in the Chinese market. Wang said that 90% of the former products were exported abroad, but hoped to sell up to 50% of the products to mainland consumers in the future. But there is no guarantee that Chinese people will buy many shoes like Americans. According to Mr. Chu, organizer of the Guangdong footwear exhibition, the average American buys 7 pairs of shoes a year, while mainland Chinese buy less than two pairs of shoes a year. This is the case before the global economic crisis caused China's growth to slow down. But in Dongguan, many people are more willing to take a long view. Chu believes that the current "transition period", those who rely on cheap land and labor force will go bankrupt, and more powerful and environmentally responsible companies will appear. Wang Xiaonan: editor in charge