Opportunity And Risk Coexist In Shoe Companies' "Going Global"

A few days ago, the sixth world footwear industry development forum was held in Dongguan, Guangdong. With the theme of "made in China", the forum explored the issue of "going out of China's manufacturing industry" and industrial pformation and upgrading.

In recent years, with the rising cost of raw materials and labor in China, many enterprises are trying to reduce costs by "going out" strategy, especially in the manufacturing industry at the bottom of the industrial chain.

In fact, "going out" is no longer a new topic for the shoe industry.

As early as the financial crisis in 2008, Chinese shoe enterprises, which suffered economic shocks, proposed the strategy of "going out" and tried to reduce costs through industrial pfer.

In recent years, with the harmonious development of Sino African relations, the government has also strongly encouraged enterprises to invest in Africa to set up factories and implement a series of preferential measures.

During his visit to Africa, Premier Li Keqiang said that China would like to give priority to the pfer of suitable and needed labor-intensive industries and advantageous capacity to Africa, enhance local self-development capacity, create more jobs, and make China Africa achieve mutual benefit and win-win situation.

In addition to the strong support of the domestic government, African countries have issued a series of preferential policies for foreign investment.

All countries in Africa regard tax preferences as a powerful means to attract investment. In addition to tax preferences, countries have different measures to support foreign investment: Zimbabwe will give certain financial subsidies to enterprises with specific investment patterns; Morocco set up special funds to encourage and support investment in textile and leather industries;

Preferential policies for enterprises in specific industrial parks should be implemented, such as income tax exemption for 4~7 years, and foreign exchange reserves of 30%.

With policy support, there are enterprises who dare to be the first to eat crabs.

As a base of manufacturing

And Dongguan were the first to go out, and many local enterprises tried to relocate their factories to Southeast Asia and Africa.

According to Wang Jingceng, President of Dongguan shoe machine Association, there are 41 investment projects pferred from Guangdong to China since 2012, of which 15 and 13 have been pferred to Malaysia and Vietnam, mainly textiles, clothing and shoes and hats.

It is gratifying to succeed in "going out", but we must not ignore the obstacles encountered in "going out".

Some analysts say that due to the market development level and the strength of enterprises, the overseas investment of Chinese enterprises is still in the initial stage of development.

First of all, China's financial system has limited support for private enterprises going out.

Domestic audit procedures for overseas investment loans are very strict. If enterprises invest less than 1 million US dollars, banks will not consider the loan application of this enterprise. Therefore, small and medium-sized private enterprises are very difficult to obtain bank loans, virtually increasing the burden of capital chain.

Second, even if the enterprise obtains the bank loan, because the asset concentrates overseas, the bank is difficult to examine, once the enterprise appears the management difficulty, will be required to repay immediately.

Secondly, the administrative examination and approval procedures are complex.

Although the government has streamlined the process of administrative examination and approval, the process and procedure of examination and approval are still complex for small businesses.

According to the "overseas investment management measures" issued by the Ministry of Commerce in 2014, domestic enterprises should apply to the Ministry of Commerce or the provincial commerce department for overseas investment, and submit a series of application materials.

In the process of approval qualification, local enterprises can not apply for leapfrog applications. They should first apply to the provincial commerce department, and the provincial commerce department will report it to the Ministry of Commerce after collecting materials.

In this process, enterprises need to wait at least a month or so.

Last but not least, cultural factors.

China is an ancient country with a history of 1000 years. It has its own characteristics in culture and customs, especially its work attitude and interpersonal relationship.

Chinese people are very earnest, industrious and dedicated, and have a natural thought of official worship. This is totally different from the western liberalism.

The contrast of strong values is also a difficult problem for Chinese enterprises to "go out".

It is reported that some domestic enterprises investing in Africa and Southeast Asia do not understand the local culture and laws, and do not know deeply about local ecological folklore. They intentionally make some behaviors that cause local people's disgust, thus causing business difficulties.

In addition, the quality and attitude of employees also make many business owners headache. Because there is no overtime culture abroad, employees in western countries often complain about resisting overtime.

There is an old saying in China: orange is Huainan, orange is born, Huaibei is trifoliate orange.

Although the geographical environment has little impact on shoe enterprises, there are great differences in culture, workers' educational background and management methods in different regions. While seeing huge profits, enterprises need to think about their own economic strength, the fit degree between enterprises and local culture, and so on.

In short, "going out" opportunities and risks coexist, shoe companies must think twice before proceeding.