The Balance Of Opportunity For Dongguan Shoe Enterprises To "Escape" Manufacturing Industry Began To Tilt To The United States

After comprehensive consideration of wage costs, tax burden and logistics efficiency, a shoe company in Dongguan, the world factory, plans to move its production to the United States. In recent years, China's investment in the United States has grown rapidly, and the balance of global manufacturing opportunities has begun to tilt to the United States. This shoe company is the epitome of this trend. In Dongguan, the world's factory, Glen Lin is trying his best to keep his shoe factory competitive. In the face of 15% annual wage growth, heavy tax burden and expensive and slow logistics, Glen Lin has to introduce automated production as soon as possible, and plans to flee to his largest market - the United States.

Glen, deputy general manager of Dongguan Winwin Industrial, a Taiwan funded enterprise in Dongguan Lin is currently looking for a factory site in the United States to move the latest equipment for producing high-quality sports shoes and casual shoes to the United States. The factory may be located not far from the main customers, perhaps near Skechers, California, Crocs, Colorado, or Nike in Portland, Oregon Inc. Cl B, NKE).

The opportunity balance of global manufacturing industry began to tilt to the United States. US President Donald Trump) once angrily said that China "raped" the United States during the election campaign, and threatened to impose a 45% tariff on Chinese imports in an all-round way, so as to bring manufacturing jobs back home by tough means.

This trend was very obvious long before Trump began to release alarmist protectionist statements to win the support of domestic blue collar workers. In fact, the trade challenge from China reached its peak years ago: China joined the World Trade Organization in 2001 Trade Organization, Shortly after that, China's exports to the United States began to soar, and millions of American assembly line workers lost their jobs. But after that, the impact tended to ease. According to non-profit organization Responding According to the data of Initiative Manufacturing jobs And the inflow of jobs roughly offset each other. The agency encourages enterprises to move production lines back to the United States.

Employment creating investment from China is particularly rapid. According to Rhodium Group), this kind of investment tripled to 45.6 billion US dollars last year. Last year, auto glass tycoon Cao Dewang announced that he would move part of his production empire to Ohio, which caused heated discussion on Chinese social media. Some critics accused him of "running away". Cao Dewang insists that as far as the automotive glass supplied to the US market is concerned, it is more profitable to produce it in Ohio than in China.

Although the salary level of the United States is higher than that of China, the gap is rapidly narrowing. Andy Gu, Vice President of International Business of Midea Group Co., 000333. SZ Gu) said that a competent engineer can currently earn up to 50000 dollars a year. Under the condition that the enterprise provides board and lodging, the monthly salary of ordinary workers is about 600 dollars. Midea Group is a large household appliance manufacturer with its headquarters in southern China. In addition, the price of industrial land in the United States is often lower than that of coastal cities in China. The shale gas revolution has also greatly reduced the energy cost of the United States.

But what really matters is technology: advanced manufacturing creates a level playing field. After China's accession to the WTO, shoe and clothing manufacturers first fled the United States, triggering a wave of outsourcing. Furniture and electronics manufacturers followed suit. Today, the U.S. manufacturing industry is reviving and attracting some enterprises to return, but the Trump government, obsessed with trade deficits, does not recognize that the U.S. manufacturing industry is recovering.

　　Dongguan Winwin can be said to epitomize this long-term trend. A few years ago, this company moved part of its production business to Indonesia and joined a large number of shoe manufacturers who transferred their business from China to Southeast Asia, because in Southeast Asia, the wages of workers who sew and glue cheap sneakers are still very low.

Lin stayed in China and developed a high-tech manufacturing process, which sprayed warm plastic onto the stockings and could be formed in just a few minutes gym shoes The rubber sole and upper of the shoe. An injection molding machine operated by two workers replaced the assembly line requiring 50 workers to operate. He now has 60 such machines. Lin said that his goal was to eliminate the remaining two injection molding machine operators.

Once this goal is achieved with a robotic arm, the benefits of production in the United States will become more apparent. First, the two month shipping time will no longer exist. In addition, according to Lin, a new shoes It only takes three months from conception to launch, but now it takes one year. Of course, this will vary from industry to industry. The manufacturing process of electronic products is complex, requiring dexterous fingers and sharp eyes, but robots are still difficult to do. In view of this, Apple (Apple Inc., AAPL) is much more difficult to transfer iPhone production to the United States.

Gu Yanmin said that Midea has no plan to transfer production. He said that China's manufacturing industry has a huge scale effect, and this model cannot be defeated. In addition, China is an indispensable market for many consumer goods such as iPhones. In a few years, China will have about 300 million urban middle class consumers, the number of which is equal to the total population of the United States.

But for more and more companies, the conditions for moving production lines back to the United States have begun to become mature. These companies will not move a large number of assembly line jobs back to the once prosperous and now dilapidated old industrial areas: the idea of the return of manufacturing industry played such a big role in Trump's election process, but it is just a daydream.

On the contrary, investors will recruit skilled technical workers, provided that the market has such talent reserves. A recent Deloitte study predicted that 3.5 million manufacturing jobs in the United States will be vacant in the next 10 years, but there is a gap of 2 million skilled workers. In order to solve this problem, Trump's trade officials may turn to China to learn from experience. Lin said that if he could not find the needed talents in the United States, he would bring in the best talents from Dongguan.

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