Sad Reminder: The Textile And Garment Factories Moved To Southeast Asia, And They Fell Into A Hole.

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Recently, the main suppliers of Adidas and Nike [Baocheng group] decided to adjust the global strategy: Vietnam will no longer expand factories. In addition, Japanese enterprises and Chinese enterprises in Vietnam, which had invested in factories in Vietnam earlier, no longer set up factories in Vietnam.

What does this mean?

Over the past few years, there have been many reports and analyses about the relocation of China's textile and garment manufacturing industry, the return of high-end manufacturing to the United States, and the pition from low end manufacturing to cheaper Southeast Asia.

But moving factories to Southeast Asia can really save meager profits?

Recently, a friend from a garment factory told me such a case:

A multinational garment M group has many product lines, one of which is a manufacturing factory in a southern city of China.

The company's sales orders all over the world are converged to this manufacturing plant and business is booming.

The multinational group has a department (A Department), which specializes in comparative costs around the world, and decides the relocation of factories.

The A department inspected the factory in southern China. It believed that its labor costs had risen gradually over the years and had no comparative advantage. It suggested that the factory be moved to other places.

It also inspected a country in Southeast Asia (P country) and found that the manpower cost here is much lower than that in China, and there are ports and pportation is very convenient.

The most advantageous thing is that there is a main raw material factory here, and the quality of the fabric is good, that is to say, the new factory can be purchased locally.

The conclusion of the A department is that this is a natural place to replace Chinese factories.

In the end, the headquarters set up a new factory in P, and the factory was closed in the year when the new factory was established. The SAP system automatically pferred the sales orders all over the world to the new factory of P.

Then... Tragedy began.

The new factory buyer suddenly discovered that the fabric factory (smaller) had already signed an exclusive purchase agreement with the M group's main competitors, and the new factory could not buy any fabric locally.

There is no way to resume the original purchasing department of the Chinese factory, purchase raw materials from the original suppliers, and then export to P new plant.

The raw materials for containers were sent to the port of P, where the port loading and unloading procedures and customs procedures were tedious and inefficient, and the raw materials were piled up in the ports. Similarly, the products produced by factories were not easy to produce, and they were also piled up at ports.

Sales all over the world are crying out for customers.

Now the tragedy is still going on. I don't know when to start.

To this, my clothing factory Friend's feeling and experience are:

In the early period of China's reform and opening up, there was not much direct investment from multinational corporations.

People with a bit of age are impressions, mainly from the investment in Hong Kong, Macao and Taiwan, and processing trade from three to one.

In the whole stage of reform and development, China has always insisted on investment in infrastructure. After 2000, after 20 years of reform and opening up, multinational enterprises began to enter China in real scale.

That is to say, large scale industries need complete infrastructure besides the need for adequate human resources.

Otherwise, they are all pits.

To consolidate the status of China's manufacturing industry, fundamentally speaking, it must depend on the rise of local manufacturing enterprises.

Large multinational enterprises run in China are, in essence, part of their industrial chain. They are either lack of technological R & D capability, or both market and technology are out of business, and the right to operate is not in their own hands. The factory is pferred, that is, there is no way for a multinational company headquarters to say a word.

In the long run, this type of factory is bound to be closed. It is inevitable and can not be stopped.

The catfish effect of multinational enterprises on China's manufacturing industry has become dispensable with the rise of China's local manufacturing industry.

Many people worry about the return of manufacturing in the United States. They see cheaper land prices, electricity prices or other favorable factors in the United States, but it is easy to overlook a more fundamental factor: people.

In the United States, it is hard to see the young people in the traditional manufacturing factories, mostly white haired old people.

If China and the United States fight trade wars, the United States may be scarred by the first few years, but the manufacturing industry in the United States can not benefit from it. The most likely situation is that it hurts China's manufacturing industry at a huge cost and then spends a lot of money on imports from its foreign origin.

In the circular, we are glad that the United States government has not included the footwear, clothing and travel products in the tax increase list, otherwise it will have a disastrous impact on the US consumers. The consumer electronics industry association in the circular said that the Trump government put the TV set in the 25% tax increase list, calling on the enterprises and consumers to act in the 30 day commentary period, so that the US government can make clear the damage to the US employment and economy. Because the plastic products are included in the tax increase list, the US plastics industry association is injured. They have appealed in the notice that before the tax raising plan comes into effect, we hope that the two countries will reconsider and do not go further in the wrong way. We hope that the two countries will find a real solution so that all enterprises and consumers can benefit from it. Let's look at the performance of American trade associations when the trade wars first broke out.

After all, even a lot of people support Trump who has "anti globalization" remarks, but when shopping, they finally choose to buy cost-effective products, and these commodities are likely to come from China in 90%.

China's recovery from a series of strikes in the trade war must rely on local manufacturing enterprises.

ZTE is neck tied by Americans, but from the national level, such enterprises' surface scenery is actually our hidden weakness. The sooner we expose it, the better. If ZTE falls, its market share will be taken over by HUAWEI, so as to make it more powerful.

Just like in 80s, we were jealous, jealous and hate to Japan's manufacturing industry. However, the trade imbalance between China and the United States is the result of the division of labor in the international industry, and there is an inevitable trend. If anyone wants to pull it over, it must be twice the result of half the effort and hit the south wall.

Just as

Factory friends said, the industrial chain from China is not so easy to move out.

Why do we say so? Because China is the only country in the world that has all the industrial categories in the United Nations Industrial Classification, and constitutes an industrial system of "complete and independent". Besides, China's matching is much better than that of Southeast Asian countries.

For example, Vietnam, many entrepreneurs in our country have also found that there are many people who go to Vietnam to investigate, but there are very few people who really invest in factories.

Why? The cost you can see is less than that of artificial hydropower, but invisible hidden costs may be a deep pit.

The extreme case is the Vietnam exclusion of China in 2014, and some factories were destroyed for over a decade.

Closer to the point, the main suppliers of Adidas and Nike recently.

Tycoon Baocheng has decided to adjust its southward policy, and Vietnam will no longer expand its factories. It has no doubt that the strike of Vietnamese factories has caused a great deal of damage to the image of the group.

In March 24th this year, thousands of staff strike in Baocheng's independent shoe factory in naeni Province, Vietnam, is the fifth major strike in Vietnam in recent seven years.

It is understood that Vietnam has increased by more than 17 times in the past 20 years, and the rate of social insurance has been steadily increasing. Since the beginning of this year, the Vietnamese government stipulates that all employees' income, including bonuses, must be included in the insurance premium, which will cause considerable impact on the labour intensive industries such as shoemaking and garment making.

On the other hand, the awareness of Vietnamese workers' rights and interests is high, and the trade unions are exchanging each other's needs. Once there is any trouble, they will soon be able to exchange information with each other. They will strongly ask the management to handle the matter in accordance with the regulations, otherwise they will start work or strike.

The employee strike in Baocheng is because the Vietnamese factory has launched a new pay system. Some employees are worried about the strike of income and welfare.

But Baocheng's future strategy is to invest heavily in Indonesia and Burma.

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Japanese companies and early Chinese enterprises in Vietnam, which had invested in factories in Vietnam, no longer set up factories in Vietnam, instead investing in real estate and agriculture in Taiwan.

To some extent, this has already been explained.

Wind direction.

We now emphasize repeatedly that the driving force of the pformation and upgrading of manufacturing industry is not entirely derived from the so-called "threat" in Southeast Asia. At present, "Made in China" can "occupy" the world, and so is the future.

But the country's policy orientation is to promote the development of the manufacturing industry, especially the development of the high-end manufacturing industry, thereby promoting social progress, the strong country and the improvement of people's quality of life.

After all, no one wants to be in the position of "dressing for others" forever.

Therefore, we need to consolidate China's textile industry.

The status of the industry will depend fundamentally on the upgrading of technology and upgrading of the brand in China's domestic enterprises, and towards the high-end manufacturing and quality strategy.

To tell you the truth, in the current pformation period, a group of low-end manufacturing enterprises will surely be killed to make room for the market. Only after shuffling, will they stay behind to really make products and make good products.