Dongguan Footwear Industry Forms A Complete Industrial Chain

At the beginning of the end of the year, the enterprises that started in the manufacturing heavy land of Dongguan moved outside and closed public opinion, and spread like a cold wind.

Under the current "cold current", the development prospects of the Pearl River Delta have become a hot topic both at home and abroad.

In particular, the Wall Street journal daily news about thousands of PRD factories will go bankrupt this year, which once again aroused great concern from all walks of life.

With the squeeze of many factors such as rising production costs and so on, the operation cost of the Pearl River Delta enterprises has increased significantly and the relocation has occurred. But how serious is it? How many enterprises have moved out? Are these enterprises moving out of Guangdong completely or redistributing production links with expansion relocation? How can Guangdong take the opportunity to guide the upgrading of the industry and eventually realize the goal of changing the cage and changing the birds? As people continue to worry about the continuous increase of business cost, more and more enterprises and foreign capital are far away from the Pearl River Delta, the statistics show different views. It is undeniable that the appreciation of RMB and the improvement of environment require.

Guangdong actually utilized more than 20% of the total foreign capital, according to statistics. In 2007, the province actually utilized foreign direct investment of US $17 billion 126 million, accounting for 22.9% of the total utilization of foreign capital in the whole country, an increase of 18%, an increase of 4.4 percentage points higher than that of the whole country, 9506 new contracts for foreign direct investment, and 33 billion 938 million US dollars of contracted foreign capital, representing an increase of 12.5% and 38.1% respectively.

The proportion of contractual foreign capital in North Guangdong, Guangdong and western Guangdong accounted for only 1 billion 967 million US dollars, 1 billion 49 million US dollars and 981 million US dollars respectively, and actually absorbed 1 billion 76 million US dollars, 530 million US dollars and 332 million US dollars.

The footwear industry has formed a complete industrial chain, said Luo Bin, deputy director of the Dongguan economic and Trade Bureau. In recent years, with the gradual increase of labor costs, recruitment has become increasingly difficult, coupled with international trade friction, appreciation of the renminbi, export tax rebate and adjustment of processing trade policies and other factors, SMEs are facing pressure gradually.

According to Zhang Huarong, President of Huajian group, China's largest female shoe export manufacturer and chairman of the footwear association of Asia, in 2007, the group raised its order price by 3%, but its profit fell by 5%.

Wang Lie, executive secretary of Dongguan famous furniture club, said that in May 2006, the price of plates began to rise, and in August of that year, the cumulative increase reached 50%.

In contrast, Southeast Asian countries such as the mainland and Vietnam have the advantage of low land and labor costs.

In the latest issue of the Asian footwear industry, Ganzhou, Jiangxi, has done a lot of advertising to find customer resources at lower factory prices and labor costs.

According to the introduction, the labor cost in Ganzhou is 10% lower than that in Dongguan. The average wage of Ganzhou Huajian employees is less than that of Dongguan Huajian employees, which is about 200 yuan.

When a shoe factory in Dongguan moved to Chenzhou, Hunan, the average wage of workers was 50 to 100 yuan lower than that of Dongguan, and the local rental level of factory buildings was only 1/3 of that of Dongguan.

But Li Peng firmly believes that Dongguan's shoe companies, especially large shoe companies, will not migrate, for example, Huajian.

Huajian is a large shoe factory with tens of thousands of employees. In January 2002, Huajian established Huajian international shoe city Co., Ltd. in Ganzhou, Jiangxi, with a total investment of nearly 100 million dollars.

Two years later, Huajian set up two shoe making lines in Vietnam, where labor force is cheaper.

In recent years, rumors about Huajian's relocation have not subsided, but Xie Yonghong, director of recruitment at Huajian shoe company, said it was impossible.

On the morning of February 20th, Xie Yonghong sat in front of the recruitment market of the Backstreet labor market.

He said that the company will open Dalong branch in Nancheng city in the near future, and need to recruit 3000 workers, and now has recruited more than 1000 people.

Zhang Huarong said that although the average labor cost in Vietnam is only 3/5 of China, it is inconvenient for industrial matching, and the raw materials and accessories needed by Huajian Vietnam factory must be shipped from Dongguan.

Zhang Huarong's words resonated.

In Li Peng's view, after 20 years of development, the footwear industry in Dongguan has formed a complete industrial chain, and the upstream and downstream matching facilities are very convenient. This is Dongguan's greatest strength.

A shoe factory in Dongguan can complete the preparation of equipment, raw materials and workers in less than a week. 100% of the low-end raw materials can be purchased on thick street.

In recent years, the footwear industry in Vietnam, India, Indonesia and other countries and regions has developed rapidly, and the labor cost there may be lower than that in China at present, but the comprehensive cost will not be much lower.

According to Huang Chunming, at present, Dongguan leather shoes Association has more than 100 member units, including Huajian group Huabao Shoes Co., Ltd., Dongguan Cross Day Footwear Group Co., Ltd. and other famous enterprises. Although there are many places for these enterprises to "send their eyes to the waves", but no enterprise has received "Hydrangea".

Another fact is that in July last year, the Dongguan Leather Footwear Association organized more than 20 member units to invest in Jiangxi, Ganzhou and other places.

Despite the attractiveness of the environment and labor costs in Ganzhou, the members did not show strong interest.

When the shoe companies moved out of Dongguan, the Jim La company moved the factory from Zhejiang to Taizhou.

The company's president, Mr.Jim Violi, said Dongguan will always be the center of the footwear industry, which is why companies choose Dongguan. Many large cities are concerned about the manufacturing of services and high technology, but only Dongguan is the most suitable city for the development of footwear industry.

Luo Bin said that from the special geographical position, special industrial structure and special administrative structure of Dongguan, the comprehensive advantages and core competitiveness can be seen. "In the next long period, Dongguan will attract considerable concentration of industries."

A lot of relocation of enterprises is exaggerated. Miss Zhang is the head of Hubei's investment promotion department, and often comes to Dongguan for investment promotion.

When she heard similar news, he commissioned his friends in Dongguan to collect information about the enterprises they wanted to pfer, hoping to attract them to the local factories.

But more than 10 days later, she had not yet found a company to relocate.

For a large number of Dongguan enterprises to move out, especially the relocation of Taiwan enterprises, Dongguan economic and Trade Bureau officials think the overstatement, the outside world can only see the absolute number of business failures or relocation, but if placed in Dongguan with tens of thousands of enterprises in the background, there is nothing to be surprised about.

Yuan Zhijian said that the relocation of enterprises is not what happened today. Such a situation has appeared three or four years ago, both active pfer and passive pfer.

Where enterprises are located is market behavior. At present, there is no sign of large-scale pfer of enterprises. The outgoing data mentioned in fact are in fact accumulated in recent years, and some even include closed businesses.

Li Peng has repeatedly stressed that some of the shoe factories in the PRD are not moving inland but expanding internally, such as Huajian, Yuyuan and other shoe making enterprises in Dongguan. Although they have built huge production bases in Jiangxi, Anhui, Jiangsu and other places, they have not narrowed the scale in Dongguan.

The expansion is because the development space of Dongguan has reached the limit, and the price of land and labor has reached a certain level and the demand has increased.

At the same time, shoemaking enterprises have no signs of large-scale pfer abroad, and there are only more than 100 shoe factories across the country in the Southeast Asian market.

Zhang Hanwen is the president of the Taiwan Association of investment enterprises and the honorary president of the Dongguan Association of Taiwan businessmen.

In 1991, when Dongcheng big well head was a small hill bag, he set up Fuhua Shoes Co., Ltd.

At that time, Fuhua was only a small factory with a production line, more than 200 employees and 20 thousand shoes per month. But now, Fuhua's production line has expanded to 7, with more than 2000 employees and 150 thousand monthly output.

Zhang Hanwen said, looking at a factory area to build up, just like watching their children grow up.

He has lived in Dongguan for so many years, and has made many friends here. Living in Dongguan is more cordial than in Taiwan. He absolutely can't bear to move out of Dongguan.

Since 1999, Xu Fu Chi has expanded its mainland market. Now it has become a well-known enterprise in the mainland consumer market and its headquarters is in Dongguan.

A Taiwan funded electronics factory in Houjie village has a factory in Houjie and Changan. In the past few years, it opened a branch in Kunshan, Jiangsu.

The company official said: "this does not mean that we will slowly abandon the Dongguan market, we did not want to leave Dongguan."

In his view, the Yangtze River Delta is not as good as Dongguan in terms of flexibility, industrial support and logistics.

The company's strategy is to turn Dongguan into a division of labor center, placing orders for large domestic enterprises in Kunshan and fixing foreign trade orders in Dongguan.

Lin Zhaojie, chairman of the Taiwan footwear industry association, said that in the early 90s of last century, due to the substantial increase in the cost of Taiwan, many shoe companies moved to Dongguan, but this phenomenon did not happen in Dongguan.

The main reason is that the mainland has a huge consumer market, and now many Taiwanese businessmen are actively engaged in domestic sales.

He said that the pfer of industries is not a whole shift, but a pfer of some links.

Just like the shoe industry in Italy, almost all products are designed and developed in Italy, but they are produced in other countries.

Expert opinion now says that "industry hollowing out" is too early. Yuan Yiming, director of the Institute of resources economics, Shenzhen University, China's Special Economic Zone Research Center, is the inevitable stage for the adjustment of the industrial structure of the Pearl River Delta. The Pearl River Delta economic development is faced with the constraints of resource shortage first. It can only carry out industrial upgrading and pformation, and develop more value-added links on the industrial chain.

Because of the phenomenon of relocation of enterprises in the process of pformation, it is too early to say that "industry hollowing out".

The concept of "Industrial Hollowing" is derived from the economic development of Japan and Hongkong. The symbol is that the industry is being built up, the proportion of manufacturing industry occupying GDP is very low, and the proportion of occupying is decreasing rapidly. At present, the Pearl River Delta has not yet seen such a situation.

However, we must attach great importance to the phenomenon of relocation of enterprises.

If the Pearl River Delta pfers more enterprises, it will surely cause the decline of the industrial economy. Therefore, the industrial structure should not be adjusted too fast.

It is impossible for the competent government departments to force enterprises to retain their enterprises. What should be paid attention to is the relocation of enterprises. Can the interaction between the Pearl River Delta cities lead to an orderly relocation of the enterprises to the radiation area of the Pearl River Delta industrial upgrading? Another problem is how to make effective use of the space left after the relocation of enterprises and how to speed up the investment promotion of high-end links.

In view of the economic operation of the Pearl River Delta, Gao Haiyan, the director of the city operation research center of the Shenzhen Social Sciences Institute, is the result of the economic development of the Pearl River Delta, and is also a process of the adjustment of the economic quality structure of the Pearl River Delta.

The relocation of some enterprises in the Pearl River Delta should be viewed in a more rational way.

From the perspective of regional economic increments, the Pearl River Delta has shown a steady development in terms of total economic volume and economic indicators in recent years. This shows that the Pearl River Delta industrial structure adjustment is in progress, and the view of "Industrial Hollowing" is too exaggerated.

In the process of development, cities in the Pearl River Delta have been paying attention to the balance of growth and decline.

For example, since the stock market turmoil in 1992, Shenzhen has not been marginalized, because the independent industries with strong advantages are supporting. In the future development, we must seize the pillar industries to find the upside space, take the pillar industries as the core, and ensure the end of the industrial chain.