Technological Innovation is the Only Way to Break Through the Chinese Shoes Industry

China’s private enterprises as long as the technology to keep up with international brands, new materials, new technology and new marketing methods, the Chinese shoes in the world has a very strong competitive edge. In particular, some specific high tech shoes, and shoes with new technology, they catch up with the world trend, if so, then the future promising.

Dialogue guests in Guangdong Province, deputy director of Institute of Social Sciences into macroeconomic Kenzo Complex development path of China’s footwear industry: China footwear industry after WTO accession started the rapid development, also began an endless storm? Russian police force raid of Chinese shoes, Italian shoes in China to “toxic” survey, the Spanish fire in China shoes, the EU imposed anti dumping duties on Chinese shoes … … are being held in Guangzhou, the “Trade Fair” where they came news that China Shoes “harvest” worse than usual. Where is the way out of the Chinese footwear industry? Specialized reporters interviewed on shoes in Guangdong Province Academy of Social Sciences, deputy director of macroeconomic research into the construction of three.

Footwear Anti Dumping

Main goal is to private enterprise for Ying Zhoukan: Since 2004, China’s shoe exports are barriers to the EU and other countries, bear the brunt of Guangdong and Zhejiang, why is this issue of China’s footwear industry continuously for two years?Into the construction of three: This is not a problem with the Chinese shoe industry, but China’s accession to WTO, China’s traditional products such as shoes, clothing and other protection of off, so the last two years exports of these products in China increased significantly. Shoe production base in China mainly in Guangdong and Zhejiang provinces, so the impact is relatively large.However, in Guangdong and Zhejiang, the problems are different, the situation is more complicated. As far as I understand the situation, the international shoe anti dumping is the major targets of private enterprise.

Most of the U.S. footwear companies in Guangdong and China Taiwan, Hong Kong funded enterprises, producing mainly concentrated in the Pearl River Delta, and many international brands have already moved in 20 years ago, Dongguan and Huizhou, the United States, Nike, Reebok, Germany Adidas and other major brands are concentrated here. Most of Guangdong Shoes for the processing of international brands to do so by the international impact of not too great. But there are also part of the shoemakers are private companies, among them anti dumping will be a greater impact.The situation in Zhejiang Province and Guangdong do not like the majority of its footwear business is private business. From the Chinese domestic market for shoes in the past to prevail in Guangdong, foreign invested enterprises in Guangdong are part of the domestic production of shoes.

However, the rise of Zhejiang private footwear company, Zhejiang shoes account for a growing market share in the domestic market has gradually over the Guangdong, Zhejiang, shoes are also a large number of export. Many enterprises in Zhejiang Private shoes with shoe factories in Guangdong have contact, they mastered the shoemaking process, and with very low cost to the shoe. They have become the main international anti dumping footwear targeted, generally speaking, Zhejiang shoe enterprises have been hit than large enterprises in Guangdong shoes.

All in all, China’s shoes in the international high share. Now, the Americas, Europe, Africa, Asia and other parts of the world can see China’s production of shoes. The footwear industry in Spain, Italy, Russia, are the traditional industries, these countries are gradually losing the competitive advantage in international markets may be another piece of territory do not want to give up the footwear industry. Chinese made shoes for low cost, strongly resisted by them.

Traditional Shoe is Not a Promising Industry

Ying Zhoukan: China’s footwear industry has been rocked by the impact and pressure from international, what kind of Chinese footwear enterprises promising?Into the construction of three: This should be analyzed according to specific circumstances. From the perspective of Guangdong, Guangdong is a province of processing trade, which shoes, textiles, toys account for large proportion. Guangdong’s shoe is made on behalf of the main processing, low processing fees, from the shoes for the whole industry chain, to stay in Guangdong little profit. To the United States, “Nike” shoes, for example, brands account for 30% of the estimated profits, and then a variety of agents around the world accounts for a further 20% 30% of the profits, market and then take away 20% 30% in fact, “Nike” shoes left to processing in Guangdong will not exceed 10% of the profit is very low profits. Dongguan, Huizhou, South China Sea, etc. The shoe company, is to “three to fill a” processing trade mainly obtained from the shoe on the local tax is not high, local governments can not get any tax.

But because the footwear industry is labor intensive industries to help solve the employment problem. Dongguan, millions of people work at the shoe industry, focused on two towns Huizhou a 200 shoe factory, ten to twenty million people at work. Although the technical content of shoe is not high, but the pollution is not very large, so the footwear industry in Guangdong or continue to develop. And the industry shift to the west of Guangdong after the northern part of Guangdong, but will also promote local economic development, industrial upgrading in Guangdong play a role. However, we believe that shoes in Guangdong is not a promising industry, mainly its low technology content, has little effect on local government tax revenue, even help solve the labor force, but did not need to move in Guangdong so many foreign workers.

But private enterprise is different. Most private enterprises shoes Zhejiang and Guangdong are also part of the private shoe, these shoes enterprises can closely follow the international arena if the big shoe companies, big brands, in the appropriate international anti dumping measures and through national business Ministry, industry associations, in their own internal co ordinate, then the private enterprises in Zhejiang, including some of the private enterprises in Guangdong shoes export, has some potential.

The success of the big foreign brands are not in a day, their continuous technological innovation. Such as “Nike” shoes have their own laboratories, research body mechanics, the development of high tech shoes, which produce new products such as air cushion shoes. China’s private enterprises as long as the technology to keep up with international brands, new materials, new technology and new marketing methods, the Chinese shoes in the world has a very strong competitive edge. In particular, some special high tech shoes and shoes with new technology, if they keep up with world trends, then the future promising.

Technical innovation, private enterprise can set up footwear research institutes, with the help of technology related sectors, with some major brands in the back do, now do first third rate four stream brands do after the first class second rate brand. China brand shoes outside the international market do first line down, so the time is ripe, the Chinese enterprises go shoe line with the international brand competition. I believe that, if you notice the quality shoes, technical content, the domestic individual private enterprises will emerge.In addition to production design, the Chinese shoes to become an international brand, is also necessary to international marketing and brand management, brand shoes line profit of over processing profits. I think that after five to ten years, there may be a number of domestic private enterprises can do second tier brand shoes.

Individual Private Enterprises will Soon Join the International Competition

Yingzhou Kan: China is manufacturing country, in other industries are also more or less the same with the shoe, these companies go after the road should be how?Into the construction of three: China is more competitive industry, including clothing, hats, home appliances, toys and so on. Each industry is different, but there are also connected places, such as household appliances, I believe that within five to ten years in the global home appliances Guangdong will occupy a prominent position.

The specific circumstances of each enterprise is different, in general, I think the four Chinese companies are not doing enough: one based management; second is technical; Third, the integrity of the brand development strategy; Fourth International. This company is four threshold.All enterprises should develop according to their actual situation, constantly go to the top of the value chain, value chain do not always stop at the bottom, they only take a small amount of processing fees. Otherwise, the development of such enterprises, it is hard, the outlook is not optimistic.

Technological Innovation is the Only Way to Break Through the Chinese Shoes

Ying Zhoukan: In the current market environment, China’s manufacturing industry to fully break through difficulties, foothold in the world market, what do you think need to condition the external aid to support?Into the construction of three: the government should support China’s national brands. But the problem with the current debate in theoretical circles, there is a view, as long as the production and processing in China, paying taxes, employing workers, then you do not ask foreign investment enterprises, within the funds. But according to our findings, the problem is not so simple.

For example, the “Nike” shoes at very competitive internationally, we all know that “Nike” shoes are made in China, but that the Chinese footwear industry’s international competitiveness, and no one will “Nike” Take out the representative. “Nike” shoes are produced in Dongguan, but it is only processing sectors, in addition to manufacturing, but its R & D and sales are not to grasp the hands of the Chinese people. This chain is broken. “Nike” is only rented home, the person who hired domestic production, its main innovation out of the country. We say that the competitiveness of technology and brand to have its own, this is the most important and is particularly important in Guangdong. If these efforts are not in Guangdong, then the industry chain, Guangdong will always be in a position which is replaced.

Guangdong’s geographic conditions, making it easy to develop export oriented economy of Guangdong, but should not be engaged in export oriented economy as our main results. Dongguan is also a period of time before the leadership reflect this problem, we return inside, more than 50% of the rent from our equivalent of “rent based economy”, we have no products, other people’s products in the processing of what we are here to took, called the development of economy? This is called “rent economy.” Export oriented economic development to this day, its historical achievements, of course, can not be denied, but it’s the problem, we should now see clearly, not to export oriented economy as the sole, the best model, China should be more kind of successful models of economic development.

China should attach importance to private enterprise, national brand. Weiying said recently, “China does not attach importance to private enterprise for shame”, this sentence makes sense. At present, Guangdong, although the policy and academic enterprises attach great importance to private, but the country’s macroeconomic environment unfavorable to the development of private economy, such as corporate income tax is not uniform, making foreign and domestic enterprises can not compete in a fair competition platform. High taxes, while private enterprises, foreign funded enterprises enjoy a super national treatment but now, the profits of foreign funded enterprises in China were much higher than their positive impact on the domestic economy. In this macro environment, private enterprise is difficult compared with the “three capital” enterprises do better.

Why Guangdong Development for 27 years, truly world class companies do much? Why did a really good private enterprise in Shenzhen it? Because the corporate income tax in Shenzhen, whether domestic or foreign investment are the same. Shenzhen Huawei from private enterprises can be seen, as long as the conditions for private enterprises, they can do as good as foreign Degen.Now, China’s private economy is still relatively difficult to go very far this way. I think that China has to adjust the national strategy, the real emphasis on private enterprise, unified enterprise income tax of foreign capital. Everyone in a fair environment development, the only way to get a true private enterprise development.

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