Can "Made In China" Of Shoes And Clothing Enterprises Be Replaced By Southeast Asia?
Adidas Closing Oclaro, the sole proprietorship factory in China and the world's leading optical fiber communication provider, announced that it will shift its business in China to Malaysia plant. Recently, a series of multinational companies have turned their business in China to Southeast Asia, which has attracted people's attention. The United Nations Trade and Development Organization released a report that foreign direct investment (FDI) inflows to Southeast Asia in 2011 amounted to US $117 billion, an increase of 26%, an increase of far less than 8% of China's share in the same period. Is "made in China" moving to Southeast Asia? Will "Southeast Asian manufacturing" replace China in the future? Made in China "Competition will be more intense in the future.
Manufacturing from China to Southeast Asia?
Vietnam's state news agency recently announced that the world famous sports brand Nike's sports shoes in Vietnam has exceeded the scale of production in China, and has become the world's largest producer of Nike shoes. At present, Nike sports shoes produced by Vietnam account for 41% of the total Nike sports shoes, while the proportion of Nike sports shoes produced in China accounts for only 32%. Earlier, Adidas also decided to close the sole proprietorship factory in China and move the factory to Kampuchea. This makes many people worry about whether international capital investment in manufacturing is shifting from China to Southeast Asia.
A report by the joint China World Trade Center Development Organization said that the relative competitiveness of ASEAN countries in manufacturing continued to increase as China's wage costs and production costs continued to rise. Some foreign companies investing in coastal areas of China have moved to Southeast Asia, while others have shifted production to inland areas in China. An annual survey conducted by UNCTAD in 2012 shows that Southeast Asian countries have a bright future in the ranking of the most popular host countries selected by multinational corporations, especially Indonesia and Thailand.
"In fact, we were forced to move here when the price of labor rose." Zheng Shengzhong, manager of China Earthquake Island (Kampuchea), which has just opened third garment factories in Kampuchea, told reporters. "Many European and American customers who have worked with us for more than ten years have placed orders for us. We are required to build their factories in Kampuchea and reduce their purchasing costs. I understand very well, who does not want to get the goods at a lower price? "He said that the European Union announced the launch of the new GSP in January 2011, and that the garments produced in Kampuchea could be exported to the European market duty-free. The same is a $10 pants exported to Italy, the cost of "made in China" and "made in Kampuchea" is quite different. The price of the trousers made in China is 11.25 US dollars, while in Kampuchea it is still 10 dollars.
Although international investment in manufacturing in Southeast Asia has increased rapidly, Xu Changtai, director of Asian Research at Standard Chartered Bank, told reporters that this does not indicate a significant shift in manufacturing from China to Southeast Asia. He said foreign investment in manufacturing industry in Southeast Asia has risen, but it is difficult to ascertain whether these investments have been withdrawn from China, because foreign investment in China is still growing. Although foreign investment has slowed down in China, the main reason is that the global economic situation is grim and China's economy is slowing down rather than southeast Asia replacing China. Some international companies are seeking the possibility of diversity, mainly considering the rising cost of doing business in China and the risk of some countries taking protectionist measures against "made in China".
"Made in Japan" makes great efforts to cultivate Southeast Asia.
The shift of international manufacturing investment in China and Southeast Asia is most evident in the external investment of Japanese enterprises. From Bangkok to Thailand, there are many billboards on the way. One of them is MITSUBISHI electronics, Japan, which says "to serve the country and promote the development of manufacturing industry". It is not so much advertising as a strategic declaration of Japanese manufacturing in recent years in Southeast Asian countries.
In almost all the major supermarkets in Thailand, reporters found that there were various kinds of Japanese products (food, condiments, dishes, cooking utensils, etc.), which were various and abundant, as well as various kinds of sushi and Japanese snacks sold. There are even a large Japanese bookstore in downtown Bangkok. When a reporter asked a friend who worked in the Thailand chamber of Commerce, she knew that there were more than 50 thousand Japanese people working in Thailand. Most of them are executives and technicians from Japanese funded enterprises.
A recent survey in Japan showed that ASEAN has replaced China as the first choice for Japanese enterprises to establish overseas production bases, and Thailand has become the most important production site for Japanese auto companies in the world. Japanese automakers have invested 70%-80% in the automotive industry in Thailand.
Southeast Asia is one of the longest and most influential regions in Japan after the war. It is also an important raw material supply and marketing market for the Japanese economy. Since the mid 50s of last century, Japan began to establish a market through war compensation in Southeast Asia. In the 70s of last century, due to a large number of exports, Japan caused a serious deficit in Japan's trade with Southeast Asian countries, which led to bilateral serious trade friction. Since the 80s and 90s of last century, Japanese manufacturing industry began to shift outwards. Japan built its manufacturing base and expanded its local sales market, making Japanese manufacturing industry rooting and flowering in Southeast Asian countries.
The input of manufacturing industry has become a solid link between Japan and Southeast Asia. Last spring, when news of Japan was hit by an earthquake and tsunami, second days later, reporters saw Thai people walking to the streets to take the initiative to raise money for Japan. According to statistics, Thailand has donated more than 600 million baht (about 20 million US dollars) to Japan, mostly from the private sector. A Thailand columnist told reporters that Thailand's economy and Japan's economy are so closely linked today, Japan's disaster is the disaster of Thailand. It is easy to understand the meaning of this sentence just by looking at a Japanese car, motorcycle store and repair shop that runs all over Southeast Asia. Of course, the close interaction between Japan and Southeast Asia in manufacturing not only brings huge profits to Japanese enterprises, but also becomes an important factor to enhance Japan's national image in Southeast Asia.
Manufacturing in Southeast Asia is facing challenges.
Although 41% of Nike's sports shoes are produced in Vietnam, Vietnam's business community and some scholars are very pleased, but the investment of these international giants has not brought too much benefits to the Vietnamese people. In the survey, reporters found that the price of Nike shoes sold on the Vietnamese market is basically the same as the international market, and ordinary people can hardly afford it. For ordinary people who work for international capital, they earn money and sweat. Ruan LAN, 28, works in the tenth garment factory in the outskirts of Hanoi. The monthly salary is only 2 million 500 thousand Vietnamese shield (1 US dollars or 21 thousand Vietnamese shield), although this is higher than the government's highest wage standard, the company also provides free work lunch at noon. But she gave the reporter an account: riding a motorcycle to work, the monthly fuel cost is 500 thousand Dong Dong, the rent is 1 million 200 thousand Vietnamese Dong every month, the water and electricity fee is 300 thousand per month. My salary is not enough to support the basic life of my family. Therefore, the husband who worked with her in a garment factory originally had to quit her job and play odd jobs outside to support her family.
In fact, international giants like Nike move their production lines to Southeast Asia, mainly in order to make full use of their lower labor cost advantages and maximize their profits. Not long ago, Adidas was one of the biggest sponsors of the London Olympics because it only went to Kampuchea to produce London Olympic licensed products. Garment factory worker Paying 10 pounds a week is known as "sweatshop" and is currently being investigated by the London Olympic Organizing Committee.
Similarly, the development of manufacturing in Southeast Asian countries is also facing challenges. Because of the low wages of ordinary workers, many Southeast Asian countries frequently erupted in protest. After Adidas's "sweatshop" incident, the Kampuchea labor minister issued a circular saying that from September 1st, Kampuchea's textile, clothing and footwear factories should provide a monthly subsidy of $5, a full attendance award of $10, a transportation and accommodation fee of $7 per worker, and so on, so that the minimum monthly wage will reach US $83. The Vietnamese government has raised the minimum wage standard many times in recent years. The latest adjustment was in October 2011. Vietnam adjusted the minimum monthly wage standard of the 1 million 550 thousand foreign Dong shield previously stipulated to Vietnam to 2 million Vietnamese shield. Nevertheless, it has yet to meet the demands of Vietnamese workers. According to the Vietnam Textile Industry Union, the proportion of workers in large state-owned enterprises varies from 15% to 20%; in some small and medium-sized enterprises, the proportion of workers varies from 20% to 30%; in some foreign enterprises, this proportion is as high as 40%.
Jiang Jianhua, executive vice president of the Wenzhou chamber of Commerce in Kampuchea, told reporters that although the cost of labor in some Southeast Asian countries is relatively low, in fact, the management cost of Vietnam's clothing manufacturing enterprises is close to China's domestic market and has no great advantages. In addition, Vietnam's legal system is relatively backward, and the opaque taxation system is also a great constraint. The cost of clothing manufacturers in Thailand is too high, and many places even surpass China. The political situation in Kampuchea is relatively stable and cheap. But to invest in Kampuchea, we also need to pay attention to the problems caused by the backwardness of transportation infrastructure and the low quality of workers.
"Made in China" is rising
The international community is also very concerned about the shift of manufacturing industry from China to Southeast Asia. The latest report released by KPMG, an internationally renowned accounting firm, said that the rising cost of "made in China" forced multinational companies to find new investment locations in other parts of Asia. Due to regional integration and favourable terms of trade, many Southeast Asian countries are becoming more mature and will benefit from this recent change. However, the report believes that although clothing and footwear production is shifting to the entire Asia Pacific region, hard products from consumer electronics to furniture still come from China.
Chen Rui, vice president of China's strategic management consulting firm, told reporters that manufacturing industry does exist from China to Southeast Asia. For foreign capital, export oriented enterprises will move faster, and labor-intensive and resource intensive manufacturing industries will be transferred to Southeast Asia. But he also said that Southeast Asian countries are generally small, and it is impossible for a country to have a full industrial chain, and some manufacturing industries can not do so. In this respect, there are some structural complementary relations between China and Southeast Asia.
The latest report by the joint China World Trade Center development organization also believes that in the short term, FDI, which has invested in China's manufacturing industry, is stagnant, but China remains the most attractive foreign investment destination. Some market participants also said that the vast majority of Chinese manufacturing industries are also seeking their own way to upgrade their industries or seek development in the inland areas. China and other parts of Asia have begun to build closely linked supply chains. Some manufacturing industries still rely on China even after they are transferred, such as importing production equipment from China or relying on exports to the Chinese market.
A new coal-fired power plant in India, Hongkong, will soon be completed, according to the UK. But so far, no matter where India's power plants are built, the power plants installed in the power plants of more than 1 billion US dollars are purchased from the mainland of China. According to the report, China's manufacturing is rising along the industrial value chain, and the profitable and highly demanding power generation equipment has become another fortress for "made in China". The report said that despite the recent rise in the cost of "made in China", forcing export oriented enterprises to move to cheaper production bases overseas, China has an advantage in producing equipment such as turbines and more complex equipment.
Xu Changtai, director of Asian Research at Standard Chartered Bank, said it is not clear whether manufacturing will move to Southeast Asia. First of all, China's logistics infrastructure is still more competitive than many Southeast Asian countries. Besides, Chinese manufacturers are no longer just producing for export, and domestic demand is playing an increasingly important role in China. Therefore, we may not see that producers can reduce their investment in China, but increase their investment in Southeast Asia and other markets at a faster pace. Some market participants who contacted European and American companies told reporters that it is too early to say that manufacturing industry is transferring large scale to Southeast Asia. But China must also face up to the changes in its market supply advantages, and promptly adjust the passivity to take the initiative, which is more conducive to the development of China's economy.
- Related reading
Achieving Brand Strategy Positioning Is The Prerequisite For The Development Of Underwear Industry.
|- Market trend | Certification Standard System For Organic Textile Exports In India
- Equipment matching | 检测工业缝纫机伺服系统故障的方法
- Collocation | The Holiday Season Is Full Of Fashion, Summer Tide And Weekend To See The Sea.
- Market trend | Fuzhou Textile And Chemical Fiber Industry: Leading Position In Industry Development
- Market trend | Textile Industry: Expanding Domestic Demand And Gradually Playing The Role Of Domestic Demand Growth Is Expected To Increase
- Collocation | White T-Shirt + Jeans Wear Out Youthful Fashion Sense
- Market trend | Clothing Industry: A Win-Win Business With Brand Authorization
- Market trend | The Effectiveness Of Stable Foreign Trade Support Policy Needs To Be Observed.
- Collocation | Black Smoldering Fashion
- Fabric accessories | Problems In Application Of Water Fastness Standard For Textiles
- 伦敦街头达人透视装街拍
- Hunan Textile Industry'S Breakthrough After Difficulties
- Compared With The United States, Japan And South Korea, China'S Online Shopping Market Has Yet To Be Developed.
- Forecast And Analysis Of Development Trend Of Cotton Blending Technology In China In 2012
- Sporting Goods Industry Is Hard To Restart.
- Looking For Fashion Elements In Ethnic Costumes And Hui Accessories
- Achieving Brand Strategy Positioning Is The Prerequisite For The Development Of Underwear Industry.
- Lighting Up The 9 Most Luxurious Handbags Of This Season.
- 《VOGUE》美国版携运动明星拍摄平面大片
- 伦敦奥运会 体育品牌的争夺战