What Can I Do To Save Your Shoes In Dongguan?

Entering the Dongguan Houjie Town, the billboard of "world shoe base" is coming to the visitors to explain the history of the poor town's reform and opening up in the past thirty years.

Today, the shoe industry, once a brilliant industry, will face the risk of being eliminated.

"The key is the appreciation of the renminbi, the increase in labor costs and the rising prices of raw materials and other factors."

As a shoe industry has said, the dilemma of Dongguan footwear industry today stems from complex multiple factors, and the profits caused by the appreciation of the renminbi are eroded, and the uncertainty of the appreciation expectation will compress the survival space of this tiny profit industry to the maximum.

When will the appreciation of the renminbi come to the end? It will become a shadow of the traditional Chinese export industry and the owners of the business.

No doubt, the continued strength of the renminbi will give the export industry different growth opportunities, and will aggravate the survival of the fittest within the industry. By adjusting the factors such as the appreciation of the renminbi, optimizing the export industrial structure and promoting the upgrading of traditional industries, it is also the potential expectation of the government.

However, are export shoes and related industries really ready and capable of meeting challenges?

This has become a matter of concern to all relevant government departments, and is also a question accumulated by reporters in a multi day investigation.

For the powerful large shoe enterprises, the unfavorable factors such as the continued strength of the RMB are both challenges and opportunities. But for small and medium-sized shoe enterprises with a percentage of 70% or 80%, more challenges and crises are involved.

Because of the lack of competitive advantage, they rarely pfer the space and capital, and the so-called "unsustainable" countermeasures are also very passive and difficult to achieve.

Complaining and fear become the most common attitude of these entrepreneurs to RMB appreciation and uncertainty.

In Houjie District, a building similar to the residential buildings hidden in the bottom of the alley may be the common premises of three or four small and medium-sized shoe enterprises.

Such shoe factories and practitioners are thousands or tens of thousands of shoe bases in the Pearl River Delta, Jiangsu, Zhejiang and Chengdu.

It is precisely these small and medium-sized shoe enterprises that only have dozens to hundreds of people, who occupy 70% to 80% of the number of shoe enterprises, creating a value that may be less than 60%, and survive.

They do not care about the core technology, but also have no monopoly advantage. They still rely on extensive growth. When they are wolf, they are the most vulnerable groups.

The government advocates industrial gradient pfer, but most of them do not have the idea of leaving Dongguan. They have accumulated many years' experience and connections and mature industrial chains.

They do not have the strength or power to move to the mainland provinces, let alone Vietnam, "stick to" Dongguan, or close down, or turn around on the spot, are more likely to become the three main directions of these shoe factories in the future.

The government hopes that these traditional industries will take the road of upgrading, extend to the two ends of the industry -- Design and sales, create independent brands and innovate technology, but for them, these are also too far away.

Since the reform in July 2005, the worries about the appreciation of the renminbi and the advantages of "made in China" have always been accompanied by worries.

Although the government hopes that the appreciation of the renminbi and a series of foreign trade policies will greatly push the industry from "extensive" to "intensive" and promote industrial upgrading or pfer, but as a government official has said, the formulation of the RMB exchange rate policy and series of foreign trade policies should take into account the affordability of the real economy. The key is how to guide these extensive small and medium-sized enterprises to land safely and maintain the stability of the market and society. This is a problem that local governments at all levels should consider.