Shoe makers flee S China as golden era ends, but export value rises

Tag : closed shoe
Although almost half of the shoemakers in southern China's PearlRiver Delta closed in the first five months of 2008 and the numberof pairs exported fell, the value of exports jumped, customsfigures released on Monday show.

Additionally, industry officials said that big producers weregetting bigger and small ones were seeking out niche markets, whilethose in the middle ranks were largely being driven out.

The world's largest footwear production region, located inGuangdong Province, lost 2,331 shoe firms between January and May,but exports rose 9.4 percent to 3.97 billion U.S. dollars, thecustoms office in Guangzhou, the provincial capital said.

The closures left 2,428 shoe producers, who shipped 1.35 billionpairs of shoes overseas in the first five months, down 15.5 percentyear-on-year.

China Customs attributed the exporters' exodus to pressure from theappreciation of the yuan, the Chinese currency, and soaring wagesand labor costs, which crimped profits.

Asian Footware Association secretary general Li Peng said that 62shoe makers now account for half of the export orders placed inthePearl River Delta region. They saw a combined increase of 16.5percent in export value in the first five months.

Meanwhile, he said, "small and nimble producers are rapidlyadjusting their production to explore new export markets, grabbingsmall orders from Russia, the Middle East and Africancountries."

He said that mid-sized plants employing 800 to 3,000 workers werebeing battered worst in this round of market adjustment.

Many shoe makers have been adjusting their sales strategy byshifting their focus from exports to domestic sales, said WuZhenchang, a shoe businessman in Guangdong.

He said he believed that this round of industry restructuring willhelp eliminate weak companies and drive up the unit price ofChina-made shoes.

The shoe industry in Guangdong experienced a golden era from 2001to 2007, when the value of shoe exports more than doubled from 4.3billion U.S. dollars to 9.2 billion U.S. dollars.

Source: Xinhua