Industrial Upgrading Decides The Success Or Failure Of Garment Enterprises' Structural Adjustment.

In China's economic pformation strategy, industrial upgrading is a very important step, and even can determine the success or failure of structural adjustment.

But under the "high cost" factor, how can the industrial upgrade be realized?

July 18th, sports

Adidas confirmed that Adidas will close its only own factory in China later this year because of the strategy of reintegrating global resources.

The factory is located in Suzhou Industrial Park, and is a wholly owned subsidiary of Adidas group 100%.

Allegedly, as China's wage standards gradually improve, Adidas hopes to "move the production line to Southeast Asia with lower labor costs" and is likely to move to Burma.

Adidas's relocation is not a case.

In recent years, many enterprises have moved out of China due to cost factors.

In March 2009, Nike (Nike) closed its only footwear factory in China, and 1400 workers were forced to disband and the factory moved to Vietnam. In 2011, the mainland underwear listed company, dilis, said that it planned to move some of the high cost production lines to China, expand its production in Thailand, and invest in new factories in Kampuchea. The Japanese sports shoes enterprise ASICS will also mainly produce in Southeast Asian countries, and will not increase production orders in China. Its total overseas production in Vietnam and Indonesia will increase from 40% in 2010 to more than 60% in 2015; the Japanese large retail group UNY is in China.

The proportion of production will be reduced from 74% now to 65% in 2013, while the proportion of production in Thailand will increase, and this year it will also be produced in Bangladesh.

An important reason for these enterprises to close their factories in China is due to cost considerations.

The increase in cost is a huge change in China's market in recent years.

For a long time, the biggest comparative advantage of China in the process of globalization is low cost. In the cost factor, labor cost is an important part.

However, this situation is undergoing a historic change.

With the disappearance of China's demographic dividend and the increase in labor costs, many low-end manufacturing industries that China has built up in the past are facing challenges.

In recent years, the minimum wage has been raised everywhere in China.

Statistics show that the minimum wage in China is two to three times that of India.

Some research institutions have assessed the minimum statutory wages and related mandatory welfare expenditure stipulated by 15 developing countries in Asia, indicating that China's labor cost (including wages and welfare costs) ranks third among developing countries in Asia, ranking only after Malaysia and Thailand.

Obviously, since the revision of the labor law in 2008, Chinese workers have entered the ranks of the highest income in Asia.

According to the 12th Five-Year plan, the minimum wage will be doubled by 2015, which means that China's labor costs will also increase significantly.

No wonder some foreign enterprises exclaimed: "made in China is starting to become expensive!"

In fact, the rise in labor costs is only one reason why China has become more expensive.

In recent years, the rapid development of urbanization is also an important factor to drive up the cost.

It should be noted that China's urbanization process is closely related to the "land economy" model.

According to the research and analysis of China's "post land economy" by Chen Gong, chief researcher of Ampang, in the era of land economy, the so-called "GDP orientation" in China has actually become "real estate oriented", and economic development has been reduced to real estate in the industry.

Real estate is important for urbanization, but the excessive development of real estate has greatly pushed up the cost of various places.

In many cities in eastern China, if the government does not give preferential policies, many manufacturers will not be able to stand on their feet.

Even if factories are built, workers can hardly survive and take root in cities.

The high cost of rapid urbanization not only inhibits the manufacturing industry, but also influences the service industry.

In Tongzhou District, Beijing, because the real estate bubble is too serious, when the area wants to develop business and other service industries, the government and the market are unable to bear the cost of real estate pformation.

Some officials sigh, "Tongzhou has been unable to develop other industries, only to engage in real estate".

In China's economic pformation strategy,

It is a very important step, and it can even determine the success or failure of structural adjustment.

Whether it is developing new industries or pforming old industries, they can not bypass the high cost of cities.

But how can we achieve industrial upgrading under the "high cost" factor?