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SBD Global/February 28, 2013/Finance

Increasing Labor Costs Forcing Nike To Relocate In China

China Business News reported a Guangdong shoe manufacturer for Nike "has cut its work force to 4,000 from 13,000 since the global financial crisis five years ago," according to WANT CHINA TIMES. The factory manager, surnamed Wu, said that the factory "has no recruitment plans even in the current hiring season after the Chinese New Year holiday." Rising labor costs and intense competition have put large sportswear companies, such as Nike and Adidas, "in a dilemma about slashing profits or making fewer products." Another Guangdong manufacturer who has contracts with Nike told China Business News that "it plans to raise quotes because minimum wages in China have skyrocketed over recent years." The manufacturer also admitted that it was "very likely to receive fewer orders" (WANT CHINA TIMES, 2/27).
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