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SBD Global/July 18, 2013/Finance

China Losing Shoe Orders To Southeast Asia Due To Increase In Manufacturing Costs

The Asia Footwear Association said that Chinese shoe manufacturers have lost 30% of orders to factories in Southeast Asia since '08 "due to the increase in manufacturing costs," according to Liu Xiaozhuo of CHINA DAILY. AFA Secretary General Li Peng said that China's labor costs "have increased rapidly" after the financial crisis of '08. The salary of Chinese shoemakers has "gone up 3.5 times" from '03 to '13. Pou Chen Group, "the largest athletic and casual footwear manufacturer in the world," is a manufacturer for major int'l brands such as Nike, adidas and Reebok. Pou Chen transferred parts of production from China to Indonesia and Vietnam last year, and in '13 "the company continues to adjust the distribution of its production capacity on the Chinese mainland, Indonesia and Vietnam to reach a balance." Statistics released by Pou Chen "show that it had 204 production lines on the Chinese mainland" by the end of '12, down from 255 at the end of '11. Meanwhile, "its production lines in Indonesia and Vietnam have been increased" from 134 to 157 and 140 to 156, respectively (CHINA DAILY, 7/17).
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