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Chinese workers who used to be cheap and seemingly "unlimited supply" are becoming more expensive and more difficult to find. The picture shows that in order to attract workers, a shoe-making enterprise in Zhejiang has specially changed a batch of new machines, but it still suffers from the shortage of workers. (CFP/Picture) The attractiveness of Chinese manufacturing is declining because of rising costs. The consumer goods manufacturing industry is turning to Southeast Asia, while the industrial goods manufacturing industry is returning to the United States. However, the manufacturing was lost and the market was closed. The new story of the production base becoming a star market has just begun. A four-year rumor will become a reality at the end of October: Adidas will close the only Chinese direct factory in Suzhou, Jiangsu. Adidas also informed the other 10 foundries that the contract will be terminated. The official explanation of Adidas is "strategic considerations for reintegrating global resources." However, it is widely interpreted that, like its old rival Nike, this weather-oriented “migrant bird†company will shift its manufacturing base out of China in pursuit of lower costs, and more producers will follow. In addition to the departure of manufacturers of clothes and shoes, China is losing its appeal in the field of industrial products manufacturing, and the United States has become a new destination for these investments. In its 2011 annual report, GE proposed to withdraw its home appliance production line from China and Mexico to the US; Ford Motor will invest $16 billion in the US to increase its plants and production lines; Caterpillar, the world's largest manufacturer of excavators and bulldozers, was in 2011. Texas, USA, invested $120 million to build a new manufacturing facility; Google’s new player, the Nexus Q, is also produced in the United States. “The shift in US manufacturing has only just begun,†said MIT Levy, a professor of engineering at the Massachusetts Institute of Technology, to the Southern Weekend reporter. Not long ago, he spent two months investigating 108 companies in the United States with multinational operating agencies, 14% of which clearly planned to relocate some manufacturing operations back to the United States. Manufacturing to the United States In the past two decades, the United States and other Western capital flows to China is a common trend. These capitals are surging and strongly support the rise of the Chinese economy. This force is so important that it has even been criticized as "China suffers from foreign dependence." However, the question in the United States has been constant, and some people believe that the Chinese have taken away the jobs of American workers. According to a recent report released by the US Economic Policy Research Institute, "Between 2001 and 2011, the trade deficit with China caused more than 2.7 million jobs lost or replaced in the United States, including more than 2.1 million manufacturing." But changes are emerging. In June 2012, Starbucks ceramic cups began production in East Liverpool, Ohio, USA. "As part of Starbucks' Job Creation for the United States, we did produce some mugs in the United States recently." Starbucks officially responded to Southern Weekend reporters. Starbucks' first free soluble product manufacturing facility in the world is also located in the United States. The plant in Augustus, Georgia, will be completed in early 2014. Upon completion, the Starbucks VIA Instant Coffee, Fragrance Series coffee ingredients and some Starbucks ready-to-drink products will be produced here. Previously, these were produced outside the United States. "On the local production, after the US Starbucks store orders, it is not necessary to receive the goods in a week, but if it is placed in China, it will take three months from order to receipt," said a person at Starbucks. According to a report by MIT Engineering Professor Hitch Levy, an important factor affecting the relocation capacity of US companies is the supply chain. This includes both risk and cost: Thailand’s 50-year-old flood in 2011 caused Intel to lose $1 billion in sales, and the earthquake in Japan also caused GM to lose a lot. As for cost, Hinch Levy believes that 25% of the cost of the supply chain lies in the transportation sector, and oil prices have doubled from 2009 to 2011. “In 2003-2008, labor costs in China increased by 19%, while labor costs in the United States increased by 3%,†said Professor Hinch Levy. China's past advantages are changing under these new circumstances, and US-funded companies may consider that products supplied to the local market are produced locally. NCR, the world's leading ATM machine manufacturer, opened a new plant in Columbus, Georgia, in 2009, to produce products for the North American market – some of which were previously produced at the Beijing plant. NCR's Greater China Public Relations Department explained to Southern Weekend reporters that this is part of its “regional production model†implemented globally. The so-called regional production model refers to where to sell and where to produce. However, she said, "NCR has not transferred production from China to the United States, and has not reduced the number of factory employees and domestic investment." The same is done in the US consumer goods company P&G, Sweden IKEA. Adidas, based in Germany, has increased its manufacturing partners in North America, increasing its share from 10% in 2009 to 15% in 2011. And Obama’s stimulus policy has also become one of the reasons for the rising attractiveness of the United States. US federal and state government policies, such as corporate tax cuts and subsidies and support for research and development, have encouraged companies to relocate their production capacity. “U.S. companies are migrating capacity because of political and economic pressures,†Matt Olsen, vice president of Boston Private Banking and Trust, told Southern Weekend. However, he does not believe that China will lose its status as a manufacturing center. "For a period of time, China and the United States will not be threatened as the two major manufacturing centers." Eric Rusers, chief economist at Royal Bank of Canada Global Asset Management, also held the same judgment. He told the Southern Weekend reporter, "I think American companies are not mainstream in manufacturing, but we can conclude that the era of manufacturing transfer from the US to China in the past 30 years is coming to an end." Foreign Investment Research Department, Ministry of Commerce Director Ma Yu issued a warning, "This is a dangerous sign that deserves attention. This highlights the institutional difficulties faced by China's manufacturing industry, and there is a lot of room for national policy to explore." .jpg)
The "Ottoman" of a noodle restaurant in Wenling, Zhejiang Province is being cut noodles. This kind of noodle-cutting robot is nearly 20,000 yuan. The owner of the noodle restaurant said that "it can be used by half of the people." / (CFP / map) "Migrant birds" fly to Southeast Asia and Southeast Asia, is another option for capital. Upon receiving a notice from Adidas to terminate the contract, Sun Yingli was caught off guard. The contract period agreed by the two parties was originally due to end in 2015. Sun’s company has been working for Adidas since 1996, and the two parties signed a long-term cooperation agreement in 2006. It coincided with the golden age of Adidas production in China. In 2007, half of the Adidas Group's footwear products were produced in China. But then Adidas began implementing a strategy to increase the diversity of suppliers' regions. The 2011 annual report mentioned that some Latin American countries impose high import taxes on Chinese-exported footwear products, which is why Adidas has further decentralized its production base. By 2011, the proportion of Adidas Group's footwear products from China is still the largest, but it has been reduced to 35%. The growth rates of Southeast Asian countries such as Indonesia and Cambodia have increased significantly, and the latter’s share has doubled. “The closure of the Adidas Suzhou plant is a strategic consideration for reintegrating global resources. This strategy will help Adidas to better leverage our economies of scale and reduce complexity.†Adidas’ official response to Southern Weekend reporters is not leaking, trying to shut down The event cooled down. "The closure of the factory has nothing to do with the salary increase, and it has nothing to do with our inventory. At present, Adidas has a good inventory in China." But in fact, the secret of factory transfer lies in cost. In July 2008, Adidas global CEO Herbert Heiner told German media that in China, the wage standards set by the government have gradually become too high, and the company hopes to partially withdraw from China and move to areas where labor is cheaper. It was just four years ago that Heiner’s statement made the speculation that Adidas would transfer the production line. Compared with four years ago, China’s rising labor costs have intensified. “If we add social insurance, the average monthly salary of our workers here is more than 3,000 yuan. This has doubled compared with two years ago, but we still have no way to recruit workers, and the workers who have already recruited have a high turnover rate.†Li Xin (a pseudonym) is the middle layer of an Adidas foundry company in Fujian. In order to recruit, he is looking for help. Li Xin said that the proportion of his company's labor cost expenditure to turnover has increased from 12% two years ago to around 30%. On the one hand, China’s rising labor costs, on the other hand, the annual labor force of Indonesia, Vietnam and other Southeast Asian countries is about 1,000 yuan per month. The company where Li Xin is located has expanded overseas branches. The three factories have been in Vietnam. Indonesia has landed. Compared with Adidas, the old rival Nike shifts its production base to a greater pace. Since 2005, Nike has increased the proportion of Vietnamese factories in its manufacturing industry year by year. By 2009, Vietnam and China accounted for 36% of orders. After two consecutive years of overtaking, in 2011, the proportion of Vietnam rose to 39%, while China fell to 33%. This is not the first factory migration of Nike and Adidas. The “migrant bird†companies that originated in Europe and the United States are very sensitive to cost. In the 1970s, its main production base was in Japan. Due to the appreciation of the yen and the rising labor costs in Japan, they shifted their production bases to South Korea and Taiwan. In the 1990s, orders were transferred to mainland China for cost reasons. Today, Southeast Asian countries such as Vietnam and Indonesia have become new paradise. The migration of Nike and Adidas also led to the transfer of some Taiwanese-owned foundries. At the beginning of 2012, Jiu Xing Holdings, which is listed in Hong Kong, closed a processing plant in Dongguan and continued to increase its production capacity in Indonesia. UNIQLO, a casual clothing chain from Japan, also sees Southeast Asia as the next migration destination. In 1999, Uniqlo established production departments in Shanghai and Shenzhen. By 2007, 90% of Uniqlo products were made in China. However, after 2008, Uniqlo gradually reduced its dependence on Chinese manufacturing, and in 2011 China's share fell to 80%. This year's annual report shows that the company plans to actively expand production in other Asian countries in order to reduce costs, "the goal is to transfer one-third of production outside China." In addition to clothing sellers, food companies are also highly sensitive to price. A well-known food company in North America began to import products directly from overseas in the past two years. One employee of the company said, “Every product produced in China must have at least one or several backup countries. Once China loses its competitiveness, it can be immediately Transfer orders.†Not long ago, the European Union Chamber of Commerce in China conducted an investigation for EU companies in China. According to the survey, 22% of respondents said they are considering turning their investments to markets outside China. When asked about motivation, one of the main factors is the rising cost. According to the survey data, consumer goods companies are more inclined to evacuate than industrial goods companies, which is related to the former's more sensitive price. “Compared with industrial products companies, the production transfer of consumer goods companies is faster,†Li Xin said. “It can be basically completed in five years.†From the world factory to the world market "Ten years ago, we have 70% of the members' products are mainly exported, and 30% of the companies are facing the Chinese market," said Harry, the president of the American Chamber of Commerce in South China. "But now, this ratio is just the opposite. Although China's attractiveness as a manufacturing base is declining, its appeal as a market is rising. Southern Weekend reporters contacted several multinational companies such as Caterpillar, NCR, General Electric, Ford, Starbucks, Adidas, Nike, and Procter & Gamble. They collectively expressed their emphasis on the Chinese market. While moving more and more production bases outside of China, Nike, Adidas and Uniqlo have shifted China's positioning from production bases to core markets. Adidas announced the establishment of a new logistics center in Tianjin, which echoes the logistics center responsible for sales in Suzhou Industrial Park. Nike's path is exactly the same. In 2009, after Nike closed its Taicang factory, the only direct factory in China, it spent a lot of money to build a second-largest logistics center in Taicang, reducing delivery time by 15%. They also plan to open more stores and focus on China's second and third tier cities. These two old rivals have successively withdrawn production from China, but they have played the Chinese market as the main driving force. The temporarily behind Adidas Group, whose global CEO Herbert Heiner has increased to China in recent years, he regards China affectionately as "our star market." According to survey data from the European Union Chamber of Commerce in China, 74% of respondents believe that China is becoming more and more important in its overall global strategy. The report describes: “In the past, China was mainly a world factory, and today and in the future, China will become the ultimate world market for our products.†“Ten years ago, we had 70% of our member companies’ products, mainly export-oriented, and 30% of them The Chinese market." Twenty years ago, Harry, the president of the American Chamber of Commerce in South China, came to China. His South American Chamber of Commerce represents more than 1,800 US companies investing in South China. He said, "But now, this ratio is just the opposite."
Made in China: Lost Manufacturing Market