China: shoe factories in transformation with digital technologies, 3D printing and outsourcing

Beijing pursues an all-round strategy to achieve global primacy by 2049. From the new silk roads to the creation of international free trade areas. Although it aims to ‘create links, not dependencies’ with the foreign countries receiving the investment, the weakness of industrial sectors that do not have a fully integrated value chain is finally confirmed. Examples are Argentina, linked for the umpteenth time to debt and unable to develop a truly sovereign economic policy, or Pakistan, beneficiary of a 6 billion economic rescue financed by the IMF, which is managing an economic crisis also linked to the coronavirus pandemic, which has caused at least 30 thousand deaths and infected 1.2 million people.

2022 August, 16th update

China: shoe factories in transformation with digital technologies, 3D printing and outsourcing. China’s footwear exports rose 31.4% year-on-year to 173.7 billion yuan ($25.76 billion) in the first half of 2022.  @ChinaDaily says that this has been possible thanks to the rebound in post-Covid 19 demand and the speed with which Chinese shoe factories have moved from face-to-face commercial operations and production with analog technologies, to the adoption of online sales, 3D, digital technologies along the entire value chain and outsourcing.  [Shoemakers, clients work out details via video link, 3D printing – CD]. (Read more)

2022 August, 2nd update

Manolo Blahnik wins the legal battle for his Chinese trademark. The theme is also present on the @FinancialTimes.  The well-known British luxury shoe company Manolo Blahnik won a long legal battle that began in China in 2000 against Chinese entrepreneur Fang Yuzhou, who had registered the brand name to sell his own line of shoes. For this reason, in China you could legally buy Manolo Blahnik branded shoes, but they were not original products: these were only found by third-party retailers. (Read more)

2022 July, 27th update

China’s Economy Records 0.4% Growth, Weakest Since Wuhan Lockdown. The growth of the economy has slowed down a lot, and according to @IlPost the fault lies with the continuous lockdowns wanted by the government. In the second quarter of the year, between April and June, the Chinese economy achieved its worst result since the beginning of 2020, when the country was hit by the first wave of COVID-19, and the second worst result in over thirty years. [The “zero COVID” strategy has hurt China – The Post]. (Read more)

2022 July, 7th update

Value chains: China promotes BRICS partnership with Global Development Initiative. “Where is the world headed: peace or war? Progress or regression? Opening or insulation? Cooperation or comparison? These are the choices of the times we face,” Chinese President Xi Jinping said Wednesday in his opening speech ceremony at the BRICS Business Forum. [BRICS cooperation injects vitality into global development, wins worldwide applause – People.cn]. (Read more)

2022 June, 29th update

Chinese industry in recovery. The machine and equipment manufacturing industry markedly rebounded in May of this year. The decline in the index of service production has slowed, and modern service industries have supported growth. Sales in the market increased in the month, and sales of basic consumer goods and online retail sales continued to grow. (Read more)

President Biden is considering lifting tariffs on Chinese products that have contributed to rising prices of shoes and other consumer goods. Easing these tariffs, which were introduced by the Trump Administration, would be in line with an effort to mitigate the rampant inflation across the U.S. Consumer prices rose by 8.6% in May compared to a year ago, according to the Bureau of Labor Statistics. 99% of all footwear sold in the United States is imported. Import tariffs force retailers to raise prices without any benefit to the local industry. (Read more)

2022 June, 23rd update

Global supply chain crisis fuels push to local manufacturing as China’s appeal dims. A comment from the Guardian on the United States trying to ease dependence on China since pandemic lockdowns sparked a global supply chain crisis. However, the number of delayed shipments from China to the United States has declined lately, stabilizing around 35 %. But it is also higher wages that could reduce China’s global competitiveness as a manufacturing base. (Read more)

2022 May, 18th update

China: the latest lockdowns could be a catalyst for change in consumption with permanent effects. Luxury shopping malls in Shanghai remain closed. China’s zero-COVID policy has put the country’s commercial capital of 26 million people on lockdown. Frustration grows as people confined to their homes reach what has been described as an “emotional turning point.”. [What the Shanghai Lockdown Means for Luxury – Jing Daily]. (Read more)

2022 May, 9th update

Rapidly deteriorating trade between the United States and China. At the Sourcing Journal Global Outlook Conference, two experts gave insights into one of the most complicated and significant geopolitical issues dividing the world’s two largest economies. Topping the key issues are punitive tariffs between the two nations. Steve Lamar, president and CEO of the American Apparel & Footwear Association (AAFA), said legislation pending in Congress is focused on more enforcement and tools to deal with China. [‘Hand Wringing’ and ‘Finger Pointing’ Define US-China Trade – Sourcing Jpurnal]. (Read more)

2022 May, 4th update

China’s Q1 shoe exports up by 20%. According to customs statistics reported by China Economic Net, import and export of goods in the first quarter of 2022 was 9.42 trillion yuan, an increase of 10.7% year-on-year. The export of labor-intensive products was 900.05 billion yuan (+10.9%): luggage, shoes and toys increased by 24%, 20.4% and 16.9% respectively. (Read more)

2022 April, 4th update

Russia-Ukraine conflict affects the foreign trade of China. Wenzhou City Government investigates on key industries and foreign trade enterprises affected by the war between Russia and Ukraine, and takes measures to help reduce the losses of enterprises, such as holding online trade fairs, expanding market with the Regional Comprehensive Economic Partnership, and monitoring the conflict to avoid further losses. (Read more)

2022 March, 29th update

Yue Yuen recovered in 2021 with a net profit of $115.1 compared to a loss of $90.8 million in 2020. Revenue of $8.53 billion increased 1%, compared with the previous year, with the solid recovery seen in the first half of 2021 largely offset by the disruption to manufacturing operations in Vietnam and weak retail sales in the second half of the year. [Yue Yuen Returns To Profitability In 2021 SGB Media]. (Read more)

Covid, China in lockdown again. The Sourcing Journal reports on further price increases and delays in logistics. Lockdowns across China have created new supply chain uncertainties, but one factor that’s become clear: shippers can expect a rise in rates once restrictions are lifted and operations resume. (Read more)

2022 March, 23rd update

Chinese become a major force on the duty-free market in the Asia-Pacific region. Chinese is the main consumer in the duty-free market in the world, especially in the Asia-Pacific region. Since the outbreak of COVID-19, the number of Chinese outbound tourists has decreased significantly, which has brought a big blow to the overseas tourism retail market. [Fonte: China Leather Association – Autor: Ran Fulin 10/03/2022]. (Read more)

2022 March, 21st update

Positive role of RCEP in China and ASEAN leather industry. The trade value between China and the ASEAN leather industry in 2021 reached $16.47 billion, ranking 3rd with 15% of the value, and only lower than the EU (21.9%) and the United States (19.0%). The entry into force of the RCEP will have positive implications for bilateral industrial cooperation and economic and trade in the leather sector. (Read more)

Chinese investments in Cambodia have brought technologies and socio-economic development. Cambodia attracted $2.32 billion in investment from China last year, up 67% from $1.39 billion, according to a report by the Cambodia Development Council. China is the largest foreign investor with 53.4% of cambodia’s total $4.35 billion last year. [Chinese investment in Cambodia rises in 2021 despite pandemic – Xinhua]. (Read more)

2022 February, 26 update

China’s footwear exports increased by 35% in 2021. China’s footwear exports increased by 35% in 2021 According to the Ministry of Commerce 2021, China’s export of shoes and boots was US$47.9 billion, a year-on-year increase of 35%. The supply chain of the footwear industry chain has shown strong resilience. [China Exports of Footwear (customs) – January 2022 Data – Trading Economics/CLIA]. (Read more)

February 17th, 2022 update

Beijing has signed a major trade agreement with Argentina. Alberto Fernández seals the adhesion to the Chinese Silk Road and promises agreements for 23,700 million dollars. This was announced by the Argentine Government. However, the government imposes measures to curb imports from China: each pair of shoes cannot enter the country for less than 15.70 USD, to encourage investment with local producers. (Read more)

Trade between Pakistan and China increases: focus on leather Pakistan’s exports to China increased by 69% to $3.6 billion in 2021. Conversely, imports from Beijing rose 57.8% to $24.23 billion. Exports of leather products from Pakistan to China increased by 9.41% in the first half of 2021-22 on an annual basis. [Exports to China surge 69pc to $3.6bn in 2021 – DAWN]. (Read more)

2022 February, 9th update

Chinese manufacturing activity slowed this January, thanks to a return of COVID-19 and severe lockdowns that cut off supplies. The National Bureau of Statistics Manufacturing Purchasing Managers Index fell to 50.1 from 50.3 in December. Reuters reports that the PMI remained above 50 points, but government data contradicts a private survey, which shows that factory activity has declined at the fastest pace in 23 months. (Read more)

China rebounded strongly from the pandemic, but growth is losing momentum while remaining overly dependent on support from investment and exports. Latest IMF Country Focus by Chang Yong Rhee, Helge Berger and Wenjie Chen looks at how China can transition to sustained high-quality growth that’s balanced, inclusive and green. (Read more)

2022 February, 2nd update

China exported 7.9 billion pairs of shoes and boots in the first 11 months of 2021, which literally means that the country exported a pair of shoes for every person on the planet. However, according to the Global Times, such a large sector has lost about 430 billion yuan ($67.8 billion) in exports over the past seven years compared to export orders in 2014, according to data platform Wind. (Read more)

2022 January, 29th update

China is playing a leading role in digital, and to play a major role in future data exchanges it will build a “free trade port for data” in the Nansha district (in Guangzhou, Guangdong), which will include a data center, a big data industrial park and a communications lab. (Read more)

On the trade front, it cashes in on the launch of the Regional Comprehensive Economic Partnership (RCEP), which went into effect Saturday, Jan. 1, involving 15 countries including Southeast Asia, Oceania and Japan. The world’s largest free trade area, according to Beijing, “will act as a ‘powerful lever’ to keep trade and foreign investment stable in 2022 and expand exports of Chinese products, helping to accelerate the country’s industrial transformation.” (Read more)

Morocco-China Silk Road. Beijing insists on the Silk Road Initiative (BRI – Belt and Road Initiative) and at the beginning of January signed with Morocco a plan for the joint implementation of projects linked to the BRI. The commercial objective is the port of Tangier, the goods distribution hub of the African continent, and the construction of a technology hub in the Ain Dalia district. (Read more)

In Indonesia, Southeast Asia’s largest economy, China is promoting PT Kalimantan Industrial Park Indonesia (KIPI), a green industrial zone that will cover 30 thousand hectares and involve a consortium of companies from Indonesia, China and the United Arab Emirates. (Read more)

As China maintains leadership in international value chains, imports of Chinese leather for processing are expected to continue to rebound vigorously, driven by increased consumer demand in the global market. Already between January and July 2021, China’s leather imports totaled $1.3 billion, up 34% from the same period last year. (Read more)

However, the Chinese government’s decision to put entire cities on lockdown after the discovery of a few dozen positive coronavirus cases (the so-called “zero-covid strategy”) is worsening the “supply chain” crisis and aggravating delays in shipping, on which much of global trade is based. (Read more)