Wenzhou Footwear Exports Face New Challenges To TTP

The economic and trade ministers of 12 countries, including the United States, Japan, Canada, Mexico, Australia, New Zealand, Singapore, Malaysia, Vietnam, Brunei, Peru and Chile, issued a joint statement declaring the end of the negotiations on the trans Pacific Partnership Agreement (TPP), which lasted for more than 5 years. All parties involved in the negotiations TPP Agreement reached basically the same. If the agreement comes into force, China's export economy, such as textile and clothing trade, auto parts and other fields, will face an impact, and China's exclusion is also widely discussed.

So, for Wenzhou's export enterprises, how does TPP affect geometry and how to deal with this challenge? Yesterday, Wenzhou customs held a press conference to conduct a comprehensive analysis.

The rise of Southeast Asian market is squeezed by the share of our market.

According to Wenzhou customs statistics, the export value of our city to TPP member countries was 21 billion 783 million yuan in 1~9 this year, an increase of 3.94% over the same period last year, accounting for 27.49% of the total export value of the city in the same period, accounting for 5.11% of the total export value to the TPP member countries in the same period. Wenzhou customs staff told China shoe net: "in recent years, we have received feedback from foreign trade companies in the enterprise survey, and some shoe enterprises in Wenzhou have clearly felt the competition from Southeast Asia in recent years. Even some American customers have been looking for suitable factories in Southeast Asia to prepare for the transfer of leather shoes orders to Southeast Asian countries.

After the entry into force of the TPP trade agreement, the Vietnamese market, for example, will enjoy zero tariffs or low tariffs on Vietnam's exports to the United States, and the price will be highly competitive. This may aggravate the transfer of traditional industrial export orders to Vietnam and other countries, resulting in further squeezing the share of labor intensive products in the international market.

In addition, according to the rules of origin of TPP, member countries' shoes and garments should enjoy tariff preferences and production links should be completed in member countries. In the light of the current situation, China shoe net Market investigators: Vietnamese local enterprises are unable to produce basic raw materials for shoemaking, such as leather, PVC, polyurethane and cloth, but according to the principle of origin of TPP, if they want to enjoy zero tariff, Vietnam may choose to import raw materials from TPP member countries in the future, thus affecting Chinese shoe manufacturers to export raw materials and semi-finished products to Vietnam.

According to the results of Customs investigation in Wenzhou, some garment enterprises in Wenzhou already have the intention to set up garment industrial processing zones in Southeast Asian countries, transfer the low-end industrial chain, and retain the high-end part of the industry chain in Wenzhou, thus breaking through the existing development bottlenecks and achieving further sustainable development.

US customers return Wenzhou brand Competitiveness is still in existence.

Referring to the impact of TPP on our foreign trade enterprises, Zhou Jinmiao, vice president of Kangnai group, said that he was calm. Zhou Jinmiao admitted that 1~3 months this year, Kangnai shoes exports have also been affected, and this impact is mainly reflected in the customer's hesitant attitude. "At that time, many American customers felt that if the future TPP was fixed, the footwear products of Southeast Asian countries would be cheaper, so they dare not place orders with us. However, in Southeast Vietnam and other Southeast Asian countries, we can not find manufacturers like Wenzhou shoe manufacturers that can meet their requirements, and come back to us because of their high recognition of Wenzhou's brand and quality.

From the analysis of Kangnai's experience, Zhou Jinmiao believes that TPP will have more or less impact on the export of our city. However, from the perspective of enterprises, Vietnam takes Vietnam as an example. Besides the cheap labor force, Vietnamese shoe enterprises still need to import raw materials from China, and they are far inferior to Wenzhou shoe companies in terms of management level, logistics cost control and so on. "So from the current situation, this effect is relatively limited, and TPP needs a longer landing process."

At the same time, Zhou Jinmiao also said that Wenzhou relies on the perfect shoes and clothing industry chain, as well as the first mover advantage in brand building, design and process, though it can still maintain certain competitiveness for a period of time, but the pressure is growing. In the face of the impact of TPP on the export of shoes and clothing industry in Wenzhou, the manufacturing industry in Wenzhou must transform to "smart manufacturing". Enterprises need to continuously improve their product innovation ability and service ability, develop towards the high-end of the manufacturing industry, and take measures to reduce production costs.

In recent years, the production cost of footwear industry in Wenzhou has increased, and the rise of labor cost is one of the main reasons. If enterprises can vigorously implement "machine substitution", through Intellectualization Research and development of equipment to reduce human input can greatly reduce production costs. Zhou Jinmiao said, like Kangnai group used in the middle and back machine, the original process needs five or six people, "machine substitution", the labor force is reduced, and production efficiency and production will not be reduced. In addition, he also suggested that Wenzhou enterprises could further increase their new product development and increase the added value of products so as to get rid of the low price competition and further enhance their competitiveness.