Footwear capital of the world looses its sheen

14 Oct '08

2 min read

A few years ago, on board a westbound train out of Wenzhou City, huge footwear factories could be seen everywhere on both sides of the railway lines. Business signs of "Chinese Shoes Capital" at intervals reminded people of the city which at its peak produced 40 percent of global shoes, of which, 60 percent was exported.

But now, many factories have stopped production and only a few idle watchmen are to be seen. Former president of Wenzhou Shoes Association Lin Jin Biao has this to say for the deteriorating situation; “Shoe making plants can no longer survive, due to many reasons, such as soaring prices of raw materials, RMB appreciation, deduction of export drawback.”

He added by lamenting that “adjustment of interest rates, rise in labor prices, rising costs of logistics and profit margins being compressed further are the main factors due to which it is becoming difficult for survival of the trade in Wenzhou.”

Some companies have started to move inland and have set up new plants there. At its zenith, rentals of manufacturing units in Wenzhou used to fetch Yuan 25 per square metre. Now it is down by more than 400 percent to just Yuan 6 per square metre.

Most of the enterprises are mired by financial troubles and most manufacturing unit owners have abandoned their main business of shoe manufacture and have shifted to greener pastures.

Fibre2fashion News Desk - China

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