Vietnam Has Replaced China As The Largest Production Base For Nike Shoes.

In fiscal year 2010, Vietnam produced 37%.

Is China's labor costs rising? The status of the world's factories is weakening. This is an indisputable fact.

Looking back at the annual reports of Nike, you will get some inspiration.

Nike's sports shoes are all outsourced.

The annual report shows that in 2001, China produced 40% of its shoes, ranking first in all countries, while Vietnam accounted for only 13% of the total. In 2005, China's share dropped to 36%, ranking first, Vietnam rose to 26%, and second; in 2009, China and Vietnam ranked first, 36%; in 2010, Vietnam exceeded China, accounting for 37%, and China retreated second, accounting for 34%.

According to the introduction of Nike website, sports shoes are more sensitive to labor costs. Enterprises must control labor costs within 24%, so that they can be competitive.

Therefore, over the past 30 years, Nike's production base has been migrating like a migratory bird, complying with the changes in its cost.

According to Nike website, the earliest Nike factory was located in Japan. With the increase of labor costs and the appreciation of the Japanese yen, the production base moved to South Korea and Taiwan, China.

Later, the cost of Korea and Taiwan came up, and Nike began to move its production base to Philippines, Thailand, Malaysia and Hongkong of China. At the same time, it looked into the future long term production base, and chose China after comparing China and India.

In 1981, Nike began to produce sports shoes in China.

In the next 30 years, China quickly became the biggest producer of Nike sports shoes until 2010.

As can be seen from the above table, Indonesia's share has dropped in the past 10 years, but it still maintains a considerable share.

By 2010, Indonesia accounted for 23%, and the first three had reached 94%.

The share of countries such as Thailand and India is negligible.

The year mentioned in this article refers to the financial year.

Nike's fiscal year ended in May 31st.

The fiscal year 2010 refers to June 1, 2009 to May 31, 2010.

Nike announced its fourth quarter of fiscal year 2011 in June 27th, but has yet to disclose data on the share of global production base.

So the data used in the 2010 fiscal year is a year ago, but it should not affect the conclusion.

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Vietnam issued Notice No. 96 to encourage the development of shoemaking industry

According to the website of Vietnam's voice, the Ministry of finance of Vietnam issued a Notice No. 96 recently, and decided to give corresponding financial policy support to the auxiliary industries such as machinery manufacturing, electronic information, automobile manufacturing and assembly, textile, shoemaking and hi-tech.

In accordance with this notice, since August 18, 2011, the machinery and pmission tools used in the technical production line have been exempted directly from the import tax on the production of software products but the goods and materials that are not yet produced at home; and the import tax on imported materials directly used for scientific research and technological research and development activities.

The above exemption policy applies equally to the expansion of related projects and the renewal of technological processes.

The notice also stipulates that the imported poverty-stricken areas shall particularly encourage the production of raw materials, materials and spare parts that are not yet produced by the investment projects, and exempt from the import tax for 5 years from the date of production.

In addition, the enterprises in the high technology field will also enjoy preferential corporate income tax policy.