Guide to Invest in Shoes Manufacturing Industry of Chengdu
Aug, 2008
Content
I. Industry Status Quo 2
i. Industry Foundation 2
ii. Survey of the Industry Chain in Chengdu 6
1. Status Quo of the Industry Chain in Chengdu 6
2. Status Quo of Domestic and International Shoes Industry 8
3. Conditions for Chengdu’s Engagement in Shoes Manufacturing Industry Immigration 9
4. Key Development Points 11
II. Investment Environment 14
i. Human Resource 14
ii. Infrastructure 15
iii. Logistics Overview 17
iv. Requirements on Environmental Protection 20
III. Planning on Industrial Development 20
i. Industry Policies 20
ii. Industry Planning 21
IV. Influence of 5.12 Wenchuan Earth on Chengdu City Industry Development 24
i. Influence of Wenchuan Earthquake on Chengdu City 24
ii. Influence of Wenchuan Earthquake on Chengdu Shoes Manufacturing Industry 25
I. Industry Status Quo
i. Industry Foundation
In 2006, 1,700 shoes manufacture enterprises (including 1,100 plus woman shoes enterprises in total with their annual output of 140 million pairs, ranking the 3rd in China) and 3,000 plus auxiliary enterprises of shoes material existed in Chengdu. Chengdu’s shoes manufacture enterprises were mainly located in Wuhou District, Chongzhou City, Shuangliu County, Wenjiang District and Longquanyi District, etc., of which Wuhou District boasted over 80% shoes manufacture enterprises and 90% auxiliary enterprises and hence was awarded the title of China’s Woman Shoes City jointly by China National Light Industry Council (CNLIC) and China Leather Industry Association (CLIA) in Dec 2005.
The value added of Chengdu shoes manufacture industry for 2007 was 1.869 billion yuan, 80.6% over that for the last year, which accounts for 1.9% of the whole industrial value added of Chengdu City, 98.05 billion yuan.
鞋业 shoes industry
医药 medicine industry
石油 petroleum industry
建材 construction materials industry
食品饮料 food & beverage industry
电子 electronics industry
机械 machinery industry
其它行业 other industries
The income from core businesses of shoes manufacture for 2007 in Chengdu was 5.967 billion yuan, 88.2% over that for the last year, which accounts for 2.1% of the whole income from core industrial businesses in Chengdu.
鞋业 shoes industry
医药 medicine industry
石油 petroleum industry
建材 construction materials industry
食品饮料 food & beverage industry
电子 electronics industry
机械 machinery industry
其它行业 other industries
The profit tax from shoes manufacture industry for 2007 in Chengdu was 378 million yuan, 80.6% over that for the last year, which accounts for 1.2% of the whole industrial profit tax in Chengdu.
鞋业 shoes industry
医药 medicine industry
石油 petroleum industry
建材 construction materials industry
食品饮料 food & beverage industry
电子 electronics industry
机械 machinery industry
其它行业 other industries
The profit from shoes manufacture industry for 2007 in Chengdu was 324 million yuan, 1.47% over that for the last year, which accounts for 1.8% of the whole industrial profit tax in Chengdu, 17.89 billion.
鞋业 shoes industry
医药 medicine industry
石油 petroleum industry
建材 construction materials industry
食品饮料 food & beverage industry
电子 electronics industry
机械 machinery industry
其它行业 other industries
ii. Survey of the Industry Chain in Chengdu
1. Status Quo of the Industry Chain in Chengdu
Chengdu’s shoes manufacture industry is distributed with the center in Wuhou District, where enterprises solely dedicated to offer service to shoes manufacture enterprises cluster, including enterprises dealing in material supply, personnel training, information counseling, logistics and printing & packing as well as enterprises manufacturing shoe tree, insole, sole and so on. There are now 4 118000m2-plus shoes material markets, located respectively in Jinhua, Fushun, Wanlong and Shuangnan, 10 schools or branch schools offering training in shoes manufacture technology, and 160 logistics enterprises or agencies. The main part of the products are exported, to 35 countries of which Russia, Ukraine and other Eastern European countries take the larger part, among other things, the woman shoes exported from Chengdu account for 1/3 of that from the whole country.
Introduction to Representative Enterprises
Name / Survey / Output CapabilityAiminer Leather Products Co., Ltd. / Incorporated in 1996, Aiminer is a transnational group company integrating R & D, production and marketing. From 2002 to 2004, several subsidiary companies to Aiminer were established consecutively, respectively named, chronologically, Aiminer Leather Products (Guangzhou) Co., Ltd., Sichan Pheeou International Leather Products Co., Ltd., and Aiminer Leather Products (Europe) Co., Ltd. / 1.5 million pairs/year
Chengdu Guqi Shoes Industry Co., Ltd. / Incorporated in 1997, Guqi is a large enterprise integrating design, R & D, production and marketing of woman shoes of various kinds. The company has 2 modern standard factories, 1000 employees, 3 design teams consisting of 100 members and 4 advanced production lines successively introduced from Italy, Taiwan and other countries and regions. / 2 million pairs/year
Chengdu Meilidian Shoes Industry Co., Ltd. / Incorporated in 1991, Meilidian has 1500 plus employees and production value over 200 million yuan. In 2005, the woman shoes produced by the company with the brand of Lidian was admitted to the title of Sichuan Famous Brand by Sichuan Provincial Administration of Industry and Commerce and to the title of Sichuan Famous Brand Product by Sichuan Provincial People’s Government. / 1 million pairs/year
Chengdu Kameiduo Shoes Industrial Co., Ltd. / Incorporated in Aug 1995, Kameiduo is an enterprise integrating design & development, production and marketing of high or middle woman shoes, with its products finding huge markets all over the world. The company has established a sophisticated distribution network and set up over 500 bars in 20 plus provinces and cities throughout China. The company has employees over 3000 and R & D centers and production bases located in Chengdu and Guangzhou. / 4 million pairs/year
2. Status Quo of Domestic and International Shoes Industry
China enjoys the names of world’s largest shoes production base and the world’s second largest shoes consumption market, accounting for 22% of the consumption of the whole world And only second to the USA, and the world’s largest shoes exportation country, accounting for over 53% of exportation volume of the whole world. International shoes brands whose products have been produced and traded in China included ADIDAS, NIKE, GUCCI, HUGO, BOSS and D&G, etc. On the other hand, China has its own international brands, such as SENDA, KANGNAI, RED DRAGON, ANTA AND BELLE, of which 6 key enterprises have entered Chengdu market, say, Zhejiang Senqiao Shoes Town Investment & Development Co., Ltd., Zhejiang Industry Development Co., Ltd., Wenzhou Hongli Shoes Industry Co., Ltd., Pou Cheng Group, Taiwan Hexintai Group and Ford Group (Hongkong) Co., Ltd. Recently, many a number of international shoes industry giants (including Huajian Goup, Huarui Group and HongKong BOBWAY Group) think highly of the prospect of China’s Woman Shoes City in which they show great interest as well express their investment intent.
3. Conditions for Chengdu’s Engagement in Shoes Manufacturing Industry Immigration
A present, Chengdu features One Hub & Two Parks, i.e., Wuhou Shoes Hub, Chongzhou Shoes Manufacturing Industry Park and Jintang Shoes Manufacturing Industry Park, as its main areas for the development of shoes manufacturing and thus as the main destinations for Shoes industry migration.
(1) Located in the southwest of Chengdu and with the planned coverage of 5.5 square kilometers, Wuhou Shoes Hub is a feature industry park cluster integrating production base of famous-brand enterprise, training center, exhibition center, information center and R & D center in shoes manufacturing industry equipped with complete industry chains and complicated supporting service systems. In 2006, the hub was awarded the region brand, titled China’s Woman Shoes City jointly by China National Light Industry Council (CNLIC) and China Leather Industry Association (CLIA) in Dec 2005.
(2) Located in Chongzhou Centralized Industrial Development Zone and with the planned coverage of 11 square kilometers, Chongzhou Shoes Manufacturing Industry Park is an important production base of finished shoes, vamp leather and shoes materials, which has attracted a couple of famous shoes manufacturing enterprises, such as KANGNAI, KASEN and DESAI.
(3) Located in Jintang Industry Park and with its planned coverage of 7 square kilometers, Jintang Shoes Manufacturing Industry Park is a feature industry development zone cluster integrating production, trade and logistics in shoes industry and equipped with sophisticated industry chain, which is divided into 5 major divisions, i.e., that for shoes production, production of shoes metal fastener, shoes gluing, shoes industry personnel training and trade of shoe materials. The park has attracted nearly 100 enterprises successively such as Ford Shoes Materials, Wenzhou Jindi, and Taiwan Runda.
4. Key Development Points
A present, Chengdu features One Hub & Two Parks, i.e., Wuhou Shoes Hub, Chongzhou Shoes Manufacturing Industry Park and Jintang Shoes Manufacturing Industry Park, as its main areas for the development of shoes manufacturing, each of which has its own key development points.
(1) Wuhou Shoes Hub
The hub ranks itself as the high end core of Chengdu’s shoes manufacturing industry with its key development points being Five Major Center and One Brand Base, i.e., trade center, brand exhibition center, R & D and design center, training center, info and agency service center and brand production base. With such supporting systems, the hub mainly admitted enterprises dealing in trade, brand exhibition, R & D and design, training and info and agency service, etc. Besides, the hub has also attracted several domestic and international famous brand production enterprises.
(2) Chongzhou Shoes Manufacturing Industry Park
Set as key production base of finished shoes, vamp and shoes materials, trade market of shoes materials and center training technicians.
The park lays great emphasis on shoes manufacturing and aims to introduce coastal shoes manufacturing enterprises on a large scale till the ratio of those to all enterprises in the park reaches 25% odd; encourages enterprises with independent brands to set business here till the ratio of those to all enterprises in the park reaches 35% odd; supports, without stint, the development auxiliary enterprises, such as shoes materials enterprise, till the coverage of such enterprises reaches 30% of the whole planned coverage and strives to increase the proportion of auxiliary enterprises till the collaboration capability reaches 40% odd; and keeps boosting the construction of standard factories and shoes materials trade markets so as to meet the demands of the enterprises.
(3) Jintang Shoes Manufacturing Industry Park
Set as key production base of finished shoes and shoes materials and key base training technicians in shoes manufacturing industry in west China, and shoes material trade market of a fairly large scale.
The park takes developing shoes industry and shoes materials manufacturing as its main task. In fulfill this aim, it spare no effort to attract coastal large or medium enterprises dealing in shoes manufacturing and shoes materials; gives priority to Taiwan or foreign enterprises; and welcomes enterprises producing in the name of foreign famous brand enterprises to make the itself the largest cluster for shoes production in the way of authorized using of other enterprises’ brands. Besides, the park also sets its mind to forge a training center for shoes manufacturing workers with the largest scale, most inclusive in work types, highest level in west China.
II. Investment Environment
i. Human Resource
Sichuan, as a province, has an abundance of human resources to speak of, where competitive labor resource and labor cost are available.
Comparison in labor costs between Chengdu and other cities, 2007 (1)
Worker Rank / Guidance salary in Chengdu (in yuan) / Guidance salary in Shanghai (in yuan) / Guidance salary in Beijing (in yuan) / Guidance salary in Guangzhou (in yuan)Junior / 700-1350 / 1000-2400 / 1167-2250 / 840-1620
Medium / 800-1600 / 1400-3200 / 1333-2667 / 960-1920
Senior / 900-2100 / 1600-4500 / 2100-3500 / 1512-2520
Technician / 1000-2450 / 2000-6000 / 1333-3500
Comparison in labor costs between Chengdu and other cities, 2007 (2)
Executive personnel / Guidance salary in Chengdu (in yuan) / Guidance salary in Shanghai (in yuan) / Guidance salary in Beijing (in yuan) / Guidance salary in Guangzhou (in yuan) /Company executive / 2000-9000 / 8000-25000 / 7407-33333 / 5333-24000
Department executive / 1600-4500 / 5500-15000 / 5555-16666 / 4000-12000
Grass roots executive / 1100-3000 / 4000-10000 / 4074-11111 / 2933-8000
Office clerk / 800-2100 / 2000-6000 / 800-7777 / 576-5600
ii. Infrastructure
The infrastructure known as Seven Connections & One Leveling, saying, respectively connection of road, rain drainage, water supply, power, communication and natural gas, and leveling of ground, is required to be fulfilled as per international standards prior to handover to the investors.
Minjiang River water system is adopted as the water resource for waster supply to Chengdu City proper.
Main Parameters of the Urban Water Supply of Chengdu City
No. / Description / Status quo1 / Daily output of city proper (m3) / 2,200,000
2 / Daily supply of city proper (m3) / 1,380,000
3 / Water supply pressure of city proper (MPa) / 0.16-0.4
4 / Water resource quality standard / GB5749－84
5 / Standard for quality analysis of water supply / Above GB5749－86, a China national standard and equal to EECC (98), an EC standard.
Urban Water Supply Price in Chengdu City (including sewage treatment fee)
Water Type (classified based on purpose) / PriceHousehold / 2.15 yuan/ m3
Commerce/service and construction / 4.60 yuan/m3
Industry / 2.7 yuan/m3
Special purpose / 6.7 yuan/m3
Main Urban Power Supply Parameters in Chengdu City
No. / Description / Status quo1 / Transformer substation at 35 KV and above level / 86
2 / Master transformer / 145
3 / Transformer capacity / 5.30 million KV·A
4 / Power transmission line at 5 KV and above level / 165 (totaling 2700 odd km)
5 / Yearly power supply / 14.52 billion KW·H
Urban Power Supply Price in Chengdu City
Power Type (classified based on purpose) / PriceHousehold / 0.5224 yuan/KW·H (below 1KV, in normal-usage period)
Commerce / 0.8638 yuan/KW·H (below 1KV, in normal-usage period)
General industry / 0.6928 yuan/KW·H (below 1KV, in normal-usage period)
Large-scale industry (1) / 0.5308 yuan/KW·H (below 1KV, in normal-usage period)
Large-scale industry (2) / 0.5608/KW·H (below 1KV, in normal-usage period)
At present, the annual natural gas supply amounts to 3.0 billion square meters and the urban natural gas popularization rate reaches around 80% in Chengdu City.