It is hard to deny the fact that the fact that multinational corporations such as Nike and Adidas move to look for new production bases will cause China to
lose many job opportunities,losing huge taxes , slow down technical innovation, new production technology as well as a healthy competitive environment.
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Nike and Adidas: From Made in China to Made in Vietnam
In recent days, domestic and international press and public opinion have been actively discussing the issue, Vietnam surpassed China to become the production base for Nike and Adidas products the most.
Worried about the trend of global shifting, especially when more and more world giants decide to shift production from China to Vietnam, Chinese scholars and online communities even reassure themselves that "don't be afraid", because this wave is only temporary, and the country of more than 1.4 billion people still has many other opportunities to "turn the tide", reasserting its position as the world's leading manufacturing factory. of their own, despite the Covid-19 pandemic or trade conflicts, competing head-to-head between the US and China.
As Sputnik stated in the previous report, in the early days of January 2022, many mainland Chinese and Taiwanese media outlets were all agitated and worried about China being "surpassed" by Vietnam, becoming a country. manufacturer of the most Nike and Adidas products.
China's De Nhat Tai Kinh (Yicai) in an article titled "Who is making the most Nike shoes?" affirmed that, in just 10 years, Vietnam has replaced China.
Before 2010, China gradually confidently rose to become the world's leading factory. This country is also the country that produces the most Nike products globally. But after a decade, the chessboard seems to have been reversed. China lost that proud position to Vietnam.
The situation with Adidas is similar, currently, 40% of footwear is produced in Vietnam. Notably, in 2013, Vietnam replaced China as the largest production base for Adidas shoes.
At that time, 35% of Adidas shoes were made in Vietnam, while China accounted for 31%. At the same time, the corresponding production rate in Vietnam has increased to 42%, China is only 15% in 2020, showing a clear shifting trend.
“If Chinese customers choose to buy a pair of Nike sports shoes at the store, it is very likely that the product they choose is made in Vietnam "Made in Vietnam", emphasized Yicai.
Chinese experts, media and netizens have reason to worry because the trend of global shift is getting stronger and stronger. It is the recent Covid-19 pandemic, the prolonged and fierce US-China trade war, which has reminded American companies and the world's leading multinational corporations that they cannot forever depend on Beijing and the global market. China's billion population.
The Chinese are also searching for answers, after all, what forces pushed Nike and Adidas from "Made in China" to "Made in Vietnam"?
"What has China lost in the increasingly strong global shift of this manufacturing industry?" asked De Nhat Tai Kinh.
"Do not panic"
As Sputnik mentioned, Nike's financial report for 2021 shows that Vietnam has replaced China as the largest manufacturer since 2010. Along with Indonesia, the world giant has no longer attached to it. China.
The world's largest sportswear brand, Nike does not have its own manufacturing plant. This group mainly hires manufacturing plants outside the US, whichever country has more open-door policies, open investment, favorable geographical location, potential market, and reasonable labor costs. more attractive to "eagles" like Nike.
China is worried when Vietnam becomes the "promised land" of Nike and Adidas
Over the years, Nike's proportion of factories in Vietnam has continuously increased. Statistics show that 50% of Nike shoe products are manufactured in Vietnam in the year and in 2021, this percentage will increase to 51%. At the same time, China's share of production has gradually decreased from 35% in 2006 to 21% in 2021.
Chinese experts admit that the gradual withdrawal of Nike, Adidas and international sports product brands from China will have a negative impact on the Chinese manufacturing industry. In general, the trend of global shifting when the big players leave China for Vietnam or neighboring countries is difficult to avoid, but this is still a loss for Beijing as well as the market of billions of people.
It is hard to deny the fact that the fact that multinational corporations like Nike and Adidas move to find new production bases will cause China to lose many job opportunities, huge taxes, slow down the economy. technical improvement, new production technology as well as a healthy competitive environment.
At the same time, according to Mr. An Quang Dung, from the Credit Management Committee of the China M&A Association, the transformation of production links of brands like Nike will have a significant negative impact on the manufacturing industry. Made in China and domestic brands.
“The gradual relocation of factories to Vietnam will have a huge negative effect on China. Especially, for the domestic footwear industry, it will also lose the opportunity to raise levels in technology, marketing, and management by competing with leading global corporations," worried Mr. An.
Mr. Cheng Weixiong, CEO of Shanghai Liangqi Brand Management Company, analyzed that this moving trend is inevitable and China should not be too alarmed.
"China's processing, manufacturing and manufacturing industry has undergone initial development steps and now needs to be upgraded to a new level," Mr. Cheng reassured.
Chinese experts also believe that the partial shift of the production line will not be an "earthquake" for the mainland's domestic footwear industry because the domestic production capacity can fully meet the demand. demand for domestic consumption as well as for export.
Why did the world giant choose Vietnam?
There are many reasons that can explain the story that for the first time Vietnam surpassed the world's leading manufacturing factory, China became the world's largest producer of Nike products.
The British Guardian newspaper said that Vietnam is emerging as one of Asia's leading important production centers, playing a large role in the global supply chain, especially in technology and apparel products. , footwear and sportswear.
Favorable geographical location, tax incentives, and cheap labor are strengths that help Vietnam compete in attracting FDI with China as well as becoming a "promising land" for investors.
The Chinese press said that, first of all, Vietnam has a preferential corporate income tax policy for manufacturing companies since January 2015. Accordingly, foreign investors are entitled to many related preferential policies, corporate income tax that meets a number of conditions is exempt for the first 4 years, 50% reduction of payable tax for the next 9 years and 10% for the next 15 years.
Along with that, Vietnam also has other preferential policies such as import tax exemption for goods used to create fixed assets, quarterly value-added tax declaration, and investment credit incentives. and exempted from land rent and water surface rent. Although these policies have since been changed in line with the actual situation, they are still to create maximum favorable conditions for investors.
The second strength of Vietnam is abundant human resources and cheap labor costs. The De Nhat Tai Kinh newspaper even interviewed a Vietnamese worker, emphasizing that working at Nike's factory is much higher and more stable than farming, and the working environment is also better. Of course, foreign giants also have the advantage, labor costs in Vietnam are lower than in China, so this is a wise choice.
General Director of Shanghai Liangqi Brand Management Company Cheng Weixiong noted that multinational corporations consider very carefully when deciding to move production lines, from external factors such as political fluctuations. (Strategic rivalry between the US and China), to export quotas, tariffs, exchange rates, production capacity, delivery terms, labor costs, geographical location...
"Nike is a global brand, so you can't put your eggs in one basket," said Cheng, explaining the mentality of global corporations that can't be too dependent on China.
According to information from an FDI enterprise specializing in manufacturing and processing shoes for many major shoe brands in the world, including Adidas and Nike, shared with Tuoi Tre, there are two reasons why production orders are Leather and footwear outsourcing hahttps://vn.sputniknews.com/20220110/viet-nam-thanh-trung-tam-san-xuat-moi-cua-the-gioi-trung-quoc-co-ly-do-de-lo-so-13165201.html