Until a few years ago, China was a mysterious, millenary country in which a lot of people lived and were manufactured baratijas that the world acquired with discretion since it understood that the one who buys cheap, buys at all times. Today, the reality is another. It is no longer considered an emerging country but one of the most powerful economies on the planet. China is the World Automobile, Toys and Computers Factory.
If we review our environment, we will see that the slogan “made enchina” invades our reality: it is very likely that at this time, each of us will be using something that was done in that Asian giant. Not in bucket, the president of the United States, Donald Trump has lashed out with some tariff fury against Chinese products.
According to the New York Times journalists, Alexandra Stevenson and Tung Ngo, China is effectively the great factory in the world, however, there are some signs in the panorama that make us see that China’s growth impetus can begin to shrink. There is growth in the manufacture of many articles, but not in sports shoes. China is losing that title against Vietnamese production.
The factories surrounding the city that was previously known as Saigon and now bears the name of the revolutionary Ho Chí Minh produce foam soles, soft templates, cotton hostesses and mesh fabric. The pieces are transported by trucks to the stores to assemble them in shoes. Then, in nearby ports, shipping containers are filled with boxes for brands as well known as Nike, Adidas, Saucony and Brooks Sports and are sent by the Dong Nai River to the sea.
Careful. With this I am not saying that China has reached a breakdown. There is no more resounding truth than in the business world: abandoning China is difficult to do. The Chinese have a high level of control of raw materials and their skill as mass manufacturers has promoted profits and has kept consumers happy. In the end, the communist nation has understood the capitalist principle better than many right -wing governments.
The dependence that the world has shown in front of Chinese products seems to have gotten into a quagmire. The Chinese are hard negotiators. They are excellent vendors and bad buyers. At first glance, it seems that the Chinese industry carries the singing voice and there are not many alternatives to reverse this trend. Of course, this reality puts the world in a very uncomfortable situation against Chinese commercial power.
Perhaps, that is why Donald Trump has decided to manage painful doses of tariffs and has applied them as a father who gives his son a repulsive tonic to stop being squalid. I don’t know if the president of the United States will be doing the right thing. What is seen is that the sports footwear industry is showing how it can be done to reverse this dependence. Although, moment. It is not time to throw the bells on the flight. It is clear that big brands still have huge factories in China. But, so it is now manufacturing shoes that are sold in China. And, yes: Vietnam has surpassed China as the number one source of tennis sold to the world by Nike, Adidas and Brooks and others.
Of course, Vietnam does not bring them all with you. After President Trump threatened Vietnam with a 46 percent tariff, the prices of Nike and Adidas shares collapsed. Since then, the two countries have announced an initial commercial pact that reduced the new tariffs to 20 percent.
We have to learn from Asians. China opened its economy. Vietnam saw how good I was going to them and did it too. The industries began traveling through Asia in search of lower costs and salaries in the 1970s. That was when many brands turned to Asian factories to increase the utility margins. One of the best examples is the footwear industry. The factories in East Asia could make cheap shoes, fast already large scale.
China opened its economy to foreign companies in the 1980s, and with it access to hundreds of thousands of workers. Suddenly, China was cheaper and more attractive. South Korean and Taiwanese companies that work for global shoes brands quickly moved a large part of their factories to Chinese territory.
But, subjectly, everything changed in 2020, when China closed its borders near the start of the Covid-19 outbreak. Business leaders with factories who closed realized how dependent people were from China. It was not a difficult decision for footwear executives to start transferring resources to Vietnam. A supply chain with “little Chinese dependence.”
If China is a factory that can begin to shrink, the business world must be attentive to detect the opportunities that can be generated. There is the real need to print speed to marketing and long -term partners have already made investments in the supply chain.
What should we face a break in China’s accelerated growth? Some may panic: it is much that we depend on them. However, the analysis that leads to paralysis does not work. It is about being attentive and realizing that in front of an event of such magnitude, we can be glimpsed great opportunities. There has been so much about Nearshoring. It is time to demand that these advantages translate into positive effects, there is no time to lose.
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