The changing landscape in China

The Ron Sauer blog
Published:  07 May, 2014
Ron Sauer

We now know a lot about the problems for tanners processing raw hide/skins concerning pollution and the actions taken against them in China. Some begin to wonder when it will be the turn of the finishing plants (processing from wet-blue or crust) to pass the pollution tests for their part in the leather making production process. 

Dyeing, retanning and spray finishing also leaves toxic/chemical waste, which must be disposed of one way or another.

For this reason some leather sellers already foresee bigger opportunities for them to sell finished leathers into China. Many of these leathers are to come from countries such as Italy and Brazil (as is already the case and shows signs of further growth).

But this is not all. From talks with tanners, traders and shoemakers we learn that the Chinese government is working hard to get a grip on the entire industry. From raw material imports to retail sales and exports. It is not just the polluters they are after but also the duty and tax evaders. The customs authorities are closing the gaps in the huge number of ports and border crossings where until now those who knew the tricks were able to get material through without paying the duties and taxes as they should.

And then there is the need for social insurance, social stability, social equality, decent wages etc., which is being forced upon the Chinese industry by global developments in this field. Thanks to modern communication and social media such information is no longer a secret kept from Chinese workers. Just look at the recent strike at the Yue Yuen shoe factories.

We should look at these influential factors together (environment, serious tax payments, social justice), which are all developing at the same time at great speed and changing the industry.

Nobody knows what the exact outcome of all this will be but one thing is sure. It will make manufacturing in China more expensive. And as a footwear manufacturer told me this morning the world should get used the fact that Chinese products will not remain as cheap as what we are used to up to now and the country will become more important as a consumer than as a producer.

Ron Sauer

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