The export-oriented footwear industry may have some tough times ahead, according to a report yesterday in National Business Daily (NBD).

The report concluded that since one of China's largest shoe producers experienced a drop in net income, other companies might face similar problems, or even a crisis.
 
Yue Yuen, the largest original equipment manufacturer (OEM) of shoes for Nike and adidas, recorded a year-on-year decline of 1.58 percent in net income in the first seven months, according to NBD.

Wang Zhentao, president of Aokang Group, one of China's largest footwear manufacturers, told Chinese Businessman magazine in early August that prices went up all around.

The price of raw materials rose along with the cost of labor. Both combined to increase production costs by 20 percent since 2008, Wang said.

Shoe exports in the first seven months of 2009 declined 5.2 percent year-on-year to $15.7 billion, China's General Administration of Customs said Monday.

In addition, Nike closed its last self-owned shoe factory in March and was expected to transfer its production base to Vietnam and Indonesia, where the labor force and materials are cheaper. Competitive advantage of price in China's major rivals like Indonesia, since the late half of 2008, while renminbi stayed relatively stable,making things even harder for Chinese firms, Wang said.

Sun Zhe contributed to this story