In 2000, China’s export volume of commodities and shoe products amounted to US$17.47 billion, the highest in the world. China has plenty of hide and skin resources and large production and import/export volumes. Pig and sheepskin raw materials rank top in the world and cow hides rank third.

In recent years, along with the rapid Chinese economic development and the increase in people’s incomes, consumption volume of leather products has been increasing year by year.

The average consumption of shoes per capita is insignificant. While 2.5 pairs are consumed per capita in urban areas, only 0.66 pairs per capita are sold in rural areas.

Nevertheless, the total consumption of leather products by the Chinese market is still enormous due to the huge population. Since China is a developing country, levels of consumption for products are rather low. In rural markets, consumption is dominated by low grade products, while medium grade products are favoured in urban markets.

However, there is a considerable demand for high grade leather products in medium and large cities. With the improvement in living standards and an accelerated urbanisation process, demand for leather products in China will steadily expand and requirements for quality products will increase accordingly.

With the increase in demand for Chinese products, production volume of Chinese leather products has become the largest in the world. Demand for leather materials each year is also the highest in the world.

Light leather sales have reached 450 million sq m, of which 160 million sq m are imported. With the accelerated development of the western part of China as well as China’s entry into the WTO, the status of China as the centre of world leather processing and sales should be maintained for several years.

There are about 16,000 enterprises with over two million employees in China’s leather industry. Of these, there were 2,842 leather and leathergoods factories in 2000, composed of state-owned enterprises as well as other ownership enterprises, with sales of over RMB5 million (US$604,113), down 1% from 1999. These factories include leather manufacturing, leather shoes, garments, luggage, other leathergoods, fur and fur products.

In 2000, there was a high increase in production, import and export of leather and leathergoods. According to the Shanghai Leather Association, production at the 2,842 factories was RMB119.7 billion (US$14.5 billion), up 11% compared with 1999. Total sales reached RMB110.4 billion ($13.4 billion), also up 11% year-on-year, while profits increased 33% to RMB5.9 billion ($713.7 million). The production of light leather, leather shoes and garments in China is about 380 million sq m, more than 2 billion pairs and over 70 million pieces respectively.

In 2000, the export of leather and leathergoods climbed 20% year-on-year to reach $12.35 billion. Exports of shoes reached the top of the light industry sector, up 13% year-on-year to reach $9.49 billion. The import of leather and leather manufactured goods reached $3.86 billion in 2000, up 24% year-on-year, while imports of shoes reached $28 million, up 84% compared with 1999.

During the first half of 2001, the import and export of the main leather manufactured goods continued increasing, despite the turbulent economies in the US, Japan and Europe. The export of the main categories also increased in the first half of 2001.

According to the Shanghai Leather Association, the export value of the main leather goods rose 9% compared with the same period of the previous year to US$5.8 billion, accounting for 4.7% of the total export value.

Exports of leather shoes reached US$2.13 billion (up 1%), followed by travel goods and suitcases at $1.94 billion (up 1%), leather garments at $720 million (up 30%), leather at $470 million (up 116%), leather gloves at $280 million (up 8%), footwear accessories at $200 million (up 8%), leather balls at $39.4 million (up 2%), fur garments at $28.5 million (down 5%) and raw hides at $5 million (up 10%).

There was also a large increase in the import value of China’s main leather products during the first half of 2001 compared with the same period of the previous year. The import value of raw hides was up 8% to US$1.26 billion, accessories for shoes and boots $147 million (up 3%), leather chemicals $80 million (up 16%), leather suitcases $18 million (up 24%), leather upper shoes was $13.5 million (up 64%) and leather garments $330 million (up 80%).

The import value of leather machinery hit $37 million, down 13% compared with the same period of the previous year, and that of leather gloves was $180,000, down 29%.

There are some key leather processing and production bases in China. Main production bases include Wenzhou city (leather shoes) in Zhejiang province, Guangzhou city (shoes), Jinjiang city (sneakers) in Fujian province, Chengdu city (leather shoes) in Sichuan province, Chongqing municipality (leather shoes), Haining city (leather garments and leather making) in Zhejiang province, Xinji city (leather garments and leather making) in Hebei province, Tonger-pu (leather garments) in Liaoning province, Jining (small leather accessories) in Inner Mongolia, Huadu (leather tools) in Guangdong province, Li County (leather making and fur) in Hebei province, as well as Shandong province (leather garments and leather making).

In the course of Chinese leather industry development, China has imported advanced machinery, technology and processing techniques as well as talent. China also imports a large amount of quality leather chemicals, engineering and accessories for shoes, all of which help improve the quality of Chinese leather products. Some products have even reached or are approaching the international advanced level.

Among the enterprises with annual sales exceeding RMB5 million (US$604,113), foreign-invested companies and joint ventures with Hong Kong and Macao account for 42%. These foreign-invested companies have brought advanced technology, processing techniques, good management skills and marketing experiences to China’s leather industry.

According to the Chinese Leather Industry Association (CLIA), raw hide import volume has been increasing very fast for the past five years. In 2000, imports reached US$560 million. The annual average growth rate of raw hide imports by volume reached 15% from 1996 to 2000.

Despite the high number of local raw materials, China still has to import a great deal of raw items, particularly hides, due to the huge domestic market demand. Current raw hide imports amount to 500,000 tons, of which the largest category is cow hides at 340,000 tons, followed by sheepskins at 130,000.

The CLIA predict that China’s annual imports of finished leather products in the past five years remained steady at US$2 billion, and reached $2.39 billion in 2000. China’s imports of leather machinery and accessories has been a bit lower recently compared with that of 1996, but still amounted to $100 million. The import volume of leather chemicals has been increasing in the past five years, reaching $260 million in 2000.

According to the CLIA, China will make an effort to transform itself from just a big country to a great country in leather production in the next 10-15 years. The measures to achieve this goal are as follows:

* Upgrade the leather industry through science and technology, enhancing the overall quality of the industry

* Continually expand the domestic and international leather market

* Implement a name branding strategy, further the work of the ‘Genuine Leather Mark’, and lay down a solid foundation for the establishment of name branding in the international market

* Raise environmental protection awareness. Strengthen environmental protection consciousness throughout the industry and ensure the sustained development of the leather industry

The CLIA forecast for the leather industry in China is as follows:

* China’s imports of raw hides and finished leather will increase

* Imports of shoe materials and accessories will also increase

* High quality leather chemicals at a reasonable price will find a greater market, especially environmentally-friendly chemicals engineered to develop new ecological leather products

* Consumption of middle and high grade leather shoes and leather products in the local market will increase slowly

* Investments will be made in extending and developing livestock husbandry bases in China

* Overseas investments are needed to build leather making, leather shoes and garments’ factories in the local market, thus lowering the product costs and expanding the local market

* Personnel engaged in designing leather shoes, garments and leathergoods are welcomed