Translated from 21st Century Business Herald

Adidas will close the 160-worker factory in Suzhou, Jiangsu province, at the end of October. The company said it will source its products from other local Chinese manufacturers. The closure is part of Adidas’ efforts to restructure business both in China and globally to ensure efficiency and increase scale.

Chinese people need not worry about this. The rise of labor costs, house rent and resource prices in China necessarily make companies move their factories to other countries with lower production costs.

Yet, that does not mean China will lose its position in global trade. Adidas’ sales in the first quarter this year on the Chinese mainland increased 26 percent year-on-year, and the Chinese market accounts for 23 percent of Adidas’ global sales.

In addition, more Chinese manufacturers are working for China’s own brands in the sportswear industry. These companies must pay more attention to increasing their input in the research and development of their brands to compete with their overseas counterparts.

The close of Adidas’ last factory opens a new stage for Chinese industry. This change means China should gradually transform itself from a manufacturer to a designer. It also means China’s competitiveness in the world trade is no longer based on its cheap labor, but on its innovation and product quality.