【Industry Trends】The Review of Chinese Sporting

　　At the 18th CPC National Congress, sports governing bodies were required to develop National Fitness Program and promote the all-round development of sports for all and competitive sports. This was also the requirements for the Chinese sporting goods industry.

　　In recent years, Chinese sports industry annually increased 22.6%, ahead of GDP. The proportion of sports industry and the related industry in GDP increased to 0.55% from 0.46% in 2006. Mr. Ma Jilong, director of China Sports Equipment Administrative Center and deputy president and General Secretary of China Sporting Goods Federation, said, “The proportion of sporting goods industry in sports industry is about 80%, so it plays a key role in the development of sports industry.”

　　While the whole Chinese economy was going down, many industries faced troubles. Mr. Ma Jilong said to reporters, “With the influence of the economic environment, Chinese sporting goods industry enters a period of readjustment with its growth rate slowing down.” Chinese sporting goods manufacture industry increased 10% in 2012, a little higher than GDP growth rate and lower than the growth rate in 2011, 2010 and 2008.

　　According to the status quo of sporting goods industry, China Sporting Goods Federation made researches and found the main factors about the development of Chinese enterprises.

　　Firstly, with the labor cost going up, Chinese enterprises faced great pressure. Chinese average labor cost increased 20% in 2011, and inflation quickly increased the price of raw and semi-finished materials. Facing the social trends of energy conservation and emissions reduction and the marketization of energy price and interest rate, Chinese small and middle-sized enterprises were difficult to cut their costs.

　　Secondly, low international market demands caused developed countries’ trade protectionism. Less orders from European markets and USA market brought troubles to sporting goods enterprises. In many Asian emerging markets, local enterprises took over the industrial transfer from developed countries due to the low labor cost and gradually met the local market demands. This greatly influenced Chinese enterprises’ export.

　　Thirdly, Chinese sporting goods enterprises used to focus on scale expansion, but they did not improve the requirements for the brands and product quality. They also lacked innovations in products and markets. They should adjust product structure, build brands and strengthen their innovations.

　　Besides the above-mentioned three factors, the strong expectation for RMB appreciation, the current monetary policies, and financing difficulties all hindered the development of Chinese sporting goods enterprises.

　　In 2008, the global financial crisis influenced the economic development of China and the development of sporting goods industry. Nowadays, similarities and differences existed when comparing the new financial crisis with the last crisis.

　　In Mr. Ma Jilong’s eyes, both financial crises entered China and greatly influenced Chinese sporting goods industry.

　　In 2008, Chinese sporting goods industry passed the financial crisis due to the influences of the Beijing Olympic Games and the great market demands. Nowadays, the financial crisis, the increasing labor cost, and the lack of market demands all put Chinese enterprises to the test.