Nike succeeds in China
BEAVERTON (AP) - No
American company has a firmer
foothold in the formerly forbid
den Chinese mainland than
Nike, whose worker incentive
plan for shoemaking appears to
be at odds with the basic
premise of communism.
In just 14 months, a Chinese
born David Chang has engi
neered an agreement to man
ufacture Nike athletic shoes at
factories in his native land
Three such factories are in
operation A fourth will begin
producing shoes soon And the
Chinese government has ap
proved a plan for more factories
in the Fujien province on the
country’s south coast
Plans call for 1 5 million Nikes
to be produced in China by the
end of the year A high official in
China has told Nike Pres Phil
Knight to go ahead with a plan
to offer cash incentives to some
factory workers
"We re looking at having 29
percent of our total shoe
production to come out of China
by 1985," Chang says. "That's
damn near 18 million shoes by
1985 "
The factories — two in Tient
sin and one in Shanghai —
aren't making Nike-brand shoes
yet They are manufacturing
unbranded shoes until the six
Nike officials working in China
determine the quality is good
enough to bear the Nike name
and "swoosh” trademark,
Chang says
Although other American
corporations have failed, Chang
was able to set up the Nike
operation in a little over a year
The reason: Money
“We happen to be in a busi
ness that the Chinese have
recently identified as one of the
fairly quick and relatively easy
areas in which they could earn
hard currency,” he says “The
desperate need for hard cur
rency continues to exist ”
All transactions are on a cash
basis in China
“If you have to pay a $4,000
banquet bill, you have to carry
around a sack of $10 bills," he
says
So Nike became partners with
a communist government, a
new experience for a company
that does most of its business
with South Korea and Taiwan.
"They're very conscious of
their emergence into the 20th
Nike: ‘That’s
damn near 18
million shoes.'
century,” Chang says of the
Chinese “And the fact that any
large company would treat them
with the kind of respect of being
called a partner makes them sit
up and take notice ”
“That was our approach from
the start," he says, “to kind of
put away the image of the one
shot trader"
From the beginning, Chang
pointed out that the Chinese
should be getting some of the
business Taiwan is enjoying
At a recent trip to China to
inaugurate the Nike operation,
Knight met with a high-ranking
Chinese official. After asking
him about offering workers cash
incentives, the leader said to go
ahead and try it,
‘ We've been given consider
able encouragement that this
will not be rejected,” Chang
says
"We realized that this begins
to touch upon some dangerous
ground," he adds "What it is, in
a sense, is refuting their whole
ideology, which they’ve begun
to do."
Nike sent three U S. college
basketball coaches to China for
a series of clinics last year and
plans to outfit, free of charge,
the Chinese national basketball
and track and field teams with
Nike shoes and apparel.
Then there is the question of
exploiting cheap labor
The average Chinese worker
earns $30 per month. The main
reason Nike wants to rely less
on Taiwan and South Korea is
the rapidly increasing wages in
those two nations.
"I suppose the bleeding heart
might say it's exploitation,”
Chang says, “but I prefer to say
we re encouraging and guiding
them toward technological ad
vances."
And he is quick to guard
against labeling Nike an ex
ploiter from the West.
"China historically has been
exploited for so long by the
West," Chang says. “So I want
to do everything that we can to
come across, for lack of a better
term, as good guys.”
"We don't want to be the
rapers and plunderers of colon
ial days," he adds, "because
the Chinese are very, very sen
sitive to any possible re-emer
gence of that kind of attitude."
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