As a result of the impact of increasing prices for raw material and a shortage of skilled labour, China’s Shenzhen region has reported a fall of 20%, to 6 billion yuan ($731 million), in the export of key leather goods in 2004, compared with 2003.

Labour costs also increased by over 20% following the decision by the Guangdong provincial government to introduce a new minimum wage level in December 2004.

According to statistics released by the Shenzhen Leather Industry Association, around 200,000 people are currently employed in the 800 leather or leather goods manufacturing factories in Shenzhen. The key leather goods are shoes and leather bags, of which 70% is exported.

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