Case study: Nike production in China

The US sportswear company Nike have had a sizeable number of factories based in China for many years.

Although the headquarters is based in Oregon, USA, the company has over 700 shops worldwide, offices across 45 countries and over 700 contract factories with nearly 1 million workers across 50 countries.

Nike has been working in China for over 30 years when they started to sub-contract production to overseas factories.

At present there are around 146 factories in China employing 189,000 workers.

Nike make a large variety of products in factories across China.

These factories provide valuable jobs to the workers although the wider implications of these factories can sometimes help and hinder development in China.

How can Nike help development in China?

  • The jobs that have been brought into China often provide a much better standard of living than other local jobs.
  • The global partnership between Nike and China continues to go from strength to strength which means that they are likely to keep investing more money in the country. In recent years the Chinese market has become increasingly important to the ‘Greater China’ brand in Nike.
  • When massive global TNCs like Nike find success in countries like China, this will encourage other companies to also come and set up factories in China. Infrastructure that was set up to support Nike will also provide an advantage to other investors.
  • Nike claim that they have been an important force in helping to improve worker conditions, pay and rights within China. This means that the local workers should be better off as a result of working for Nike than compared to other companies.

How can Nike hinder development in China?

  • Wages in China are still quite low compared with similar jobs in MEDCs. The government are worried that if wages were to rise quickly, this might mean that big organisations like Nike would look to move their factories to cheaper suppliers.
  • Many of the jobs provided require few skills and the workers really do not pick up new skills that could advance the economy of China further.
  • Much of the profit generated by the company will not remain in China but will leak out and back to company headquarters in the USA.
  • Working conditions are still not great in China compared to what they are in other countries.

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