In order to cope with the rising cost and ease the export pressure brought by the appreciation of RMB, China's shoe factories have moved their factories from the coastal provinces to the inland areas.

Last year, thousands of shoe factories in coastal provinces went bankrupt.

The AOKANG group, located in Zhejiang Province, invested in the industrial park in Chongqing. The construction of the two phase of the project has begun. The park will reach 100 million pairs of leather shoes by 2012.

Guangdong's Monte Monte shoe company also said that its factory recently established in Sichuan has already started and plans to add 8 production lines in Chongqing.

"The price of labor in Guangdong is becoming more and more expensive," said Jerry Shum, spokesman for Yuyuan Industrial (Group) Co., Ltd. (0551.HK: quotes).

The company has factories in Dongguan and produces shoes for enterprises such as Adidas (Adidas AG) (ADSG.DE: quotes), Nike (Nike) (NKE.N: quotes), Tianmu blue (Timberland) (TBL.N: quotes), etc.

According to Jerry Shum, Yu Yuan has been studying the possibility of building factories in Western China under the government's incentive measures, and it is also possible to locate factories abroad, such as Indonesia and Vietnam.

Although China has become the largest footwear producer in the world, Chinese shoe makers are suffering from multiple problems such as the rising cost of raw materials and labor. The appreciation of the renminbi has also contributed to the rise in export prices.

In a recent press release, AOKANG group quoted industry data as saying that there were 6000 shoe factories in Guangdong, and more than 1000 shoe factories were closed last year.

"Last year's overall cost of shoemaking increased by 20% over last year, but most shoe manufacturers can't raise the retail price of leather shoes."

Fan Manru, manager of AOKANG Group production department, said.