Yue Yuen Ind

Chinese footwear manufacturers are confronting intensifying headwinds from weak global demand, rising labor costs, and production inefficiencies, even as some U.S. companies may shift orders back to China to rebalance sourcing risks. Professor Sheng Lu of the University of Delaware noted that from January through July 2026, China-made footwear was priced 30 to 40 percent higher than similar products from Vietnam, Indonesia, and Cambodia, yet offered far greater product variety, including sneakers, sandals, boots, and slippers. Yue Yuen Industrial Ltd. issued a profit warning, expecting a 55 to 60 percent decline in first-half 2026 profit from $171.2 million a year earlier, citing weak demand, rising labor and overhead costs, and production scheduling disruptions from overlapping Lunar New Year and Ramadan holidays. Stella International Holdings Ltd. reported second-quarter footwear manufacturing revenue rose just 1.4 percent to $439.2 million, while first-quarter shipment volume fell 1.7 percent, and the company said 2026 is an investment year as it ramps up three new factories in Indonesia, Bangladesh, and Vietnam. China remained the dominant shoe supplier to the U.S. in 2025 with 964 million pairs imported, but its dollar and volume import shares fell to 35-year lows, and the average landed cost relative to the world cost slid to a 34-year low.