Shoe makers prepared well for EU probe
By Huo Yongzhe (China Daily)
Updated: 2005-07-09 08:55

The exporters led by the industrial chamber said they will stand together and defend themselves against claims of industrial damage to their European counterparts.

Twelve leading Chinese shoe manufacturers met at mid-week and agreed to answer the EU questions..

"They produced 80 per cent of the country's total work safety shoes," said Zhou Xiaoping, division director of fair trade under the Wenzhou Foreign Trade Commission.

The 12 companies are from Wenzhou, a secondary city in East China's Zhejiang Province also known as "China's shoe capital," and Hebei, Jiangsu and Guangdong provinces, all major shoe exporters.

And the number of enterprises joining the process could become larger in the coming days, as consensus builds to find ways to seek solutions in the case.

Preparing actively to answer to the investigation is half of successfully countering the situation, said Zhang Shuhua, vice-president of the China Leather Industry Association.

"We have made full preparations for the coming investigation... and we are also prepared for any result," said Chen Zemei, chairman of the Saina Group, China's largest manufacturer and exporter of the shoes.

The investigation into whether Chinese exports of toe-capped shoes are being "dumped" on the European Union market at below production costs will last a maximum of nine months and could lead to the imposition of punitive duties.

"We will work together with our footwear manufacturers and European authorities to get a fair resolution to the issue," said a senior Ministry of Commerce official.

"We will make detailed preparation for the case," said Jin Xiaoxiu, deputy general manager of Hebei Gold Guangyuan Group Co, the second largest exporter of safety shoes last year, with some US$7 million worth of shoes exported to the EU in 2004.

She said the dumping claims are groundless and represent trade protectionism in the EU.

The EU's decision is hasty and unfair to Chinese manufacturers since it made its decisions based on inaccurate statistics and wrong calculation methods, said Luan Chunsheng, vice-president of China Chamber of Commerce of Light Industrial Products & Art-crafts (CCCLA).

European shoemakers imagined that China's shoe imports would flood in when the quota was lifted, but there is no solid basis for that conclusion, according to Luan.

"And the calculation basis is incorrect since the EU included 15 nations before May 2004, while it now has 25 nations," said Luan.

The quantities of imported Chinese shoes rose 581 per cent and its total value 433 per cent from January to April, according to EU statistics, and the price of each unit was lowered by 28 per cent, but the relevant Chinese customs figures showed that the quantity, value and price for each unit of the above shoes was up 11 per cent, 45 per cent, and 31 per cent respectively.

"That moderate increase represents a normal trade increase with both sides' efforts to boost bilateral trade," said Luan.

 "(EU's statistics are) from a wrong calculation basis and their methods led to a wrong conclusion that misled European industrial sectors and frightened Chinese exporters," said Luan.

Major destinations of China's shoe exports include the United States, Europe, Japan and Hong Kong, among which the EU is the second largest market, with a total export of 820 million pairs worth of US$2.22 billion last year, according to the CCCLA.

And in the first four months of this year, China exported a total of 330 million pairs of shoes to European Union, worth of US$940 million.

"The increase represents a natural industrial transfer from developed regions to developing regions. It shows the decline of European shoe manufacturing sectors," said Zhang, adding that Europe will still remain the major centre of shoe design in the future.

"The rising trade protectionism will not only hurt interests of Chinese manufacturers, but European importers and consumers," said Luan.

"I hope Chinese exporters will fully co-operate with the investigators. If they are not dumping in Europe, they need to provide solid evidence and they will be fairly treated," said Sergio Balibrea, first secretary of Economic & Trade Section at the Delegation of the European Commission to China.