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Disappointed and dissatisfied as they are Chinese shoemakers have remained calm as the European Union's (EU) two-year anti-dumping duty on Chinese-made leather shoes took effect on Saturday.

Under the EU's new policy European shoe importers will pay a 16.5 percent tariff on Chinese-made leather shoes and 10 percent on Vietnamese footwear. Children's shoes, which were not covered by the provisional anti-dumping duties introduced on April 7, are now subject to the additional costs. 

According to EU figures China exported 1.25 billion pairs of shoes to Europe in 2005. However, exports may now drop by 10 percent following the introduction of the levy, said industry members.

"We're not surprised at the anti-dumping duty levy at all. After all it's not the first time," said Xu Hongzhen, vice manager-general of the Wenzhou-based Jierda Shoe-making Com. Ltd., after a grand party held by the company to celebrate the traditional Moon Festival on Friday night.

In April the EU imposed six-month tariffs of 19.4 percent on leather shoes from China and 16.8 percent on those from Vietnam. "Ever since then I knew a long-term punitive duty would come sooner or later though it's extremely unwise for EU to do so," said Xu.

As an important shoe manufacturing area on the Chinese mainland Wenzhou, in eastern Zhejiang Province, is home to nearly 4,000 shoemakers employing over 400,000 workers and producing 600 million pairs of shoes annually.

Last year Wenzhou exported 438 million pairs of shoes with a value of US$1.58 billion. One third of the exports were sold to the EU. Wenzhou's leather shoe exports to the EU accounts for approximately a quarter of China's total to Europe. 

But statistics show that in June and July shoe exports from Wenzhou dropped by 7.17 percent from the level of a year-earlier.

"With the highly globalized international market today the 16.5 percent anti-dumping duties will not only drag China's shoemakers down from their superior position amidst fierce competition but also make it hard for the medium and small sized firms to survive," said Xu.

What's more the anti-dumping duty sanction ran counter to the free trade policy initiated by the European Commission and wouldn't save the declining EU shoe-making industry in a real way, he said.

The EU's latest move on anti-dumping duties was also widely criticized by European businesses and consumer groups. They say such measures will lead to job losses in the retail sector and hurt millions of consumers

"An old Chinese saying states that moving stones can roll over your own feet and though the anti-dumping duty is a strike against Chinese shoe firms the EU retailers and consumers are also victims of the decision," Zhou Yaohua, vice president of the Wenzhou-based Dongyi Shoe-making Com. Ltd., told Xinhua on Saturday.

To counteract the impact of the EU's anti-dumping tariffs Chinese shoe manufactures have shifted their sights to new markets in Southeast Asia, South America and Oceania as well as speeding up expansion of domestic sales. 

"We've made preparations to open the markets in South America and Australia since the EU planned to carry out their anti-dumping investigation last year," said Xu.

The orders from the EU had decreased since it imposed the anti-dumping tariffs in April but  overseas sales volume so far was almost equal to that of last year as sales in new markets had increased rapidly, explained Xu.

The Aokang Group, the country's second largest shoemaker, focuses more on mainland markets to diversify the risk of intensifying competition overseas. Aokang propose to invest 1 billion yuan (US$126.58 million) to create a western shoe-making capital in the southwestern municipality of Chongqing.

"The low labor price and huge market in western China cannot be resisted in the development of Aokang," said Wang Zhentao, their president.

In addition to tackling the tariff issue Chinese shoe firms have also begun to build overseas factories in Russia, Nigeria and even in EU member countries.

"To cooperate with foreign shoemakers would not only help Chinese firms to avoid the EU's anti-dumping duties but also help Chinese shoes step into the international market," said Xie Rongfang, secretary of the Wenzhou Shoe and Leather Making Industry Association.

Xie cited the example of Aokang which produces shoes with its Italian partner GEOX in Italy and more than 70 percent of their products sell in EU markets.

The EU's anti-dumping sanctions have also prompted Chinese shoes manufacturers to update their strategy for development. "The development of the Chinese shoe-making industry can't always rely on low cost. Improving the quality and grade of our product is the only way forward," said Wu Chunyue, general manger of the Imports and Exports Corporation under the Aokang Group.

In the long-term trade barriers like the anti-dumping could force the Chinese shoe-making industry to shift its growth plan from the current quantity-driven strategy to a quality-oriented way forward, said Xie.

In the world's shoe industry the EU was superior in design, technology and their sales network but China was good at processing and had a low-cost labor force, according to Xie.

It was unfair to portray Chinese shoe firms as lacking the product quality or promotional imagination to succeed on their own in foreign markets but shoemakers should realize the importance of branding to the future of the industry, said Xie.

"As long as it remains a maker of cheap sneakers China will have to endure constant repetition of shoe wars so what we should do is accept the challenge as another opportunity for development," he said.

(Xinhua News Agency October 8, 2006)