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One of China's top footwear manufacturers has condemned the European Union for imposing a one-size-fits-all anti-dumping tariff on leather shoes made in the country.

Wu Shouzhong, vice-president of Aokang, one of China's leading footwear makers, warned at the World Shoes Forum in Beijing that the EU measure did not take into account the vast differences existing between the nation's shoemakers.

"There are over 20,000 footwear manufacturing firms in China, and 200 of them are of very good quality," said Wu.

The European Union should not treat all Chinese shoe manufacturers in a uniform manner, it should appreciate the differences when introducing tariffs, he said.

"Even the top 200 manufacturers are at different levels, but the European Union imposed a tariff on all firms at one stroke," complained Wu.

Although some firms make cheap and poor quality shoes, a pair of Aokang shoes is priced at 2,000 yuan (US$253), and that is not low even when compared with some European-made shoes, he pointed out.

Wu accused the European Union of imposing its 16.5 percent anti-dumping tariff after conducting a very selective and incomplete investigation.

"The European Union should classify Chinese shoes manufacturers and treat them separately based upon the actual situation," he suggested.

Chinese shoemakers are likely to appeal against the tariff, said Wu. "We have hired lawyers in Europe and have already spent several millions of yuan on the case," he said.

The leather industry associations in Zhejiang, Guangdong, and Fujian provinces also recently issued a joint statement expressing their "fierce dissatisfaction and protest" at the tariff decision.

The statement pointed out that the tariff had already resulted in Chinese footwear manufacturers suffering a huge loss in exports, adding that the associations "reserve the right" to take legal action against the European Union at the World Trade Organization.

Xie Rongfang, a spokeswoman for the Wenzhou Leather Industry Association, said that the associations are discussing whether to use EU courts, though they have yet to agree on when the legal action will take place or what form it will take.

Wu called on the Chinese and European footwear industries to take steps to improve their relations, adding that co-operation between Aokang and Italian footwear company Geox had benefited both sides.

While Aokang is assisting Geox with the opening of chain stores in China, the Italian firm is introducing more advanced technologies to its Chinese counterpart.

Xu Yong, a senior official from the China Leather Industry Association, said that it is a normal trend to transfer labour-intensive footwear manufacturing from high to low-cost regions.

"It will move to areas with even lower costs in the future," he said, "and China will have to be prepared for that too."

"China has started to control the total amount of shoe output, while encouraging value-added products and cutting energy consumption," Xu said, referring to measures in the 11th Five-Year Plan (2006-10).

But some industry experts say that the European Union's move may actually benefit Chinese shoe manufacturers in the long term.

"The footwear manufacturing industry in China needs some stimulants in order to achieve healthy development," said Yang Chengjie, president of the China Leather and Footwear Industry Research Institute.

Although the tariff may cause the industry some "short-term pain, this will encourage enterprises to focus on the quality of products rather than simply cutting their price."

Many enterprises have started to adjust their business strategies as a result of the trade dispute.

"The anti-dumping sanctions are both a challenge and opportunity for the footwear manufacturers in China, " said Su Wenbin, the boss of Hengtai Hongwei Shoes Co in east China's Fujian Province. His company has developed its own brand since the beginning of the year, while also starting to sell its products on the domestic market.

Zhu Weiwen, chairman of the Guangzhou Leather and Footwear Industry Chamber said: "China's shoe manufacturers should also develop their own brand while working as original equipment manufacturers."

(China Daily October 13, 2006)