Top Biz News

Shoe makers raise legal defence funds

(Xinhua)
Updated: 2006-03-25 10:39

In a response to the European Union's  introduction of anti-dumping measures on Chinese footwear, Chinese shoe manufacturers are bracing themselves by raising a legal defence fund.

The European Union announced Thursday it will levy a 4.8 percent anti-dumping duty on leather shoes imported from China beginning April 7. The tax rate is scheduled to rise to 19.4 percent by October.

The EU's ruling lacks evidence, Wu Zhenchang, president of the Guangdong Chuangxin Shoe Manufacturing Company, was quoted by the China Business News as saying.

Wu started an alliance of Chinese shoe makers that was formed to provided a united defence against the European Union's anti-dumping accusations.

"Along with cooperating with the Chinese government and chambers of commerce in their consultations with the EU, our alliance is also raising a defence fund," Wu said.

"The legal defence fund will be about 3 million yuan (375,000 US dollars), and we will invite European lawyers to plead our case against the duty," he said.

Reports say that the the profit margin on Chinese shoes is very slim and it expects the EU's anti-dumping duty will have a significant impact on Chinese footwear manufacturers.

According to figures released by the China Chamber of Commerce for Import and Export of Light Industrial Products and Arts-Crafts, Chinese footwear exporters earn a profit of 5 percent to 15 percent on shoes sold in the EU.

The Euro's tendency for devaluation and the Renminbi's (China's currency) possible continued appreciate will mean Chinese shoes will become more expensive in European, likely leading importers to order shoes from other countries and regions, Wu was quoted by the newspaper as saying.

The EU's decision not only harms trade with China, but also increases costs for importers and reduces the purchasing power of its consumers, he said.

A spokesman for the Chinese Ministry of Commerce and the President of the China Chamber of Commerce both maintain that Chinese footwear exporters are not dumping shoes at below the cost of their manufacture and that Chinese shoe exports have not unfairly harmed the EU industry.

"China, with its low cost of labor, has a comparative advantage in shoe manufacturing," Chong Quan, spokesman for the Ministry of Commerce said.

China's shoe industry has become the primary focus of Europe's anti-dumping lawsuits aimed at foreign countries. China-made shoes exported to the EU's are estimated to be worth 730 million U.S. dollars, according to statistics collected by the alliance's members.

In 2005, the European Union's footwear exports to China also jumped 34.45 percent year on year to 39.03 million U.S. dollars, according to European figures.