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Shoemakers Feel the Pinch over Dumping

Some Chinese shoemakers are likely to suffer following charges from the European Union (EU) that they have dumped cheap footwear onto the EU market.

This is according to several of China's top shoemakers, some of whom are preparing for inspections from the European Commission over this issue.

And Zhang Guiping, an official with Liuxin Industrial Ltd, a shoe company based in Jiangsu Province, said European buyers at the 98th Chinese Export Commodities Fair, held in Guangzhou, Guangdong Province, were not as numerous compared to previous events.

"The dumping charge against work shoes has had a great impact on our exports," she said.

Exports from the company totalled US$30 million last year, 85 percent of which came from sales to the European Union, including Spain, Italy, Germany and Britain.

Workplace shoes accounted for one quarter of the company's total exports.

The charges are also a big blow to Saina Group Co Ltd, of East China's Zhejiang Province, which specializes in manufacturing workplace shoes.

"If the Europeans decide to impose a high anti-dumping tariff, we are likely to lose the EU market," said Pan Shunjie, an export manager at the company.

The EU market is the largest export market for the company, accounting for more than half of the company's US$10 million worth of exports last year.

Pan said his company conducted no dumping in the EU market.

"We do not understand why the EU levelled such charges against us," he said. "We are selling to the market for profit."

As the company has been chosen as one of the firms that will face the EU spot survey, it has allocated more than 10 employees to prepare material.

"We are waiting for their spot investigation," Pan said.

Although fully prepared, Pan was not very confident about beating the charge because "it depends on the European Commission."

The case is expected to cost the company 3 million yuan (US$370,000) to 5 million yuan (US$617,000).

Some enterprises claimed that although the charges' impact was not immediate, some EU buyers have asked them to fulfil their orders before the date on which EU is scheduled to publish its findings.

Zhang said her company was also considering other methods to avoid high risks in the EU market, such as turning to the domestic market or dealing with some other industries.

"However, it takes time and a lot of investment," she said.

Pan said Saina was actively developing the domestic market and other overseas markets, such as Japan, South Korea and Australia.

"Our company's growth will be slowed down by the trade conflict," he said.

The European Commission initiated dumping charges against workplace shoes and leather shoes imported from China after complaints from European producers. Chinese shoes made with textile uppers have also been warned of possible dumping charges.

According to statistics from the China Chamber of Commerce for the Import and Export of Light Industrial Products and Art Products, 13 leather shoe manufacturers and four workplace shoe producers have been chosen for the sample surveys.

Some surveys will begin next month.

The European Commission still has about eight months to decide whether imports of Chinese-made footwear are being sold at below production costs.

(China Daily October 25, 2005)

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