Anti-dumping duties removed, shoemakers eye EU market
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Since the European Union (EU) erased anti-dumping duties, shoemakers in east China's Zhejiang Province have shifted from a low-cost strategy to target the high-end EU market.
Aokang Group Co., Ltd., one of 1,200 Chinese companies affected by the tariffs, is abandoning its low-cost strategy and forging ahead on a new path to avoid being involved in a new round of trade frictions with the EU.
Based in Wenzhou, the shoe-manufacturing export hub in east China's Zhejiang Province, Aokang Group, one of China's leading shoemakers, experienced both the rise and fall of shoe exports over the past several years.
In October 2006, the EU imposed a two-year 16.5 percent anti-dumping tariff on imports of Chinese leather shoes.
These measures were introduced in response to Asian footwear being sold below production cost in Europe. The policy was extended and remained in effect until March 31 this year.
Prior to the anti-dumping measures, Aokang had once received an order for 1.5 million pairs of leather shoes from GEOX, a well-known Italian footwear brand. Later, the influence of the anti-dumping duties resulted in fewer orders from the buyer, according to Wang Zhentao, Chairman of the Aokang Group.
"Since the end of the anti-dumping duties was announced by the European Commission last month, orders from GEOX have increased by about 70 percent in the first quarter of 2011 over the same period last year," Wang said.
"Twenty thousand pairs of leather shoes have recently been exported to Europe by Aokang," Wang added.
Xie Rongfang, head of the Wenzhou Shoe Industry Association, said that the export of leather shoes from Wenzhou will increase steadily by 10 to 20 percent.
Since seeing its opportunity to return to the EU market, Aokang has raised both the quality and retail price of its products.
Li Haiying, Distribution Manager of the Aokang Group, said that Aokang has started to select high-end orders from numerous European buyers rather than seek out new orders.
"Those renowned European brands, like Sixty, Camel, and Wortmann, have shown great interest in cooperating with Aokang," Li said. "We want to focus on some orders with high standards, otherwise, the export of our products will surge."
Kameiduo Group Co., Ltd., a leading supplier of women's shoes with more than 3,000 employees in southwest China's Sichuan Province, faces a similar situation.
"The end of the anti-dumping measures may bring some advantages, but we still have to look for more reliable outlets, like industry transformation," Liu Ying, Assistant to the Chairman of Kameiduo Group, said.
"Even if production is based in China's far-western regions, the cost of shoe-making has continued to rise since 2008," said Liu. "The low-cost strategy does not make any sense."
Liu said that Chinese shoemakers do not have their own name brands and outstanding designs, elements that are attractive to European consumers.
His views are shared by Xu Yong, the Deputy Director of the China Light Industry Federation (CLIF).
"The transformation of China's shoe industry is inevitable. Shoes of good quality and exquisite design can be more competitive in the international market," said Xu.
Wei Yafei, a spokesman for the China Leather Industry Association (CLIA), warned that the end of the anti-dumping duties should not mean domestic shoe-making enterprises can relax their vigilance. Wei says the EU could still consider a new round of footwear trade remedy investigations and protective measures.
"Chinese shoemakers ought to study shoe-exporting regulations and raise the products' quality and value added levels. Meanwhile, they have to strengthen cooperation and communication with European trade partners so as to make their products more popular in the European market," said Wei.
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