Himfr.com Reports Chinese shoemakers eyeing ASEAN to avoid anti-dumping impacts

With China-ASEAN FTA coming into full force on January 1, 2010, 7,000 trading items covered by the agreements on the trade of goods and services will be tariff-free, giving Chinese shoemakers, who are facing EU's high anti-dumping duties, a chance to ease the impacts.

The EU began levying anti-dumping duties of up to 16.5 percent against Chinese leather shoes on Oct. 5, 2006. On December 22, 2009, EU governments approved the 15-month extension of anti-dumping duties on Chinese leather shoes.

Wu Zhenchang, chairman of Chuangxin Shoemaking Company and founder of an industrial association aiming to cope with the EU's anti-dumping measures against Chinese leather shoes, noted that he would take the chance on the China-ASEAN FTA and transfer part of his assembly lines to Southeast Asian countries such as Indonesia and Cambodia. "It will help to avoid trade frictions," he said.

Guangzhou-based Chuangxin's export declined by 30 percent to 40 percent in 2009. "Our export to the EU accounts for less than 10 percent of our total export. However, to reduce costs, global footwear giants including Adidas and Nike gave orders to their factories in the Southeast Asia," said Wu. "Not only products aiming at the EU market, but the whole order of the same type to be sold worldwide."

According to the statistics from the General Administration of Customs, China exported 6.74 billion pairs of shoes in the first 10 months of 2009, down 3.4 percent year on year. The overall value of shoes exported to the ASEAN reached 710 million U.S. dollars, up 49 percent compared with the same period 2008, while export to the U.S. and the EU both declined.

Raw materials for shoes will enjoy zero-tariff after the China-ASEAN FTA comes into force on January. "With the zero-tariff policy and the low labor costs in the Southeast Asia, we are preparing to move our assembling lines there, to produce shoes to be sold in the EU and the ASEAN market," Wu said.

However, there are also risks in investing in the ASEAN. Huajian Group, one of China's top women's shoes exporters, has already closed its factories in Vietnam. Huajian's chairman Zhang Huarong said that the company encountered great operation and management difficulties in Vietnam because of poor supporting industries and unfamiliarity with the cultures there.

Lan Xuanpu, the general secretary of Asia Footwear Inc, pointed out that after FTA agreements come into effect, shoes trade between China and the ASEAN will speed up. Closer trade ties will also boost Chinese shoemakers' investment in the ASEAN. However, due to inadequate supporting facilities for shoe-making, there won't be a massive transfer.

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