Abandon the EU, domestic shoe investment transfer position

After five years of difficult defenses, Chinese shoemakers finally "cut off" the EU anti-dumping "big stick."
The European Commission issued an announcement a few days ago and announced that from March 31, 2011, it officially suspended the anti-dumping duties of 16.5% on Chinese leather shoes.
According to an official data, from 2006 to the end of 2010, due to the implementation of anti-dumping tariffs by the EU, China's leather shoe sales to Europe fell by 20%, indirectly causing the company’s economic losses to be approximately US$10 billion, which directly led to the unemployment of 20,000 people in China.
The reporter learned from the investigation that although the EU has already cancelled the anti-dumping duties, some shoe companies’ enthusiasm for the EU market has dropped sharply. In January and February of this year, the Ningbo port exported 3.672 million pairs of leather shoes to the EU, a year-on-year decrease of 8.37%.


The charm of the EU market is greatly reduced


The European Union imposed anti-dumping sanctions on Chinese shoe companies for five years, making Chinese shoe manufacturers feel awkward and helpless.
A person in charge of a well-known shoe company in Zhejiang said that the EU Trade Commission believes that Chinese-made leather shoes are dumped at a price lower than the domestic production cost. "This is just an excuse for the European Union to impose anti-dumping duties on Chinese shoe companies. They did not recognize our market economy status. The EU calculates our production costs. The reference is actually the production cost of a third country."
The person in charge of a well-known shoe company in Zhejiang frankly stated: “Since domestic labor costs are low, companies still have certain profits.” However, considering the production cost of a third country to consider Chinese shoe enterprises is undoubtedly an abnormal means.
A person in charge of a medium-sized shoe company in Wenzhou told reporters that since 2006, the EU market has been gradually abandoned by them. “The anti-dumping tax is so high and there is no profit. Why should we be staring at it?”
The person in charge gave the reporter a calculation and now the average unit price of his company’s pair of leather shoes for sale in the domestic market is US$25. The pair of shoes exported to the EU will have to pay up to US$4 in anti-dumping duties. “Deduction of materials, All the costs of water, electricity, labor wages, venues, etc., pay a $4 tax, leaving little profit."
When a reporter asked whether he would return to the EU market in the future, the person in charge said: "It will be considered but there is little hope for it, or it will be mainly domestic sales."
Zhejiang

Ao Kang Group Chairman Wang Zhenluo said that in 2006 Aokang exported about 1 million pairs of leather shoes to the EU, but with the imposition of anti-dumping duties, Aokang has basically given up its exports to the EU in the past five years. Currently, the products exported to the European Union account for only The total number of products is about 10% to 15%.
“Before the anti-dumping duties, Hua Jian’s exports to the EU accounted for 20% of corporate exports. Since then, it has declined year-on-year, and the current export to the EU is less than 10%. Due to anti-dumping duties, we have lost more than 2 million US dollars of EU orders each year.” Dongguan Huajian Group official told reporters.
The person in charge also said that the imposition of anti-dumping duties, making the company's export costs greatly increased. "This will prompt many companies to abandon the EU market, or reduce the proportion."
Although the EU decided to abolish anti-dumping duties on Chinese shoes, the crisis has not been lifted.
Wei Yafei, director of the shoemaking office of the China Leather Association, said that the EU still has some follow-up questions and preparations in many aspects, and it has now started to investigate relevant situations in China.
After the EU's anti-dumping duties are suspended, there may be a large number of shoe orders that will flood the Chinese market. To this end, Ningbo Customs reminds port-related companies to control the number of leather shoes exported to the EU, and to avoid concentrated exports in the second quarter, so as not to provide EU footwear enterprises with an excuse to restart anti-dumping procedures.
As trade barriers may be built up again at any time, the EU market is less attractive than Brazil and other countries and regions.

Strategic Turn: Building, Opening, and Transferring Positions


The anti-dumping tariff levied by the European Union does not entirely mean disaster for the Chinese footwear industry. Some domestic shoe manufacturers have begun to shift their production bases to third countries in order to evade anti-dumping risks from the EU.
"After 2006, we gradually opened up sales in some countries in South Africa and North America and established a relatively stable cooperative relationship. Now if we allow us to come back and redo the EU market, I think we will not accept it." The person in charge of private enterprises said.
He used the analogy for reporters. It was like everyone used to rush on this bridge. Afterwards, the bridge was stuck. "But we will eventually have to go. We can only give up this bridge and change it." ”
In Russia's territory of Ussuriysk, Wenzhou Kangnai Group spent RMB 2 billion to build an industrial park with an area of ​​2.28 million square meters and an annual output value of RMB 24 billion with Heilongjiang Jixin Industry and Trade Group.
“Not only footwear, but also wood processing are also included in our plans. Apart from building our own factories there, we are also preparing to attract other companies in Wenzhou to go out. After the park is scaled up, it will export products that often encounter trade barriers. For example, clothing, shoes, lighters, etc., some of the transfer out, leading Wenzhou enterprises 'collective break through' across a variety of trade barriers." Kanglai Group Co., Ltd. deputy general manager Zheng Lai Li said.
Some shoe companies from Zhejiang also started to set up production lines in countries such as Russia and Nigeria. The Wenzhou City Shoe Industry Association is also leading the establishment of an overseas production industrial park for Chinese shoe companies in order to circumvent anti-dumping restrictions.
At the same time, Cornell began to try to bypass the intermediary dealers and directly enter the EU's local market.
“In the early years, Kangnai began to set up specialty stores and counters in Europe and the United States. Now there are about 100 more.” Zheng Laili disclosed that Kangnai plans to increase the number of counters in overseas stores and big shopping malls to 1,000 in five years. Family.
Bypassing middlemen to directly face consumers, at least let Cornell's profit rate increase by more than 10%.
Aokang also adopted the same strategy. Wang Hailong, manager of Zhejiang Aokang Group's propaganda department, told reporters that after the suspension of the establishment of stores in Europe a few years ago, Aokang began planning to acquire a local sales network.
Some EU importers have suggested that Chinese shoe companies re-export to the EU via third countries. "Although the price is 1 to 2 dollars higher than the original, it will increase some costs, but the EU importers can basically accept." Wang Hailong said.
According to Wang Zhenyao, Aokang is currently stepping up the development of the Indian market. “We will build a plant in India, build our production line there, and build our own sales network and channels.”

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