The government struck a conciliatory tone Tuesday in the latest trade dispute with the European Union (EU), saying it hoped talks would stave off anti-dumping duties on Chinese shoe exports to the bloc.
The European Commission said Monday it had evidence of dumping by Chinese and Vietnamese exporters of leather shoes after finding manufacturers benefited from state support.
The commission, in charge of trade policy in the 25-member EU, declined to comment on measures it could take. But a source familiar with the investigation said the commission would recommend duties of less than 20 percent phased in from April 7.
The Ministry of Foreign Affairs spokesman Liu Jianchao said frictions were bound to arise as Sino-EU trade grew.
"We hope the two sides resolve any problems on the basis of mutual benefit and mutual respect," he told a news conference.
Liu noted the Chinese Government and EU settled a number of trade problems last year through negotiations, including a surge in Chinese exports of textiles after global quotas were abolished.
The shoe case is one of a proliferation of anti-dumping actions involving China, whose cheap exports are raising hackles in Europe and the United States.
EU is also probing whether China exports plastic bags more cheaply than it can produce them. Last week the EU settled a similar row over iron castings.
Chen Zemei, a director of Zhejiang Saina Group, said it was absurd for the EU to rule Chinese shoe makers were dumping goods in Europe. Anti-dumping inspectors from EU combed his company for five days last November.
"Most of us are private enterprises and our biggest priority is to make money, so it is impossible for us to sell our products at a price lower than cost," said Chen.
Zhejiang Saina is one of China's biggest leather shoe makers. It can make more than 4 million pairs a year and sells about half of its output to Europe.
Chen said his firm had a profit margin of 5 to 10 percent and got no breaks from the government except the rebate of value-added tax on exports ?the same treatment EU firms enjoy.
Imposing duties would hurt his firm but would also hurt European consumers, Chen said.
"If the anti-dumping duties are finally imposed, we will have no choice but to pass them on because we have no room to reduce our production cost," he said.
Industry sources say EU plans to exclude sports shoes and children's shoes from the possible anti-dumping measures.
Zhu Feng, chief secretary of the Wenzhou Shoe Industry Association, said duties could send a lot of smaller companies to the wall. Wenzhou, south of Shanghai, is one of the main shoe-making centers in China.
"The anti-dumping tax would have a big negative impact on Chinese shoe makers, but it would be even greater on EU shoe retailers and buyers," Zhu said.
A European-based group of shoe importers, including some of the world's leading names such as Timberland, Hush Puppies and Kickers, said Brussels "seems determined to give its citizens high-priced shoes for Christmas."
