Guangdong and Wenzhou react to proposed duties

24/02/2006

According to China Leather Industry Association (CLIA), shoe-making businesses in Guangdong and Wenzhou in China have expressed different opinions concerning the duties that are likely to be imposed on shoes made in the country.

Kangnai, a famous shoe group in Wenzhou, said that the company and the European importers had agreed to increase the retail price in accordance with the rate of duties, if the duties really are implemented. So far, the EU is a key market of Wenzhou enterprises, for example, 60-70% of the leather shoes made by Kangnai are exported to the EU. As a result of the duties, Wenzhou enterprises expressed that they would strive for exploration of other foreign markets outside EU.

Many enterprises in Guangdong said they would retreat from the EU market after the implementation of the duties as most of them are unable to have their own brand and can only earn very thin profit growing from cheap labour cost. They said the duties were too high for them to survive on and some of them would move to Southeast Asian countries to avoid the high duties.