Su Chao Ying, secretary-general of the China Leather Industry Association (CLIA), has claimed that some smaller Chinese footwear manufacturers could be forced to close as a result of the EU’s decision to impose provisional duties against Chinese and Vietnamese leather footwear. He stated that smaller companies that focus on exporting to the EU will lose their price advantage and could be forced out of business.

According to a CLIA investigation, the average profit margin for manufacturers exporting to the EU ranges from 5% to15%. Therefore once the duties, that are set to rise to 19.4%, are paid it will no longer be profitable to export to Europe.

Mr Wu Cun Yue, general manager of Import & Export at Aokang Group, commented that at present about 20-30% of the shoe-making materials are imported from the EU, but this would decrease as output will drop when manufacturing costs rise due to the duties.

Guangdong, Zhejiang and Fujian provinces are set to be the most affected by the duties as they currently export a large percentage of production to the EU. However, it is believed that Sichuan province and Chongqing are likely to be less affected as 80% of the footwear produced in western China is exported to Eastern Europe, particularly Russia.