A few isolated Italian shoe companies that source their products in the Far East, such as Lelli Kelly and Simod, have sent letters to the Italian shoe industry association, ANCI, disagreeing with its action, intended to limit imports of their products. Lelli Kelly is threatening to pull out of the organization unless these policies are stopped immediately.
A similar situation is shaping up in the U.K., where the British Footwear Association represents both manufacturers and importers. The management of ANCI has responded basically by saying that it was following the decisions of its board of directors and that it was calling for fair trade. Rejecting claims that it has adopted a protectionist stance, ANCI points to evidence of dumping from China and Vietnam, although this is based on a comparison of costs with Brazil. It has no comment on the idea that India could be chosen as an alternative reference country.
Meanwhile 60 leather footwear producers in China have told their government that they want some say in the national response to the EU’s decision to review its anti-dumping duties against shoes imported from China and Vietnam. Separately, the China Leather Industry Association and footwear associations in Guangdong, Wenzhou, Fujian and Zhejiang are working on their responses to the accusation that China is falsely and unfairly keeping its export prices low. Some European players in the industry are working with their Chinese partners to counter the claim as well.
To help protect manufacturers from the global economic downturn, the Chinese government has raised export tax rebates for the third time this year, now on over 3,700 products. Included are the rebates for clothing and textiles, which will increase from 13 percent to 14 percent. The rebates for shoes and hats will rise from 11 percent to 13 percent. Bicycles will increase to between 11 percent and 14 percent, from at least 9 percent. It has even removed export tariffs for certain steel, chemical and grain products.
In addition, the government has introduced a stimulus package worth 4 trillion renminbi (€454.6bn-$586.9bn). To the shoe manufacturers in China, where the profit margin is 2 percent of sales on average, such federal aid will alleviate their expenses. For the Chinese government, it may prevent social unrest such as protests, strikes and even kidnapping (more in Shoe Intelligence).