Domestic Demand Continues To Expand And Opportunities Exist In China'S Shoe Crisis

In recent days, the world bank has increased China's economic growth target from 9.6% and 8.7% to 11.3% and 10.8% respectively, and believes that strong domestic demand in East Asian economies is expected to absorb the impact of credit crisis and high oil prices in the financial market, especially in China, where domestic demand continues to expand, which will become a driving force for regional growth.

Some analysts believe that as urbanization and young people enter the service industry in large numbers, footwear products will become an important item in their shopping for non essentials.

Even if China's economy can not maintain its two digit growth this year, consumer spending will still be quite strong.

The number of shoes purchased by mainland consumers will reach the level of developed countries. UBS estimates that the volume of the mainland shoe market in 2010 will reach 12 billion dollars, and the number of shoe purchases per person will be 2.2 pairs.

Cost factors constraining the development of the National Bureau of statistics data show that in 1-10 months of this year, the national industrial goods prices rose 2.8% year-on-year, raw materials, fuel and power purchase prices rose 3.9%, rising prices of raw materials and energy is the main reason for the rise in costs.

"The price of raw materials has gone up sharply this year, and the company's production costs remain high. Although we have adopted various measures to increase efficiency and reduce expenditure, our export sales have been affected."

Guangdong Zhongjie shoe industry Limited by Share Ltd chairman He Yuling said.

According to the insiders, in recent years, production materials, labor costs and energy costs have gradually increased, and the intensification of market competition pressure makes it impossible for enterprises to pass on the cost of product prices, so that the proportion of sales cost in sales revenue increases year by year, and the profitability of the industry gradually weakens.

Faced with challenges, many enterprises began to try to raise prices.

Zhongjie shoe industry official said that enterprises are increasing the export prices to reduce the impact of rising raw materials.

However, it is difficult for enterprises to increase export quotas year-on-year in the light of the increase of raw materials.

Moreover, for most small and medium enterprises, raising prices means losing some customers and markets.

Professor Li Jun, an expert on international economy and trade at Guangdong University of Business, believes that rising raw materials and rising international oil prices will create huge cost pressures on "made in China" and will gradually weaken the international competitiveness of Chinese made products.

The anti dumping dilemma began in June 2005 when the European Union formally announced anti-dumping investigations on two kinds of labor insurance shoes in China. The shoe industry war between China and Europe has lasted for more than 2 years.

Since October 7, 2006, the EU has imposed a 16.5% anti-dumping duty on Chinese shoe enterprises for a period of 2 years.

In September this year, the EU launched an anti circumvention investigation of Chinese leather shoes.

It is understood that the implementation of the EU anti-dumping measures has had a great impact on the export of China's leather shoes industry for a year.

According to the data provided by the China Light Industry Arts and crafts import and export chamber, the number of imports of leather shoes anti-dumping products decreased by 7.76% in the first half of this year compared with the same period.

Among them, the number of imports from China was 86 million pairs and the import amount was 943 million US dollars, down 26.37% and 21.36% respectively compared with the same period last year.

In response to the EU's trade barriers against China's leather shoes products, some Chinese shoe companies filed a lawsuit against the first instance court of the European Union, accusing the European Council of imposing a 16.5% anti-dumping duty not in conformity with the relevant EU laws.

It is reported that the European Union Court of first instance has completed the first round of defense against anti-dumping proceedings filed by Chinese shoe companies, and AOKANG and other Chinese shoe enterprises will enter the second round of defense. The time will be about a year.

Wang Zhentao, vice president of the China Leather Association and President of AOKANG group, said that Chinese shoe enterprises will strive to achieve breakthroughs in the second stage of the judicial process.

Another way to find out a way out for the EU's artificial trade barriers is to realize that this trend will become a trend for Chinese shoe companies to actively respond to complaints, and on the one hand, start looking for markets through multiple channels.

After suffering from EU anti-dumping, Chinese shoe enterprises gradually became familiar with the EU's rules of the game, and many shoe companies began to take the high and middle grade line to cope with the long-term barriers.

"It is not a new opportunity to treat trade frictions with a positive attitude.

Enterprises can adjust their product structure, quality and competition strategy, and the whole industry will also greatly improve.

Zhou Shijian, an expert in economic and trade relations, believes that the Chinese shoe enterprises under the predicament should pay more attention to their own competitiveness.

In fact, when the efforts of many parties have not seen much success, Chinese shoe companies have begun to realize the fact that the EU market is not the only choice while upgrading itself.

In November 2006, 4 months after the EU's decision on Chinese shoe enterprises came into effect, the China Africa Cooperation Forum Beijing summit and the third ministerial conference were held in Beijing.

China and Africa have in-depth discussions and cooperation in the economic field. During the summit, second Chinese African entrepreneurs' conferences were held, and Chinese footwear enterprises ushered in a historic opportunity.

In recent years, the trend of China's shoe export to Africa is growing rapidly.

China's footwear enterprises headed by Quanzhou have also increased their investment in Africa in recent years, while Zhejiang shoe companies are also unwilling to lag behind. Data show that in the first three quarters of 2006, only Zhejiang province exported to Africa reached 210 million pairs of shoes and exports amounted to 320 million US dollars.