A Review Of The Operational Strategies Of Chinese Footwear Enterprises In The Era Of Antidumping

In May 18, 2006, the European Union launched by AOKANG.

The spring of 2011 seems to have come a little earlier.

In Wenzhou in March, the red and green willow and spring are full. Young men and women in thin skirts and skirts are moving through the crowd in the streets.

Spring is not only displayed on thermometers, but also on people's happy faces. It also shows up on the order sheets that come and go. It stays in the shoe production line of Wenzhou's big shoe companies.

"Since the beginning of spring this year, we have received letter of intent from almost every European distributor almost every day."

AOKANG Shoes Co., Ltd. (hereinafter referred to as AOKANG shoes) International Trade Center Logistics Manager Li Haijun busy.

This busy scene, observed reporters in Wenzhou several other shoe enterprises visit also see from time to time.

The European Commission issued a notice on March 16, 2011 announcing that the anti-dumping duty on Chinese leather shoes should be levied on March 31st from up to 16.5%.

This means that the strong and tough EU has said "YES" to AOKANG and China's leather shoes industry.

Affected by this good news, many European orders which once turned to Vietnam, Indonesia and other Southeast Asian countries have been pferred to Wenzhou shoemaking enterprises.

Five years ago, in October 2006, faced with the EU's "anti-dumping stick", Wang Zhentao's

The pnational "marathon" lawsuit between the European Union and the European Union is known as "the first debate" after the 5 year pition period of China's accession to the WTO, and the first 5 years.

It pays over two hundred million dollars a year for taxes and fees.

In October 8, 2006, on the first working day after the "eleven" long vacation, Li Haijun was attracted by a piece of news when he opened the computer. In October 7th, the European Union levied anti-dumping duties on leather shoes originating in China and Vietnam for 16.5% years on the basis of abnormal sales price of leather shoes.

This news is undoubtedly a bomb for a foreign trade salesman.

"16.5% of the anti-dumping duty means that the sales price of each pair of" export Europe "leather shoes increases by 200 yuan, which is not equal to driving us out of the EU market. The EU is our most important foreign trade market. AOKANG shoes 60% to 70% of the foreign trade products are exported to the EU market.

Li Haijun immediately reported the news to the top of the company.

Compared with domestic sales, export products account for only 15% to 20% of the total sales of AOKANG shoes, and Wenzhou's Tamar shoes, Jindi shoes and other export oriented footwear products enterprises are more strongly affected.

In the two years after the anti-dumping duty was imposed, the total production volume of the Tamar footwear industry decreased by 90%.

AOKANG leather shoes workshop.

"Low and Medium leather shoes, which are mainly competitive means at low price and running volume, are now subject to 16.5% anti-dumping duty on you. Who can stand it?"

There are no complaints from the bosses of Wenzhou shoe enterprises.

To this end, after the EU imposed anti-dumping duties, a large number of shoe companies abandoned the EU market.

"It is estimated that since the EU adopted anti-dumping measures against Chinese leather shoes, between 2005 and 2010, the total number of leather shoes exported to Europe has been reduced by 70 million pairs," Wei Ya Fei, director of the office of China Leather Association, said in an interview with an observer.

Take 2006 as an example, China's "export to Europe" leather shoes totaled $1 billion 355 million, multiplied by 16.5% of anti-dumping duty, that is, $more than 200 million.

That is to say, the importers of our shoe enterprises in EU countries have to pay an extra tax of 200 million dollars a year on anti-dumping duty.

In fact, because of the change of tax rate, it has resulted in more taxes and fees, which has led to a change in the export volume of leather shoes exported to Europe. This is not the first time.

As early as April 7, 2006, after several months of anti-dumping investigations, the European Union imposed a 6 month temporary anti-dumping measure on Chinese and Vietnamese leather shoes.

In this half year period, the EU's tariffs on Chinese leather shoes increased from 4.8% to 19.4%.

With the ups and downs of tariffs, the export volume of China's "export to Europe" leather shoes is also changing.

In October 5, 2006, on the date that the provisional anti-dumping measures for 6 months were about to expire, the representatives of the 25 member states of the European Union passed a 2 year 16.5% anti-dumping decision on Chinese and Vietnamese leather shoes at a 13:12 advantage (9 of which were in favour, 4 abstentions and 12 against them).

There seems to be a consistent interpretation of the outcome of the EU's voting.

"This is a strange game rule. Abstention votes are in favor. The average 5 year anti-dumping duty is now levied for 2 years.

Thus, to some extent, the anti-dumping case of the European Union is a product of political paction and compromise.

Yrjo Gorski, chairman of the European footwear purchasing Federation, has made such a public announcement.

"Although we have more than 160 involved enterprises (since China's accession to the WTO, the number of enterprises participating in anti-dumping counterargument is the largest), the EU has made relevant complaints, plea and reasoning at the first time when the EU carried out anti-dumping investigations on China's leather shoes, but it was levied by the European Union 16.5% anti-dumping duty." Wei Ya said with a slight reluctantly, "this is the rules of the game formulated by the European Union. You want to play with other people, and you must abide by this rule."

After observing the reporter's multi-party verification, the EU's rules of the game for Chinese leather shoes have the following characteristics: since the EU has not recognized China's market economy status so far, it is necessary to select a market economy country recognized by the EU as the third party in the production cost of the anti-dumping investigation related products, taking the shoemaking cost of the third party countries as the shoe-making cost of Chinese enterprises, rather than the actual production cost of Chinese enterprises.

"The EU chose Brazil as a third party country, that is, the cost of producing a pair of leather shoes in Brazil as the cost of making a pair of shoes for our national shoe companies."

Pu Ling, a lawyer with the reputation of "China's first anti-dumping counsel", told reporters.

Although Brazil and China are "BRICs", there is a huge gap in labor costs, the technology and technology of shoemaking, and the size of shoe enterprises, so the cost of producing a pair of leather shoes in Brazil is far more than the cost of shoe making in China.

The so-called dumping is, in short, the selling price below the cost price.

In addition, most of our leather shoes win in the European market with low price and running volume, so our middle and low end leather shoes can easily become the "prisoner of the EU" anti-dumping.

In addition to the "historical legacy" of market economy status, from December 11, 2005 onwards, the 5 year pition period of China's accession to the WTO is officially over, and the footwear industry has been fully liberalized. The EU has also abolished the quotas imposed on China's leather shoes industry for 10 years (1995 2005), and no longer restricted the number of Chinese leather shoes entering the EU market.

For a time, cheap Chinese leather shoes poured into European Union countries.

"Although there is no direct impact on the EU's shoe enterprises, it has caused psychological imbalance in the old shoe making countries such as Spain and Italy, so you have to find trouble."

Wei Ya Fei said.

"First debate" after the pition period

After failing to argue and reason, Chinese shoe companies picked up a legal remedy for the European Court to fight the European Union.

In October 23, 2006, AOKANG shoes filed a lawsuit against the European Union's lower court, suing the EU Council for issuing 16.5% anti-dumping duties, which do not comply with the relevant laws of the European Union.

The lawsuit, which coincided with the end of the 5 year pitional period of China's accession to the WTO, was put on the title of "the first debate" after the pition period of China's accession to the WTO.

In January 8, 2007, the footwear manufacturers' meeting on anti dumping proceedings was held in Beijing. On behalf of the 4 Chinese appeals companies, such as AOKANG group, Tamar shoes, Guangzhou Nanhai golden shoe shoe industry, new Hong Kong dollar shoe industry, etc., Wang Zhentao read out "China shoe enterprises' response to trade barriers Beijing Joint Declaration".

"This lawsuit must be fought.

In the face of EU anti-dumping, it is useless to be dissatisfied.

We are already a member of the WTO. We have applied the right of the WTO rules to us and let the EU see that Chinese shoe companies are not afraid of being bullied. We are brave enough to defend our dignity and fight against unfair actions of the European Union. We understand international law. "5 years later, chairman of AOKANG shoe industry Wang Zhentao told reporters," in fact, this lawsuit is winning for us, winning is even better.

Because China's accession to the WTO is relatively short, enterprises do not understand the rules of international trade game very much.

Even if we lose this time, we can learn a lot from it.

Next time we encounter anti-dumping, we also know what to do.

Moreover, there are errors and loopholes in the way and method adopted by the EU in anti-dumping investigations on Chinese leather shoes, the determination of market economy status and industrial damage of Chinese shoe companies, so we have a greater chance of winning.

Driven by the first appearance of AOKANG shoe industry, Wenzhou's Tamar and Guangdong's shoe industry, the new HK dollar and Guangzhou Wan have also filed suit.

In the face of this strong opponent of the European Council, 5 appeals companies formed an alliance of anti trade barriers cooperation organizations, and hired the same lawyer team to jointly deal with EU anti-dumping.

"The EU is very concerned about the call.

Anti dumping litigation should be shifted from "Single Soldier Combat" to "cooperative operation". We hope that more domestic counterparts will stand up and safeguard their legitimate rights and interests.

On January 8, 2007, Liao Yue, chairman of Wenzhou Tamar Shoes Co., Ltd., called on Beijing shoe manufacturers to respond to anti-dumping proceedings.

"But it is not so easy to let the competitors who are" sharp bayonets "in the market get together in the dense EU anti-dumping court.

In a word, the overwhelming majority of shoe companies choose to abandon the reality of anti-dumping litigation.

In addition to 5 responding enterprises such as AOKANG shoes, more than 2000 other enterprises involved in the lawsuit chose to give up their action.

"It will take two years to sue, and it will be about two years before the anti-dumping duty is imposed. This lawsuit will not cost money." we will not go to the EU market to develop new markets such as South America and the Middle East. "

At the briefing, the Chinese attorney general Pu Ling, 5 of the responding enterprises from Belgium, introduced the latest progress of the case.

In December 29, 2006, the court of first instance of the European Union formally accepted the litigation claims of 5 Chinese footwear enterprises, which meant that Chinese shoe companies took the first step in settling trade disputes by legal means.

"After the initiation of the proceedings, the EU Council and the Chinese enterprises will conduct two rounds of written defense in turn. The European Commission may serve as the third party to support the Council of the European Union, and then the oral defense of both sides.

A set of procedures, the total time is expected to be about 2 years.

The practice of Chinese shoe enterprises for their own interests has been widely recognized and recognized by the international community.

"Some Chinese shoe companies adopt legal means to prosecute the EU's anti-dumping measures in the European Court of justice, which is a very legitimate act. I personally express my appreciation and appreciation."

After the 5 shoe companies such as AOKANG filed a lawsuit against the European Union, SaiRi Amboin, then the EU's ambassador to China, said so.

The European times also published commentator articles on this issue, saying that Chinese enterprises should boldly protect their rights and interests by law.

Anti dumping "no sunset"

In the fierce confrontation between the 5 appeals shoe enterprises and the European Union Council in the European Union's junior court, the time came to October 4, 2008. The European Commission announced that the anti-dumping measures for Chinese and Vietnamese leather shoes will be reviewed at sunset.

The so-called "sunset review" refers to the administrative review when the product anti-dumping duty is expired, and it is also called the expiration review.

"Sunset review" will decide whether anti-dumping is going to continue to take effect, extend and raise tax rate or terminate.

According to experience, the EU's "sunset review" usually takes 12 to 15 months, and anti-dumping duties continue to be levied before the outcome of the review.

In March 16th, the European Commission issued a notice announcing that the anti-dumping duties on leather shoes produced by Vietnam and China should be formally suspended from March 31st.

"The result of this review is" sunset "or" sunset ", which has far-reaching implications.

Relevant enterprises should take an active part in anti-dumping "sunset review", which will be an important means for Chinese shoe companies and products to return to the EU market, and also a turning point in breaking the EU anti-dumping rulings.

On the first day after the "eleven" long vacation, in October 8, 2008, the relevant departments of the Ministry of Commerce, the Fair Trade Bureau, the Zhejiang provincial foreign trade and Economic Cooperation Department, the China Leather Association and other shoe related enterprises such as AOKANG shoes held a meeting in Wenzhou on the EU's anti-dumping review on Chinese leather shoes.

A good news from the European Union eased the tension of coordination.

In September 17, 2008, in a non binding vote held in the European Union, 15 of the 27 EU Member States opposed the measures proposed by Italy and other countries to extend anti-dumping duties.

On that basis, a spokesman for the EU Trade Commissioner Mandelson said that the review would take the fastest procedure, and that the general 12 to 15 months' review period is expected to be completed in 6 to 7 months.

"This shows that European countries hope to abolish the majority of anti-dumping duties."

Wei Ya Fei said.

The EU industry also has some degree of divergence. In the environment of economic depression after the economic crisis, many EU leather shoe importers and multinational investors in China hope that the EU will lift the high tariffs on Chinese leather shoes as soon as possible.

In addition, European consumers do not want the EU to maintain anti-dumping duties on Chinese and Vietnamese leather shoes in order to reduce consumption costs.

"The situation is good for us both inside and outside, and we will regret it if we miss this opportunity."

After the meeting, the shoe companies concerned targeted the "no damage defense" and "completely reversed the anti-dumping duty", and actively cooperate with the European Union anti-dumping investigation team's sample survey.

"This is only a tentative non binding vote of the European Commission, not the final result.

The decision passed by the Council of Ministers of the European Union in December 2009 is the final ruling.

In the meantime, there are variables. "

The 5 respondent enterprises that have already handed over to the European Union seem to have understood the rules of the European Union and started the "two line operations". On the one hand, the other shoe companies are actively preparing the sampling materials and collectively cope with the "sunset review"; on the other hand, they continue the anti dumping litigation that has been done before, and complete the proceedings.

As a result, if Chinese shoe enterprises collectively respond to the EU's "sunset review" failure, the lawsuit of 5 appeals enterprises such as AOKANG shoe industry can continue to fight, and strive for the market economy status of enterprises to reduce the losses caused by anti-dumping duties.

"But at that time, some people did not understand this double insurance practice. They believed that they should concentrate their efforts on" sunset review ".

A staff member of the appeal shoe company told reporters.

Later, it proved that the "double line operation" is a forward-looking approach to EU rules.

Because in December 22, 2009, Chinese shoe enterprises heard a news that no one would like to hear: on the 22 day, the Council of Ministers of the European Union adopted a vote on the anti-dumping duty imposed on leather shoes in China and Vietnam for another 15 months, which will be announced in January 3, 2010.

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AOKANG fight to the end

In March 4, 2010, the EU's junior court rejected the lawsuit filed by 5 Chinese footwear enterprises such as AOKANG shoe industry, and supported the EU Council to continue to impose anti-dumping duties on footwear products from China and Vietnam and to pay all litigation costs by 5 Chinese shoe companies.

"This is a naked trade discrimination policy.

We have been waiting for the last hope.

Until the end is very disappointed, but we will not give up, we will fight this lawsuit to the end, striving for a fair decision in law.

Wang Zhentao told reporters what he thought at that time.

"In the process of interpreting the anti-dumping provisions, the EU's primary court is based entirely on the field verification of the Chinese shoe companies such as the European Union in January 2009 and the AOKANG shoe industry. It affirmed that the European Commission has violated the principles of trade fairness in the anti-dumping investigation and ignored the evidence submitted by the Chinese shoe companies. There are unfair legal decisions," Pu Ling said. "The AOKANG shoe industry, our lawyers and the European Union lawyers are analyzing the evidence based on the decisions of the European Court of justice. We will take the next step according to the results of analysis and assessment, or will appeal to the High Court of the European Union."

In July 12, 2010, AOKANG group formally appealed to the high court of the European Union.

Wenzhou's Tamar, golden shoe shoes and other 4 other companies that originally took part in litigation shoes lost their lawsuit after the first instance.

"In fact, there is a big difference in whether we appeal to the high court of the European Union.

Some people think that the anti-dumping duty has been levied by the European Union for 4 years, and the first instance has lost the case. The appeal to the European Union High Court will not necessarily win. There is no need to spend so much manpower and material resources, "Luo Zhongxian, director of the AOKANG shoe industry, told the observer." finally, the board of the chief executive will fight to the end.

The story happened on Luo Zhongxian can also explain the determination and integrity of Wang Zhentao and AOKANG shoe industry in fighting with the European Union.

Luo Zhongxian, a lawyer who worked as a lawyer at a Beijing law firm, was specially invited to AOKANG shoes in less than a week after the EU formally imposed anti-dumping duties. As a lawyer of AOKANG shoe industry, a lawyer team, such as Chinese lawyer and James Searles, formed a lawyer team to deal with the EU anti-dumping lawsuit.

While the AOKANG shoe industry is struggling, the Chinese government is also actively taking action.

In response to the EU's practice of extending anti-dumping duties on Chinese leather shoes, Yao Jian, spokesman of the Ministry of Commerce, delivered a heated speech on this issue. China will appeal the WTO dispute settlement mechanism and take corresponding measures to safeguard the legitimate rights and interests of Chinese industries.

EU importers, retailers and many member states oppose the continued extension of the anti-dumping measures, and fully reflect the strong desire of the EU to restore normal trade in footwear products.

But the EU finally succumbed to the pressure of protectionism and insisted on extending anti-dumping measures against Chinese leather shoes.

On February 4, 2010, the representative of the Chinese government instituted a consultation request under the WTO dispute settlement mechanism on the EU's anti-dumping duties on leather shoes.

In March 31st, China and the EU held consultations, but consultations failed to solve China's concerns.

In April 8th, the Chinese government sent a letter to the chairman of the WTO dispute settlement body (DSB) through the permanent WTO delegation, requesting the establishment of the expert group's request for the anti-dumping case against China's leather shoes by the European Union, and formally launched the trial procedure of the expert group on WTO dispute settlement.

Return to "spring"

Under the relentless boycott and struggle of the Chinese government and AOKANG footwear industry, the European Commission issued a notice on March 16, 2011 that, since no application for review had been received from the EU footwear Federation, the anti-dumping duties on leather shoes produced by Vietnam and China were formally suspended from March 31st.

"After winter, it must be spring."

The European leather shoes orders originally placed in Vietnam, Malaysia and India are again flying back to China's shoe making enterprises as snowflakes.

"My main task now is to pick orders."

Li Haijun has been very busy this year.

More than Li Haijun is busy. The foreign trade salesmen who make shoes in the EU market are constantly placing orders and picking orders.

"If we attack the EU market with all our strength, our export to the EU market will double, at least 50%, but we will not do so, otherwise, we will introduce anti-dumping and antitrust investigations.

This year we control growth by around 20%. "

Li Haijun told reporters.

Improving product quality, refusing to fight price war again, and paying attention to the gold content of orders. After 5 years of training, Chinese shoe enterprises are returning to the European market in a more mature manner.

In March 3, 2011, the Fair Trade Bureau of the Ministry of Commerce held a "foreign trade follow-up conference on shoe products trade in China" in Wenzhou, Zhejiang.

At the meeting, the China Leather Association, based on the news from the European Commission and the European footwear industry alliance, reminded the domestic shoe manufacturers in good faith that in the coming period, the EU will also focus on the following 5 aspects:

First, the European Commission will focus on monitoring the import of all leather shoes to ensure that no new dumping and / or other unfair acts occur, thereby avoiding damage to the European industry again. Two, the European Commission said it would promote the use of mandatory labels for imported footwear products, make clear the origin of the products, prevent the counterfeiting of Chinese products from entering the European market; three, the European Commission has committed itself to strictly monitor violations of intellectual property rights; four, the European footwear Federation called on the European Commission to urge the Chinese government to open up high-end retail markets, hoping to make profits in China's fast growing consumer spending cycle. Five, the European Commission is investigating whether China's export credit policy violates the relevant provisions of the WTO, with a view to making difficulties in countervailing measures.

"For this reason, our shoe enterprises must control the number of leather shoes exported to the EU, extend the export period, and try to avoid concentrated exports from 4 to June this year."

Wei Ya Fei said.

Wang Zhentao believes that although the anti-dumping measures have been terminated, Chinese shoe companies should seriously study the laws and regulations of the European Union, standardize their own business practices, comply with the industry rules, and create a favorable environment for the export of Chinese shoe enterprises.

At the same time, Chinese shoe enterprises should take the initiative to go out and strengthen cooperation and exchanges with international shoe enterprises through the establishment of R & D, procurement centers and acquisition of international brands abroad, so as to achieve win-win development and truly solve the foreign trade friction.

"In order to grasp the right to speak on the international stage, the Chinese footwear industry must improve its R & D capability and brand value, develop diversified markets, optimize the structure of export products, and ultimately win the quality of products in the international market, rather than relying on low prices."