The European Union is planning an anti-dumping investigation against fabric shoes made in China, following charges against labor safety shoes and leather shoes, said the China Leather Association.

Association spokeswoman Wei Yafei said the commerce ministry, industrial chamber of commerce and the association will hold a conference giving information about the investigation for shoe businesses next week in Qingdao, east China's Shandong Province.

"It will help firms learn about some technical issues, such as the investigation procedure and how to answer the questionnaires," she said. "They can also get in touch with lawyers."

The EU move is expected to involve more businesses than the leather shoe investigation, which covers nearly 30 categories of shoes and affects more than 1,000 shoe manufacturers.

Over 70 enterprises have submitted the completed forms and materials requested for the leather shoe investigation.

Although the figure only accounts for a small proportion of the companies involved, it includes most of the major leather shoe producers in China.

Meanwhile, Wei suggested that enterprises should pay attention to certain issues before the final rulings are released.

"They should make an active effort to adjust the industrial structure and trade methods, and try to avoid bad practices in the international markets," she said.

Companies are encouraged to diversify their export markets in order to avoid more anti-dumping charges from certain markets.

"We hope they would improve their technology and develop new products with high added-value," she said.

"As for those footwear producers that have not yet responded to the case, they should also look for a solution for themselves," Wei said.

Some of these companies, mainly those doing OEM (original equipment manufacturing) for international brands, are unaware of the anti-dumping charges.

"Many such enterprises only have a manufacturing department, instead of a full industrial chain from strategy-making, research and development (R&D) to production and sales," she explained.

She feared that it will be too late for the companies to adjust when the outcomes of the investigations are announced.

As the European Union is the second largest export target of Chinese footwear, following the United States, unfavorable anti-dumping outcomes would be a huge blow to the Chinese shoe manufacturing industry.

China exported about US$800 million pairs of shoes, worth more than US$2 billion, to the European market last year.

With the low cost of labour and material, Chinese footwear makers have enjoyed a fast expansion in the overseas markets in recent years, spurring the concerns of foreign competitors.

Brazil is also reported to be preparing to increase its anti-dumping penalty tariff rate to 35 per cent from 15 per cent.

(China Daily August 7, 2005)