Spanish shoe stronghold under siege from imports

Spanish and politicians have accused businesses from China of destabilizing Spain's shoe industry.

These critics accuse Asian firms and their governments of unfair competition, but others say Spain should stop its whining and face the ruthless global economy.

The most visible protests have occurred in Elche, a southeastern city of 200,000 which has made a living mainly from shoe production for half a century.

Not only does China make footwear at prices Spain cannot dream of competing with, but Chinese businesses don't even market their shoes through Spanish intermediaries anymore; they buy warehouses in Elche.

"We have cut our production costs as far as possible, but the Chinese always sell cheaper," said Pedro Mendez, chief of the Elche footwear producers' association.

Spanish production shrank by 12 percent last year, and 4 percent of jobs were lost in a sector employing 45,000 people, according to the Spanish Footwear Industry Federation.

Seven 10 pairs of shoes sold in Spain are made elsewhere.

Elche's say many local shoe factories have had to close. The discontent prompted a violent protest by some 500 people in which two Chinese shoe warehouses were set on fire last month with chants of "Chinese out." The incident caused diplomatic tension, with the Chinese consul accusing the demonstrators of racism and the police of passivity in the face of arson. China allowed a counter-demonstration in Beijing.

Spanish say China's competitiveness is based on miserable salaries and unsafe working conditions. In Spain, the Chinese "cheat customs by importing more shoes than they say in each container, do not charge VAT, keep their shops open at any time and do not comply with sanitary regulations," Mendez said.

Some Elche businesses, however, admit that the Chinese are only doing what they themselves did to Italian, French and German competitors in the 1960s. The Chinese just "copy and make shoes cheaper," footwear producer Jesus Canovas said.