Thu, Dec 13, 2007 - Page 11 News List

Concerns on safety, tariffs hurt Chinese shoemakers

FALLING BEHIND Small and medium sized shoemakers were driven out of business by larger, better operated firms as competition stiffens in the world's shoe capital

AFP , SHANGHAI

Nearly 1,000 Chinese shoemakers have gone bankrupt this year in southern China, unable to make ends meet under increasingly tough business conditions, state press said yesterday.

Anti-dumping measures, a stronger local currency, increased labor and material costs, and a rolling back of export tax breaks has led to the wholesale bankruptcy in Guangdong Province, the China Business reported.

OUT OF BUSINESS

The state-run newspaper, citing a report from the Asia Shoe Industry Association (亞洲鞋業協會), said that 1,000 smaller and medium footwear and accessory producers had ended operations this year.

Up to 500 companies closed their doors in the last three months alone, as Guangdong's shoe industry faced competition that was 10 times stiffer than the 1990s, the paper quoted Asian Shoe Association Secretary Li Peng (李鵬), as saying.

Guangdong is a shoe manufacturing hub for China and the world, with 7,000 to 8,000 shoe factories, according to the China Leather Association (中國皮革協會).

In the city of Dongguan, home to 1,000 shoemakers alone, up to 300 firms had closed, Li said.

These smaller companies, which rely on cheap pricing strategies and often have weak management practices, are increasingly unable to compete against larger, better operated companies, according to Li.

However, Li said that the closure of these weaker firms was not necessarily a bad thing as it would weed out the poor quality manufacturers, thus improving the development of the industry as a whole.

"For firms with high-added value it could provide a better environment for competition," he said.

China's shoe industry has come under huge pressure from overseas as the EU last year and Taiwan this year enacted anti-dumping tariffs, according to the paper.

The industry had also suffered from recalls overseas of Chinese-made exports, one of the many industries to have been hit by recent global concerns over the safety and quality of products made in China.

RETAIL SALES JUMP

China's retail sales, the key measure of consumer spending in the world's fourth largest economy, jumped 18.8 percent last month from a year earlier, government data showed yesterday.

The figure released by the National Statistics Bureau compared with an 18.1 percent growth in October, while in the 11 months to last month, retail sales rose 16.4 percent to 8.02 trillion yuan (US$1.08 trillion).

Retails sales figures this year have jumped sharply in the third and fourth quarter, mainly due to soaring inflation, which hit a near 11-year high of 6.9 percent last month.

Among the sectors that saw sharp rises in monthly sales, with the sharp increases in the total value sold linked to the higher prices -- meat, poultry and eggs were up 45.3 percent, and autos were up 35 percent.

Clothing sales rose 29 percent, while daily consumer goods were up 31.3 percent, the bureau said.

Sales of household appliances increased 27.5 percent while sales of grain and edible oils rose 48 percent year-on-year.

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