ASEAN Zero Tariff Stimulates Export Of Chinese Shoe Products

The EU is the main export market for Chinese shoe enterprises. The export of Chinese shoe enterprises to EU shoes has declined for two consecutive years, thanks to the anti-dumping duty.

In order to ease the pressure on the EU market, Chinese shoe companies intensified their efforts to expand the ASEAN market last year.

Since January 1, 2010, the China ASEAN Free Trade Area has been built. It is the first trade zone established by our country.

The China ASEAN Free Trade Area will have a total population of 1 billion 900 million, close to US $6 trillion gross domestic product, and a total trade volume of US $4 trillion and 500 billion.

Such a large trade volume, tariff reduction to zero, the export footwear enterprises are very good, is the best opportunity for shoe companies to enter the ASEAN market with the opportunity of establishing free trade zones.

What is zero tariff?

According to the FTA agreement, about 7000 products between China and ASEAN will enjoy zero tariff treatment.

That is to say, 90% of the trade products of both sides will achieve zero tariff.

This is a great achievement.

With the principle of mutual benefit, win-win cooperation and common development, China and ASEAN have deepened and expanded their cooperation in various fields.

The benefits of zero tariff will be obvious to both sides.

In recent years, the economic and trade ties between China and ASEAN have become increasingly close, and the scale of bilateral trade and investment has expanded rapidly.

ASEAN is China's fourth largest trading partner and China is the third largest trading partner of ASEAN.

ASEAN is becoming an important market for Chinese enterprises to invest abroad.

With the completion of the China ASEAN Free Trade Area, the amount of foreign capital absorbed by ASEAN will steadily increase.

Statistics released by Guangzhou customs 16 showed that between 2010 and February, Guangdong exported 1 pairs of shoes and valued at 1 billion 810 million US dollars, representing an increase of 42.5% and 12.8% respectively over the same period last year.

The volume of exports has exceeded the level before the financial crisis.

Among them, exports to ASEAN amounted to 140 million US dollars, an increase of 91.4%.

Customs analysis said that the main reason for the apparent growth of Guangdong's shoes exports was due to the comprehensive establishment of the China ASEAN Free Trade Area, and zero tariff stimulating export growth.

After the majority of the products achieve zero tariffs, the cost of Chinese exports to ASEAN or ASEAN will be greatly reduced.

This will be very helpful for shoe enterprises to brand in ASEAN market.

However, if the shoe companies are going to enter the ASEAN by way of OEM, there is no advantage at all. ASEAN's production factors are even cheaper than ours.

If shoe companies want to take a firm foothold in ASEAN, they can conduct brand introduction, open stores or develop distributors in ASEAN.

Because the domestic shoe market has been saturated with the layout of many brands for many years, and although each brand has its own territory, it has been very difficult for the brands to expand their market share. However, ASEAN has hundreds of millions of people, and its market space is still very large. The market will still have a large market space. The sooner the brand entering the market will compete for its share, the better the opportunity will be; and after the realization of zero tariff, the cost of shoe brand entering the market will be greatly reduced. For example, when the product is exported to the distributors in ASEAN countries or shipped to the local direct stores, it will not only do not need to pay customs duties, but also will reduce the expenses for other distributors.

More importantly, the Chinese shoe brand has great competitive advantages both from international brands from Europe and the United States, or from ASEAN's local brands.

"Because the consumption level of ASEAN market is generally low, compared with the international brands in Europe and the United States, China's shoes brand will have strong price competitiveness.

Compared with the brand of ASEAN, after the narrowing of the cost gap between the two sides, Chinese shoe enterprises have many years of brand operation experience in China's domestic market. They will have great advantages in the brand promotion and sales system construction in the local market, and the capital strength will be stronger than that in the local market.

At the same time, there are also many shoe enterprises that want to avoid trade barriers in ASEAN factories and take advantage of the "zero tariff" of the China ASEAN Free Trade Area to prepare for pferring some of their production lines to Southeast Asia. This will help greatly to avoid trade frictions in the future. Some countries with shoes making foundations, such as Indonesia and Kampuchea, are all interested in investing in shoe enterprises.

However, for shoe companies themselves, there will be risks in setting up factories in ASEAN.

Although the cost of local labor in ASEAN is lower than that in China, because ASEAN's shoe making facilities are far less than China, many raw materials need to be supplied from home, production efficiency is relatively slow, and workers' proficiency is not as good as China's. The most important thing is that shoe companies do not know the local cultural background and have great difficulties in operation and management.

Therefore, before the shoe companies go, they should be cautious. When they enter ASEAN, they will play cards according to local rules.

With the advent of the "zero tariff" era, the shoe trade between China and ASEAN will further accelerate, and more conducive to the entry of some Chinese shoe brands into the ASEAN market.

ASEAN is a blue ocean to wait for. The shoe companies should seize the opportunity to create brilliant results.