China has criticized the newly imposed European Union (EU) tariff on Chinese shoes as short-sighted and a cave-in to protectionist sentiment in a small number of countries.

An official with the Ministry of Commerce said here Monday that the European Commission had violated the principle of free and fair trade advocated by the World Trade Organization (WTO) in its investigation and ruling on the case.

The new measures would hurt Chinese shoe makers but could not benefit the EU, said the official.

The EU's final ruling last week states that shoes from China are subject to 16.5 percent duty for two years starting Oct. 7.

Dumping does not exist with Chinese products, said the official, adding that China's shoemaking industry is highly competitive. More than 1,000 companies exported shoes to the EU, most of which are private or foreign-invested.

"It is impossible for those companies to sell their products at a price lower than cost," said the official.

The official denied that there were any government subsidies to the companies, saying China had abolished export subsidies after joining the WTO.

According to EU figures, China exported 1.25 billion pairs of shoes to Europe in 2005 and holds 50 percent of the European market. The Chinese figures show that China exported 700 million pairs of shoes to Europe in 2004.

The official attributed the rapid growth of Chinese shoe exports to the EU last year to the ending of the EU's quota system which lasted 10 years.

The EU's ruling that Chinese companies are guilty of "dumping" ignores the fact that these companies are fully-fledged private enterprises that do not benefit from subsidies, said the official.

The European shoemaking industry has lost its comparative advantages due to high labor costs and a lack of investment in technology. In recent years shoemaking companies have been moving out of the EU, impacting employment, the official said.

But that is a normal phenomenon in international business and existed even during the ten-year period of the quota system, according to the official, who said it was too easy to blame the situation on Chinese imports.

The EU's refusal to recognise firms' market economy status runs against its WTO obligations and is inconsistent with its own regulations.

Given that only nine nations voted for the new tariff with 12 EU members against, there are clearly problems with the EU's anti-dumping ruling, said the official.

WTO members have the right to adopt anti-dumping measures, but the investigation and ruling should comply with WTO regulations, said the official.

Source: Xinhua