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Disappointed and dissatisfied as they are, Chinese shoemakers have stayed calm as the European Union (EU)'s two-year anti-dumping duty on China-made leather shoes took effect on Saturday.

Under the EU's new policy, European shoe importers will pay a 16.5 percent tariff on Chinese-made leather shoes and 10 percent on shoes made in Vietnam.

Children's shoes, which were not covered by the provisional anti-dumping duties introduced since April 7, are now subject to the definitive duties.

According to EU figures, China exported 1.25 billion pairs of shoes to Europe in 2005, however the exports may drop 10 percent after the introduction of the levy, members of the industry have said.

"We're not surprised at the anti-dumping duty levy at all. After all, it's not the first time," said Xu Hongzhen, vice manager-general of the Wenzhou-based Jierda Shoes-making Com., Ltd., after a grand party held by the company to celebrate the traditional Moon Festival on Friday night.

In April, the EU imposed six-month tariffs of 19.4 percent on leather shoes from China and 16.8 percent on those from Vietnam.

"Ever since then, I know a long-term punitive duty will come sooner or later, though it is extremely unwise for EU to do so," said Xu.

As an important shoe manufacturing base on the Chinese mainland, Wenzhou in eastern Zhejiang Province is home to nearly 4,000 shoemakers, employing more than 400,000 workers and producing 600 million pairs of shoes annually.

Last year, Wenzhou exported 438 million pairs of shoes at a combined value of 1.58 billion U.S. dollars. One third of the exports were sold to the EU. Wenzhou's leather shoes export to EU accounts for about one fourth of China's total to EU.

But customs statistics show that in June and July, the shoes export from Wenzhou dropped by 7.17 percent from the year-earlier level.

"At the highly globalized international market today, the 16.5 percent anti-dumping duties will not only drag China's shoemakers down from their superior position amidst fierce competition but also make it hard for the medium- and small-sized firms to survive," said Xu.

What's more, the anti-dumping duty sanction runs counter to the free trade policy initiated by the European Commission and it will not save the declining shoe-making industry of EU in a real sense, he said.

The EU's latest move on anti-dumping duties was also widely criticized by European business and consumer groups, which say that such measures will lead to job losses in the retail sector, and hurt millions of consumers

"An old Chinese saying says moving stones can roll over your own feet. Though the anti-dumping duty is a strike for Chinese shoes firms, the EU retailers and consumers are also victims of the EU's decision," Zhou Yaohua, vice president of the Wenzhou-based Dongyi Shoe-making Com.,Ltd., told Xinhua on Saturday.

To counteract the impact of EU's anti-dumping tariffs, Chinese shoe manufactures have shifted their eyesight on the new markets in Southeast Asia, South America and Oceania as well as speeding up expansion of the domestic market.

"We have made preparations to open the markets in South America and Australia since the EU planned to carry out anti-dumping investigation last year," said Xu.

The orders from EU have decreased obviously since it imposed the anti-dumping tariffs in April, but our overseas sales volume so far is almost equal to that of last year as the sales in the new markets had increased rapidly, said Xu.

The Aokang Group, the country's second largest shoemaker, focuses more on the mainland market to diversify the risk of intensifying competition at overseas market.

Aokang plans to invest 1 billion yuan (126.58 million U.S. dollars) to build a western shoe-making capital in the southwestern municipality of Chongqing.

"The low labor price and huge market in western China are not resistable for the development of Aokang," said Wang Zhentao, Aokang's president.

In addition, to tackle the tariff issue, Chinese shoe firms have also begun to build overseas factories in Russia, Nigeria and even in EU member countries.

"To cooperate with foreign shoemakers would not only help Chinese firms to avoid EU's anti-dumping duties, but also help Chinese shoes step into the international market," said Xie Rongfang, secretary of the Wenzhou Shoe and leather making industry association.

Xie cited the example of Aokang, which produces shoes with its Italian partner GEOX in Italy and more than 70 percent of their products sells at EU market.

The EU's anti-dumping duty sanctions has also promoted Chinese shoes producers to update their strategy for development.

"The development of Chinese shoe-making industry can not always rely on low cost. Improving the quality and grade of our product is the only way out," said Wu Chunyue, general manger of the imports and exports corporation under the Aokang Group.

In a long-term view, the trade barriers like anti-dumping, would force the Chinese shoe-making industry to shift its growth mode from currently quantity-oriented way to quality-oriented way, said Xie.

In the world's industrial shoe chain, the EU is superior in the design, technology, equipment and sales network, but China is good at processing and has a low-cost labor force, according to Xie.

It is unfair to portray Chinese shoe firms as lacking the product quality or promotional imagination to succeed on its own in foreign markets, but Chinese shoemakers should realize the importance of branding to the future of China's shoe-making industry, said Xie.

"As long as it remains a maker of cheap sneakers, China will have to endure constant repetition of shoe wars. So, what we should do is to take the challenge as another opportunity for development," he said.