China companies turn back on EU contract breaches
2012-09-10 17:30 (GMT+8)
A sport shoes company in China's southern province of Fujian, which has incurred losses from unexpected order cancellations from its EU partner. (File photo/Xinhua)
Several of China's exporters in the country's southern province of Fujian reportedly have decided to file a joint lawsuit against the unreasonable cancellation of orders from European companies to the Chinese government.
The unprofessional move from European firms have been causing a deterioration in China's exports since the beginning of the year. China's Customs Bureau on Sept 9 released an export report for August indicating that exports to the EU dropped 16.6% compared to last month.
Fujian-based Hai Ling trading company in July filed a lawsuit against French Auchan Shanghai to request the latter to continue the fulfillment of the contract.
Lin Feng, owner of Hai Ling, said that Auchan in March unexpectedly cancelled a batch of 28,000 shorts the company ordered in January, causing Hai Ling to lose more than US$10,000. Then, the French company drew back the other batch of 10,000 shorts without reason in July, according to China Times.
Themis trading company, located in Xiamen of Fujian, said that the company has started running a marble business instead of dealing with its European partners. One sales official of a trading company, based on Fuzhou of Fujian, also said that the orders of European market have reduced 30-40%.
The situation has concerned the Chinese government. Europe accounted for one third of total cases, up 20% form a year earlier, especially in Greek and Italy, said China Export and Credit Insurance Corporation.
