What Mr Gao was likely to achieve in his talks with EU officials was the removal of some sports shoes from the EU action and lower anti-dumping duties, in a compromise to maintain amicable Sino-EU trade relations, said Mr Sim, a partner at US law firm White & Case.

The EU is scheduled to make a decision by April 7.

If the EU imposed duties on Chinese and Vietnamese leather shoes, Kingmaker Footwear Holdings might set up factories in other countries, said its marketing manager Phillip Kimmel.

All of the Hong Kong-listed shoemaker's production is based in China and Vietnam.

To avoid anti-dumping duties, Kingmaker might change the material make-up of its shoes so they fall outside the 'leather upper' categories considered in the EU anti-dumping investigation, he said.

Uncertainties created by trade disputes between China and the EU eroded Kingmaker's sales to the EU in the six months to September last year by 22 per cent to $208.9 million, according to its 2005 interim report.

'We're not selling below cost, so how can that be dumping? We've spent a lot of money on lawyers to present our case to the EU but so far that has not yielded much result,' said Mr Kimmel.

Hong Kong-listed Yue Yuen Industrial (Holdings) was one of the 13 shoemakers whose mainland factories were investigated by the EU, said investor relations director Terry Ip Ming-chung.

Mr Ip expected all 13 firms, including Yue Yuen, to be given non-market economy status by the EU, because it made a similar decision on all Vietnamese shoe factories at the end of last year.

Yesterday, EU member states denied market economy status to Chinese shoemakers, paving the way for imposing anti-dumping duties on shoe imports from China.

'Member states met this morning and there was overwhelming support for the [EU] proposal not to grant market economy status to 13 Chinese companies,' a spokesman for EU trade commissioner Peter Mandelson said.

An EU official said Mr Gao met Mr Mandelson on Tuesday and EU Director-General of Trade David O'Sullivan on Wednesday, mainly to discuss the anti-dumping case.

A Chinese official said: 'We believe Chinese shoes should not be subject to anti-dumping measures by the EU.'

On Wednesday, British Retail Consortium (BRC) director Kevin Hawkins had a 'very positive meeting' with Mr Gao to discuss how to prevent anti-dumping duties, according to a BRC press release.

'We welcome the priority that Beijing is attaching to preventing any anti-competitive measures the EU is considering imposing on shoe imports. We also agree that should duties be imposed by the EU, this could set Europe on a dangerous course of action with one of our most important trading partners,' said Mr Hawkins.

Mr Mandelson, in a letter to Mr Hawkins, acknowledged the concerns of the British retail sector on the possibility of EU anti-dumping duties on leather footwear and plastic bag imports from China.