Canton Fair Sends Strong Signal of Export Upturn

Canton Fair
Updated: 10/22/2009 12:12:00 AM

An important barometer of China's foreign trade, the Canton Fair reported late Tuesday a strong rebound in foreign purchase and buyers compared with the last session in April, an encouraging sign of the country's export amid the continuing global recession.

The first phase of the biannual 106th China Import and Export Fair from October 15 to 19 saw an export volume of about 15.6 billion U.S. dollars. That's up by 19.6 percent over the last session, said Chen Chaoren, spokesman of the fair in the southern Guangzhou City.

More than 90,000 buyers participated in the fair, an increase of 11.4 percent against the last session. Those from the United States and Europe grew by 18 percent and 38 percent despite the shrinking markets in the two regions, Chen said.

Orders in home appliances, electronics, hardware, tools, transporting vehicles and building materials, which took up at least 60 percent in China's export every year, reported an increase of 20 percent.

The numbers indicate that some international buyers are not holding their purses as tight as before, and China's export industry is showing signs of an upturn after suffering the negative impact of the financial crisis for a year, Chen said.

Du Yuanyuan, board chairman of the Leiyang Electronics Technology Co., Ltd , said the company mainly producing liquid crystal TV received large long-term orders at the fair. "The situation is expected to be better next year."

While some booths were vacant in April, the autumn fair's 50,000 booths fell short of more than 80,000 applicants. Buyers carrying suitcases crowded exhibition halls. They wanted to collect as many company brochures as possible for information before setting deals.

Wang Zhiping, vice director of the fair, said there was an "obvious" increase of orders that were each worth more than 10 million U.S. dollars.

"Some companies even set deals worth 70 million dollars at the fair. This is a sharp contrast with the small and short-term orders in April," he said.

Yao Wenping, vice president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said she is confident of the international market for Chinese products, although the demands have tumbled due to lowering buying capabilities and remaining stocks in the western markets.

"The demands, including those from the U.S. and Europe, are expected to increase largely next year," she said.

"I am glad to see that many companies have found the root of their problems and tried to improve," she said.

"Instead of competing with low prices, lots of companies are adopting a strategy of creating new products and own brands to defend against the financial maelstrom," she said.

Tao Jianxing, board chairman of the Chunlan (Group) Company, a major producer of home appliances, said the company has been making efforts to attract buyers with innovation instead of a low price.

"The large orders we have received at the fair show our strategy is a success," Tao said.

Despite the signs of recovery, Chinese exporters and officials remain cautious. They said they do not expect the global trade to reach the level in 2007 in the near future as the trend of the world economy is still uncertain.

Zhu Baorong, an official in charge of export in east China's Jiangsu Province, said the sharp rise of trade volumes was based on the drop in the recent year and the sustainability of the growth is still unsure.

The export recovery still depends on the government's stimulus measures, and the tentative rebound will be affected if the favorable policies are due, said Xiao Yaofei, professor with the Guangdong University of Foreign Studies.

China's export industry is also under huge pressure of protectionism.

The Weihai-based Triangle Tyre Co. Ltd is one of the victims of an up-to-35-percent tariff levied on the made-in-China tyres by the U.S. government.

Its exports to the United States were slashed by two thirds to 100,000 units a month after the punitive tax was added.

Yi Xiaozhun, deputy minister of the Ministry of Commerce warned exporters to be alert of the tough conditions and urged them to prepare for the difficulties.

But he also assured exporters that the government's stimulus policies will remain "consistent" in the days ahead as they are "very important" to a solid recovery.