Cautious Optimism at the 106th Canton Fair

Canton Fair
Updated: 10/28/2009 12:26:00 AM

A purchaser talks to an exhibitor in a tyre booth. (Guangzhou Daily)

Today (Oct 27) is the last day of the second phase of the Canton Fair. After the spring session which saw a dramatic decrease in the number of attendants, this session both the number of attendants and exhibitors is on the rise, bringing a wave of optimism to all.

Although statistics and the sales volume remain weaker than 18 months ago, walking around the fair and talking to purchasers gives a strong feeling of confidence which is ¨C for now ¨C maybe all that it takes to save to fate of many Chinese exporters.

As expected, it is the well established companies that see the first orders flow in. Manufacturing companies in the business for a number of years and with regular customers abroad mention increases in orders from 10% to 25% compared to April.

Purchasers seem equally optimistic but an interesting change has occurred. When asked in April why they were here, the most common answer was to seek out new opportunities that arise amidst any crisis, to develop new business whilst competitors were holding back on investment. This session, that speech has disappeared and strangely enough, when asked if the financial crisis has affected the way they buy and what they buy, the answer is more often than ever that it hasn't changed a single thing.

A new development worth mentioning is the opening, for the first time in the history of the Canton Fair, of a domestic buyers centre that has succeeded in attracting large retailers such as Carrefour, Changchun Ouya Group and Wuhan Zhongbai Group. This new development, encouraged by the Chinese Ministry of Commerce (MOC), already started to emerge in spring, but only 30% of exhibitors expressed interest in cooperating with Chinese buyers. This session, according to the fair organizers, that number has jumped to 80%, but some Chinese manufacturers still have some reserves about doing business in China. The reason for this is rather simple: the two markets obey different rules, have different marketing channels, and most importantly, have different payment regulations.

As the curtain closes on the 2nd phase of the fair, "cautious optimism" seems to be the feeling shared by most people inside the Pazhou complex. Orders are being placed and hands are being shaken, guaranteeing that in the next few months, tens of thousands of containers will be leaving ports across China. Finally, the temptation was there and I couldn't resist it, I had to ask the simple and naïve question that has no definite answer yet: "Is this the end of the crisis?" The answers were of course diverse but there was one thing everyone seemed to agree: "we bloody well hope so."