Canton Fair orders plunge Go back »
2008-11-05 | South China
Orders have dropped by a third at the ongoing Canton Fair as foreign buyers tighten their belts amid the global financial crisis. Buyers slashed orders by about 13 billion U.S. dollars compared with the same period during the last fair.Contracts signed in the first two phases of the biannual 104th China Import and Export Fair in Guangzhou totaled $24.76 billion, said Mu Xinhai, a spokesman for the fair, Wednesday. It is sharply lower than the $38.23 billion of orders placed during the last fair, which had only two phases. This fall's fair has a third phase, which begins Nov. 2.
This fair's second phase, which ran from Oct. 24 to Tuesday and mainly featured consumer goods, gifts and home decorations, achieved deals worth $8.31 billion, Mu said. Orders from the European Union, the United States and the Middle East were $2.76 billion, $1.17 billion and $770 million, respectively, which accounted for 56.6 percent of the total volume of the second phase, Mu said.
Analysts say the third phase of the fair, which mainly includes textiles and garments, shoes, and medical devices, is not expected to bring a sharp increase in the trade volume.
Orders for home appliances and electronics, which were featured in the first session, posted marginal increases, but trade in toys, furniture, hardware, tools, machinery, and vehicles and spare parts in the second session declined.
Orders for machinery and electronic products, which analysts had said were the last hope of driving up trade volume for the fair, slid 12.9 percent from the last fair to $13.92 billion.
Overseas buyers were fewer also. About 140,000 foreign buyers attended the fair’s first two phases, compared with 192,013 at the last fair.
"Maybe it's because the location of our booth is not good enough, but in general we received fewer visitors this year, especially those from the United States," said Chen Jingjuan of Zhangjiagang Silverstar Manufacturing Co.
Chen's firm is a small one with only about 90 employees, exporting about $4 million worth of goods annually. Even though their exports didn't decrease, they are earning less, Chen said.
"It'll be harder ahead because we have no idea of the amount of orders for next year," Chen said.
The first two phases showed signs that markets in Asia, Africa and the Middle East are replacing U.S. and European markets as the main destinations for Chinese exports.
Orders from other Asian countries reached $183 million during the second phase, up 13 percent from last fair.
Houssam Mangosh, a businessman from Liberia, said he plans to buy $1.5 million worth of goods from China this year, a 50 percent increase.
Orders from the United States during the first phase dropped the most to $1.63 billion — about one-third of last year's volume.
"We are undergoing a very hard time. Our sales dropped by 10 percent in the last quarter," said Vincenzo Carrieri, director of retail giant PPR Purchasing Asia. PPR has been sourcing consumer electronics and home appliances from China for more than 10 years.
"But I think China will remain a top location for our purchasing," he said. "I can't think of any other country that can edge out China in manufacturing."
The pace of expansion of exports during the first three quarters slowed by 4.8 percent from last year, growing by 22.3 percent to $1.07 trillion, according to the Ministry of Commerce.
Between the first two phases of the fair, the government decided to raise the export rebate for labor-intensive products in order to stimulate export.
Tax incentives are expected to boost the confidence of exporters, help them fight against the global financial woes and maintain stable export growth. But analysts say exporters still face other problems like rising costs, soaring wages and a worsening external economic environment.
(Source: Shenzhen Daily)