Exporters lower sights for sales at Canton Fair as woes persist

Foreign buyers check out largescreen television sets at the China Import and Export Fair, also known as the Canton Fair, which opened on Wednesday in Guangzhou, Guangdong province. ZOU ZHONGPIN / CHINA DAILY

Lower overseas demand will likely continue to exert pressure on Chinese exporters in the months ahead, as exhibitors met fewer potential buyers on Wednesday at the opening of the nation's largest and most famous trade fair.

"We had fewer customers today. We are worried that the downsized business of the past months will continue in the near future," said Ye Zhongjie, an export manager at Ningbo Tianhua Electric Appliance Co.

Ye's company is among thousands of Chinese exporters that hope to meet more overseas buyers at the China Import and Export Fair.

The fair is held in Guangzhou, the capital of Guangdong province, twice a year. Known as the Canton Fair, it is seen as a barometer of China's foreign trade.

External Link: Official website of Canton Fair

Tianhua Electric, based in Zhejiang province, manufactures and sells electric goods to Europe and South Africa. Its sales fell almost 10 percent in the first seven months, according to Ye.

"To our knowledge, sales of most manufacturing companies in the Pearl River Delta and Yangtze River Delta declined or only increased a little in the first six months of the year," Ye said.

Ye attributed the weak business to low overseas demand and increased domestic production and labor costs.

"The overseas market has yet to fully recover (from the global financial crisis), and we had to use automated equipment to reduce labor and production costs to cope with the business decline," Ye said.

According to the fair's organizers, the number of foreign buyers is down due to an uncertain global economic situation and the spread of the Ebola epidemic.

"We are very cautious about transactions at the fair because of the incomplete recovery in global demand and the lower number of foreign buyers," said Liu Jianjun, spokesman for the fair.

Despite a surprise surge of 15.3 percent year-on-year in exports in September, China's overall trade increased only 3.3 percent year-on-year in the first three quarters, according to customs data.

"The slow growth of trade in recent quarters indicated a slow recovery of foreign demand for Chinese goods. It will be difficult for China to realize its trade goal for the whole year," said Liu Ligang, chief economist in China with Australia and New Zealand Banking Group Ltd.

China, which has set a goal of a 7.5 percent year-on-year increase in trade this year, failed to realize its trade targets in 2012 and 2013.

Liu Ying, a manager at Shenzhen Uni-right Industrial and Trading Co, said that declining foreign demand had forced the company to focus on selling high-tech products in specified destinations.

"After watching business decline for months, we had to boost our competitiveness in the global market by selling more value-added products," Liu said.

The company, which specializes in selling small home appliances to the United States and the European Union, reported sales of about $40 million in 2013.

"Based on the current lower external demand, it is very difficult for us to achieve business growth this year," Liu said.

Wu Chengke, a sales manager at Ningbo Aux Import and Export Co, said the company had to focus more on the development of specific products for different markets.

"For example, we developed lower-priced air conditioners for the African market, which helped us maintain sales growth in the region," Wu said.

We are very cautious about transactions at the fair because of the incomplete recovery in global demand and the lower number of foreign buyers."

External Link: Canton Fair E-Hall