Business as usual at Canton Trade FairCity talk | Edward Chow 18 Oct 2019
The Autumn Canton Trade Fair opened in Guangzhou on Tuesday, so I decided to take a day off and visit via our 40-minute high-speed rail. The biggest trade fair in the world takes place in April and October every year and offers a great opportunity to feel the pulse of China’s economy and world trade.
The Fair involves three weekly sessions: engineering and electronic products; consumer and household products and textiles; and healthcare and leisure products. In short, just about everything made in China.
The volume of orders placed here offer clues for forecasting global consumer demand and China’s export performance for the first half of next year. This aspect is particularly important as the US and China have been engaged in a trade war that also impacts other economic blocks and nations.
As China practices a “planned economy” under its five-year state plan, the Belt and Road Initiative features prominently since President Xi became leader over six years ago. As a consequence, China’s outreach and trade promotion initiatives focused on countries along the belt and the road.
By coincidence, the traditional western economies are going through a period of lackluster growth with sluggish consumer demand.
The above scenario has transpired into changing patterns of visitors to the Canton Trade Fair over the last few years. Ten years ago, when I first visited the fair, the majority of visitors came from the US and Western Europe, followed by ASEAN visitors from Thailand and Malaysia.
This was followed by an increasing number of Middle Eastern, South American, South Asian and African visitors. In recent years, I also saw an increasing number of Eastern European and Russian visitors as their countries became more economically active.
Since the Belt and Road strategy began, there has been an increasing number of visitors from the Middle East and Near East. While they may not be ready customers, upcoming infrastructure projects will raise their standard of living and so demand for various types of goods and materials will rise. In time, the “fit” between China and these countries in terms of demand and supply will be seamless.
In line with China’s new policy to promote and balance two-way trade, another new trend has been to attract foreign companies to use the fair to showcase their products and services. This is a new phenomenon.
One previously prominent group of visitors has been those from the US and EU countries. Based on my observations at the April session and the current one, visitors from these wealthier countries seem to be conspicuously absent. Perhaps the ensuing sessions on household goods and clothing will make a change.
As I spoke to exhibitors and they found out that I was from Hong Kong, they invariably asked “How is Hong Kong coping ?“ out of care and concern. And when exhibitors from Zhejiang province, such as Ningpo, Hangzhou, and Yiwu, found out that my ancestral home was from Zhejiang as well, they became very chatty and said that for decades Hong Kong had been a role model and a dream place to be. But they did not like what they saw of late ………… At least, we should note that their hearts are with us.
As I close, you may wish to know that the financial big guns, our financial secretary Paul Chan included, are in session at the World Bank / IMF Annual Meeting in Washington DC. Next month will also feature the yearly APEC meeting when Trump is, again, looking forward to meeting his good friend President Xi. Whether it will be a big hug, handshake or spat, time will tell! Have a good weekend!
Edward Chow is a current affairs commentator.