According to government and industry sources familiar with the matter, the dispute centres on Moftec's biannual China Export Commodities Fair (CECF), whose spring and autumn sessions attract hundreds of thousands of people to Guangzhou.

'It's a real cash cow for Moftec. They don't want to give it up,' one source said. 'Basically, this dispute is all about money and which department gets it.'

It is understood that CECF has demanded terms which are unacceptable to Guangzhou to move from its current home in the centre of the city, which is owned and operated by Moftec, to the new facility situated on Bazhou Island on Guangzhou's southeastern outskirts.

The fair's demands are believed to include a nominal rental charge and management control of the conference centre, in return for which Guangzhou would receive a portion of the proceeds.

Sources are confident that the dispute will ultimately be resolved. They say that the prospect of Guangzhou not hosting an event of the fair's magnitude in its new convention centre - Asia's largest and the world's second largest - would simply be too embarrassing.

The Guangzhou International Conference and Exhibition Centre has a Phase I construction area of 395,000 sq metres. Fifteen cavernous exhibition halls are complete at the state-of-the-art, Japanese-designed facility.

'It's impossible that the fair will not be held there. That would be a huge waste,' said one senior foreign trade official with the Guangdong provincial government, which technically is on the sidelines of this controversy between a central government ministry and Guangzhou.

But the stalemate has ensured that the spring fair - scheduled for late April - will not be held at the convention centre, despite the fact that Guangzhou rushed to finish the project late last year after just 20 months of construction. To date it has held only one event - an overseas Chinese students' fair that attracted 3,800 people last year.

'It has not been decided when the fair will move. But the spring session will definitely be held at the old site,' said a CECF executive.

The CECF Web site and 2003 promotional materials make no mention of the new conference centre that was expressly built for it. According to the materials, both sessions of this year's fair and scores of other events will be held at the old fairground.

Convention centre executives could not be reached for comment yesterday.

'If CECF doesn't move its business there the new convention centre will be too large for the city,' said one Guangzhou-based diplomat.

'It's a weird situation,' he added. 'Everybody knows [the fair] has to move there eventually. But they're still negotiating and there's been no resolution.'

Even as the convention centre was nearing completion last autumn, CECF was putting the final touches on an expensive new building - the Jinhan Exhibition Centre - at its current home.

CECF is also understood to have invested as much as 20 million yuan in a large-scale refurbishment of its fairgrounds prior to its October 2001 session.

Foreign Trade minister Shi Guangsheng officiated at last autumn's fair. Sources say he did not visit the new convention centre that was then nearing completion on Bazhou - leading to speculation that his visit was intended as a show of strength by Moftec.

CECF officials were so annoyed by the pressure from Guangzhou to relocate that they threatened to move the event - more commonly known as the Guangzhou Trade Fair - to Shenzhen or even Shanghai.

Industry sources also point to the lack of supporting infrastructure for the new convention centre as evidence of Guangzhou's short-sightedness. There are no hotels - or even restaurants - in its vicinity.

'It's easy for a city to build a convention centre. But building a successful conventions business is much harder,' said one industry executive.