Fewer deals and visitors flag grim year for exports
Organisers blame it on the global outlook, the higher cost of products and the islands dispute
The biggest trade fair on the mainland ended with disappointing results yesterday.
There was a significant drop in the number of international buyers and deals done, painting a grim picture for exports in the coming year.
The deals after the three-week Canton Fair, a barometer of the health of exports, came to US$32.7 billion, the lowest since 2010, and down 9.3 per cent from the previous session in April, official statistics show.
The number of international buyers was down by 10.26 per cent. China-Japan agreements fell 36.6 per cent, due mainly to the lingering territorial dispute between the two countries over uninhabited islands in the East China Sea, according to fair spokesman Liu Jianjun.
Only about 5,000 buyers from Japan attended the fair this autumn, a 19.2 per cent decline from the one in April, and 29.6 per cent fewer compared with the session a year ago.
"This is a result that we don't want to see. The diplomatic row has dealt a huge blow to the trade between the two countries," Liu said.
He also blamed stagnant global demand and rising labour costs on the mainland for the grim results. Deals signed with the European Union and the United States fell 10.5 and 9.4 per cent respectively.
"The drops in both trade volumes and number of buyers show that the global economy still has not fully recovered, and the export outlook for China is set to remain gloomy for the coming months," Liu said.
He also noted that 86.6 per cent of the overseas orders were on short-term contracts, adding to the uncertain trade prospects for next year.
While orders for food and medicine increased substantially, demand for leather products and wooden toys dropped by about 40 per cent, the statistics showed.
Fan Hanxin, from Guangdong Yongjinxing (Group), a leather manufacturer in Chaozhou, said rising labour costs had driven up product prices by 10 per cent this year.
As a result, the company received 20 per cent fewer orders.
Liu said the rising labour costs on the mainland had forced some companies that used labour-intensive processes to move to countries in Southeast Asia.
Statistics from the Guangdong provincial department of foreign trade show that 41 manufacturers of clothes and shoes have moved to other countries including Malaysia and Vietnam.
However, the latest Chinese trade data painted a slightly different picture.
Those numbers showed exports jumping 9.9 per cent in September compared with the previous year after a year-on-year gain of just 2.7 per cent in August.
This has prompted some to question whether the Canton Fair's economic relevance has waned in its 56th year.