Canton Fair sees strong demand from exporters
Organisers cautious about outlook despite an increase in the number of exhibitors
The number of exhibitors at the mainland's largest trade fair has increased for the second consecutive time this year, but organisers remain cautious about the outlook for international trade.
The autumn session of the Canton Fair, held twice a year, opens today in exhibition halls with a total area of 1.18 million sq metres.
The fair has long been a gauge of the mainland's export performance in the following six to nine months.
The are 24,751 exhibitors at the autumn fair, an increase of 170 from the spring session and the biggest rise in two years.
The number of exhibition booths is up by 514 at 60,222, with 98 per cent showcasing exports.
With the overwhelming demand from exhibitors to promote their products, the fair reduced fees for exhibitors by 1,000 yuan (HK$1,266) to 2,000 yuan per booth to show its support.
Fair spokesman Liu Jianjun said it was following a call from the central government in May to support steady growth in external trade.
The huge demand for exhibition booths at the Canton Fair hints at a better atmosphere than that reflected by the country's latest year-to-date trade figures, which might have been distorted by a surge in fake trade in the first half of last year.
But the organisers of the trade fair remain cautious about the outlook.
Liu said the number of buyers visiting the latest trade fair would be about the same as in the spring session held in April, with transactions also expected to remain stable.
"There is big downward pressure on the [mainland] economy. Threats from Ebola virus and dengue fever may also affect participation of buyers," he said.
Liu said the number of buyers from the European Union would increase, while those from the United States and Japan would be about the same as in the spring session.
The number of buyers from Russia is also expected to increase as the country is affected by Western sanctions. But there would be fewer buyers from the Middle East because of geopolitical instability and pressure on oil prices, Liu said.
Trade data for last month, released on Monday, showed China's exports grew 15.3 per cent year on year. Imports also rebounded, by 7 per cent, after falling 2.4 per cent in August.
Data showing a decline in China's exports early this year was partly attributed to disruption from inflated export figures for the first half of last year as a result of a surge in fake trade.
Exports dropped 6.6 per cent in the first quarter but the trade figures improved in the third quarter.
TRADE MISMATCH FEARS
Hong Kong unexpectedly overtook the United States last month as the top destination for Chinese shipments. Not everyone is convinced those flows were genuine.
Analysts said over-invoicing and over-reporting might explain the 34 per cent surge in exports to the city from a year earlier.
A discrepancy between the city's data for imports from across the border and mainland figures for exports to the city in the past highlighted the practice of over-invoicing that is used to disguise capital inflows to bet on the rising yuan.
The mainland's exports rose 15.3 per cent last month from a year earlier, the biggest increase since February last year and beating the 12 per cent median estimate in a survey of analysts, according to government data released on Monday, prompting deja vu for some.
"Signs of distortion might have re-emerged in the trade data," Xu Gao, the chief economist at Everbright Securities, said in a note. "If policymakers overestimate external demand due to these fake trade figures and reduce the efforts to stabilise growth domestically, the outlook for the economy will be very worrying."
Xu, who formerly worked at the World Bank, pointed out the surge in exports included shipments of precious metals, which have been at the centre of dodgy invoicing in the past. Government policies to support exports "seem to have stimulated fake exports instead", he said.
After almost uninterrupted annual gains since 2005 that saw the yuan rise about 33 per cent against the US dollar, speculators have come to see the yuan as a one-way trade. That prompts hot money to seek out China on currency appreciation bets. Worries about distortions had abated this year after a government crackdown and as the yuan fell 1.4 per cent against the dollar in the first nine months of this year.