Fair prices come down to business

One of the more pleasant places to spend a weekend morning in Guangzhou is a small, carpeted nook on the lobby floor of the White Swan hotel.

Comfortable sofas, views of the Pearl River, an indoor waterfall and the chirping of caged birds provide an inviting atmosphere.

But last Saturday, one diner's otherwise pleasant breakfast experience was spoiled at the end, as he choked on a 200-yuan (about HK$186) bill - about twice the normal charge. Surely there was some mistake?

'Surely not,' an unimpressed waitress told her ignorant customer.

Blame the 89th session of the biannual Chinese Export Commodities Fair (CECF), which opened on April 15 and concludes this Thursday.

Held each spring and autumn since 1957, the CECF remains the biggest event on China's commercial calendar. At last year's autumn session a new attendance record was set, with more than 10,000 buyers making the trek to the fair's hallowed halls. About the same number is expected at the current session.

It is the only time of year when Guangzhou's hotels - the good, the mediocre and the miserable alike - are booked solid. They take full advantage by more than doubling their room rates and even their breakfast-buffet charges. Nor are hotel managers the only ones rubbing their hands in glee. For taxi drivers and prostitutes too, business is never better than during a fortnightly session of the CECF.

Walk into any Guangzhou hotel lobby in the early evening when the fair is open for business and you will think you have stumbled onto a full session of the United Nations General Assembly.

There are traders from Africa and the Middle East - some dressed in robes and holding a copy of the Koran - and overweight white guys from everywhere else. The number of languages spoken rivals that heard on the Tower of Babel's ill-fated construction site.

The CECF is a real fair for real businessmen. They haggle over prices and talk about nuts-and-bolts issues such as import duties, profit margins and shipping schedules.

There are more than 28 product categories on display in the CECF's 20-odd exhibition halls, each of which has three to six floors. These include everything from animal by-products to jade carvings to building materials and hardware. Viewed as a whole, the fair is a monument to the incredible range and productive power of China's export machine. This year that machine badly needs the CECF's marketing muscle. Last year, orders booked at the fair's spring and autumn sessions accounted for more than 10 per cent of China's total annual exports.

In the first quarter of this year, exports increased a better-than-expected 14.7 per cent to US$59.3 billion, compared to 27.8 per cent growth for all of last year. Yet in perhaps an ominous sign of things to come for the country, export powerhouse Guangdong province saw its first-quarter exports grow just 0.9 per cent to US$20.1 billion.

To help China make up for the slower growth in export revenue, Guangzhou hotels might well be tempted to jack up their breakfast-buffet charges by another 100 yuan at the CECF's autumn session. Ten thousand traders paying 300 yuan per breakfast over a 14-day period would bring in a cool 42 million yuan.

While that would be even harder for Guangzhou's longer-term residents to swallow, consider it food for thought.