Mother of mainland's trade fairs shows no signs of losing its lustre

The Cultural Revolution stopped the nation in its tracks but business went on as usual at the Chinese Export Commodities Fair, better known as the Canton Fair, during the tumultuous years between 1966 and 1976.

For decades, as the only window for trade with the world and a major venue to obtain hard currency, the fair outgrew itself repeatedly, despite the 2003 Sars scare, e-business and its own diminishing role.

Organisers expect a record 300,000 visitors for its 100th consecutive session starting on October 15 and long queues for booths point to the pent up demand for show space.

Experts agree the fair remains relevant and irreplaceable but say big is not necessarily better.

He Yuangui, an international trade expert at the Guangdong University of Foreign Studies, has urged the event's organisers to be more specialised, to improve services and technical standards and to give market forces more play.

'It's become too big and crowded. Very soon the number of buyers will break the 200,000 mark. When it's this big, it's hard to raise efficiency and to negotiate business,' Professor He said.

'We need to break it up and hold smaller fairs. Do we keep on building exhibition halls? We have moved from Haizhu to Liuhua to Pazhou. Do we expand all the way to Nansha?'

Specialised fairs have emerged for furniture, cosmetics, lighting and building materials and ride on the success of the long-standing event, but they are not organised by the Canton Fair, one of only three backed by the Commerce Ministry.

Hong Kong Exhibition and Convention Industry Association chairman Stanley Chu agreed that greater specialisation was possible but cautioned against holding too many mini-fairs.

'There are too many mini-fairs which make it very confusing. The government should control [them] and concentrate on the Canton Fair,' he said.

Zhou Zhaosen, Jardine Matheson's chief representative in south China, said the role of the bi-annual fair had diminished as China had opened up.

'In the past, you had to go the Canton Fair to buy anything. We still go now to see new products and to look for manufacturers, and then we go direct to the factories to place orders,' Mr Zhou said. Up until the 1990s, when more export and import licenses were issued, all business had to be carried out through state-controlled monopolies and buyers had to secure invitations to attend the Canton Fair.

Mr Zhou's former colleague Stephen Ching remembers the company receiving a rare invitation to visit a tea plantation in Yingde where they could source the commodity direct for their client, Twinings.

Mr Zhou said: 'Its role is very different now. It has become a showcase for new products, a showcase for new manufacturers and a platform to learn about developments in the market but not for doing actual business.'

The fair, he said, was more significant for new buyers who needed to know what China had to offer than for companies with a long-established presence on the mainland.

For some quota products, such as construction materials and agricultural produce, the fair is inexplicably still the only place for their makers to do business.

The Canton Fair has also lasted because of the way mainlanders conduct business. Unlike Taiwan's salesmen, mainlanders do not travel the world with suitcases filled with their products - they go to the Canton Fair to set up their booths and buyers from around the world come to them, Mr Zhou said.

For buyers, it saves time to be able to see 100 suppliers under one roof and compare quality without having to drag their suitcases around the 29 provinces.

The allure of the fair has spawned a waiting list for exhibition booths that has led to a black market for show space. A small and medium-sized enterprises fair has also had to be launched to accommodate companies unable to get into the main event.

Demand for space is expected to rise as export growth remains strong at more than 30 per cent on average in the past five years.

Professor He urges a cap on growth and suggests quarterly, specialised fairs be held instead.

Mr Chu thinks the Canton Fair can also consider showcasing more imported products, given that China wants to promote imports to improve the balance of trade.

Also pulling back the Canton Fair's growth is the lack of supporting facilities such as hotel rooms, convention rooms, vegetarian restaurants and prayer rooms in the exhibition area for the increasing number of Muslim buyers.

'In the past, people have focused on commercial returns on their investments. They say, 'Let's make more exhibition space'. There is a long queue for space so they feel the priority should go to people waiting for space. Now priorities are changing. There is competition coming,' Mr Chu said.

By way of comparison, the Hong Kong Convention and Exhibition Centre uses three-quarters of its space to support the exhibition area, which accounts for just one-quarter of the total, he said.

From a small market fair attracting 1,233 traders buying and selling pigs, cotton and other local produce valued at US$17.54 million, the fair has grown to be the world's third biggest trade show drawing nearly 200,000 buyers placing orders for manufactured goods worth some US$30 billion.

In April 2008, phase three of the fair's new convention and exhibition centre in Pazhou will open, putting 330,000 square metres of show space under one roof and providing some much-needed convention and banqueting facilities.