The semi-annual Canton Fair started its Fall session last week, and all indications are that business volumes are not dropping, so far. Exhibitor numbers and floorspace covered are up. Although it is too early to release visitor numbers, feedback from attendees, as reported by local media, is generally cautious but optimistic, with particular focus on trade with countries along the Belt and Road Initiative.
Discussion of the US-China trade war was mostly avoided, although officials cast an optimistic tone. Xu Bing, spokesman for the fair, told local reporters that it was expected that US purchasers will “remain stable”.
Xu pointed to recent news suggesting that US-China trade negotiations were making progress, which, he said, will raise the expectations of foreign buyers. “We expect US buyers to remain stable and still be one of the top three foreign buyers in the Canton Fair,” he said.
Around 25,000 exhibitors set up displays on the opening day last week (the fair runs for three weeks). There were 60,676 booths covering more than 1.19 million sq ft. All these numbers were slightly up on the Spring session, organizers said.
One local media report looking at household appliances – the traditional backbone of the Canton Fair – found that although the EU is still their largest market, many local exporters are cautious about the outlook, preferring to look for growth opportunities in Africa.
An executive from Foshan-based Galanz, the world’s biggest maker of microwave ovens, said exports to Africa had grown 49% YoY in the first six months of this year. Currently, the European and American markets account for about 60% of the company’s market share, he said, but BRI countries were now nearly a third of the total.
Zhejiang-based Star Group, which is diversifying from home appliances into optoelectronics and wind power products, still sees room to grow in Europe and the US, but the current tariff situation has clearly put a damper on demand. However, orders were picking up in Asia, especially in Southeast Asia.
Hisense, one of the world’s largest makers of consumer electronics, exporting to more than 130 countries and regions, is similarly upbeat about BRI countries. An executive said sales in the Czech Republic and Russian markets had risen 50.4% and 45.6%, respectively, in the year to September 30. Indonesia, however, had been its biggest success, as sales had soared 279.4% in the year to date.
The king of air-conditioners, Zhuhai-based Gree Electric, agreed that BRI countries were the future of growth in the sector. A senior executive said it had helped that the government had been investing in these countries’ infrastructure, as the payoff was now coming for companies that invested in growing and diversifying their supply chains. Southeast Asia had been a particularly good growth point for Gree.
Lexy Electric, one of the world’s leading manufacturers of environmentally friendly cleaning products, said its focus was on setting up new factories in Vietnam and Thailand while improving other overseas production bases, to circumvent tariff barriers.
Another local media report focused on the importers section of the fair, where a total of 367 enterprises from 21 countries and regions along the BRI participated, accounting for about 60% of the total. Here, too, all the talk was about the potential of Southeast Asia and Africa.
It wasn’t only in traditional industries that exporters were upbeat. As one local media reported, robotics firms were reporting booming orders. Guangdong Baole Robot Co., a Shenzhen-based manufacturer of robots used home appliances, commercial cleaning and industrial cleaning, says the company has maintained a 60% growth in sales so far this year. New markets in South America and Asia have been the most promising.
Not all were so upbeat, however. Liang Yueyi, deputy manager of the import and export department of Foshan Lighting Co. Ltd., known as the “Chinese Lamp King”, said that the company’s exports are heavily dependent on the North American market, which had been heavily affected by US-China “trade friction”.