Western buyers surge at China trade fair as export deals grow modestly

European and American attendees flocked to China’s biggest trade fair this autumn, marking a significant 38.2 percent and 22.2 percent increase compared to the previous event in April, according to event organizers. The surge in visitors was primarily attributed to eased trade tensions following President Xi Jinping’s visit to the US in September.

However, despite the rise in the number of buyers, the value of export deals announced at the Canton Fair only grew by 4.1 percent, amounting to US$26.75 billion. This figure still fell short by 8.7 percent compared to the value of deals from autumn 2019, the last trade expo held before the Covid-19 pandemic.

Chinese exhibitors at the Guangzhou fair attributed the modest growth in anticipated deals to economic challenges in Europe and foreign exchange volatility. Yulia Yuan, a furniture exporter targeting European markets, anticipated a challenging year ahead as European inflation fueled household budget strains and dampened demand for high-margin products.

Yuan noted that customers would prioritize affordable, basic products over high-end offerings. European economic growth slowed to 0.4 percent in the third quarter, down from 0.6 percent in the previous quarter, while annual inflation reached 3.8 percent in September.

Lighting exporter Tan Jian cited a stronger yuan as a factor squeezing exporters' margins. Recent yuan appreciation meant exporters paid more in euros or US dollars, eroding their profits upon conversion to Chinese currency. Raw material costs had surged by around 15 percent compared to the previous year, but European customers were only willing to accept price hikes of 3 to 5 percent, leaving exporters with limited room to negotiate.

Tan Jian stated that traditional models based on low prices and high volumes would no longer suffice, as exporters grappled with the need to rethink their business strategies.