Canton Fair Sees Dive in Attendence. Has the Bell Toll For Chinese Exports?

Sunday, November 2, 2008 4:40
Posted in category From the Factory Floor

While working through my own thoughts on the current economic conditions, and reading the opinions/ analysis of others, it is clear that exports are going to be one of the most visible parts of the economy to be impacted.

For many who have been working in the trade industry, the Canton Fair has been something of a gauge.  for years (before Alibaba or Global Sources), it was one of the best ways to identify potential sources, and it was a great place to see if the knockoff someone had created of your product was ready for the export market.

It is a massive operation that seems to expand every year, and while the atmosphere changed from one of supplier meeting buyer to more middle men, the crowds have been on an increasing pace.

Billed as the biggest Canton Fair ever, this season’s event was held in the massive new steel-and-glass exhibition center on the banks of the Pearl River. The sprawling building with a sloping roof takes up enough space for 200 football fields and featured more than 55,600 booths, a 30 percent increase from the last show, organizers said.

Until this year.

While earlier this year, there was a falloff from the inability of many foreign executives to get the Chinese Visas, a recent AP article shows that the threat to the fair this year was economic.. and that the emotional impact on those showing at the fair was deep:

“It is amazing how empty is. It’s frightening,” said Christopher Devereux, a British businessman who has been attending the fair for more than a decade.

“I sat here all morning and didn’t have one customer stop by,” said a toy factory salesman

“I haven’t had any orders so far at this fair. This is all I have,” he said, reaching into a tattered shoe box and grabbing four business cards left by prospective buyers. “All I can do is go back to the factory and give them a follow-up call. It’s going to be hard to survive.”

When writing First China Ripples of Global Financial Crisis Come Ashore – Part 1 – Trade, my primary concern was not that we would see the impacts right away.  Sure, there were going to be industries (like toys) that should have already sailed their holiday goods, and were going to be slow anyway, but I am not starting to believe that this may be going wider.  that rather than look to see the impact after the holiday season, we should be looking much more carefully at trade patterns in non-seasonal to see what the story is on these goods.

For me, the simple logic behind looking at these products is that regardless of what many will have you believe, China’s exposure to exports is much higher than the contribution to GDP suggests.  It is not a clean number, and as I will explore in a further post, my concern is that the impact on trade will go much further than the recent decouplization theorists will have you believe.

Both comments and pings are currently closed.
Tags: ,

8 Responses to “Canton Fair Sees Dive in Attendence. Has the Bell Toll For Chinese Exports?”

  1. China Journal : Best of the China Blogs: November 3 says:

    November 2nd, 2008 at 9:09 pm

    […] of the massive Canton Fair in Guangzhou, attendance at the trade expo is reported to have dropped sharply. [All Roads Lead to […]

  2. Chris Devonshire-Ellis says:

    November 3rd, 2008 at 1:41 am

    I’m not entirely sure if you have the whole picture here Rich. The fair has moved to a brand new, cavernous (1.3million sqm) hall this year, and has also been spread out over three weeks rather than two – both measures to prevent the overcrowding that previous fairs have seen. So physically, there are less people attending than before at any given time, it’s less crowded, and thats a good thing. The numbers of exhibitors was up incidentally on 2007 by 33%. I’m sure there were less buyers this years, but the appearances due to the new extended fair dates and the larger venue will also have an impact. And have you ever seen a satisfied salesman who is not under pressure from his boss to do better?

  3. Rich says:

    November 3rd, 2008 at 2:04 am

    Chris.

    Fair points on the effect an expansion (time and space) may have on the attendance… I think that those variables can explain a bit, but to go from overcrowded to empty is something beyond space and time.

    Another thing to consider as well is that many have already established their relationships, and may not need the fair like they used to. There are so many industry specific fairs now, and many I speak to prefer going to those.

    and one cannot discount the effect of Alibaba or GS as well…

    Either way, we will know better Nov 6 when the “official numbers” are released

    R

  4. Rosario says:

    November 4th, 2008 at 12:27 am

    Its not been empty in fact. We have an office in Guangzhou and the fair, and the hotels have all been busy / full.

  5. Rich says:

    November 4th, 2008 at 1:49 am

    Rosario.

    thanks for the report.

    If so packed then, I am curious as to the reports in AP as well as with some of the suppliers we have been hearing from. Perhaps it is all timing? Maybe the reporters form AP were there on the last days when traffic had fallen off?

    R

  6. Canton Fair attendance dives | Third Party Logistics News - 3PLwire says:

    November 4th, 2008 at 4:10 am

    […] All Roads Lead to China links to an AP article outlining that attendance has dived at this year’s Canton Fair and speculates that China’s exports may contribute a lot more to GDP than most suspect: When writing First China Ripples of Global Financial Crisis Come Ashore – Part 1 – Trade, my primary concern was not that we would see the impacts right away. Sure, there were going to be industries (like toys) that should have already sailed their holiday goods, and were going to be slow anyway, but I am not starting to believe that this may be going wider. that rather than look to see the impact after the holiday season, we should be looking much more carefully at trade patterns in non-seasonal to see what the story is on these goods. […]

  7. Is it Doomsday for the Economic Super-Cycle? says:

    November 5th, 2008 at 4:02 am

    […] second article, from the well-read blog, All Roads Lead to China covered the recent Canton Fair which was more like a Rolling Stones sold out concert than a ghost […]

  8. Rich says:

    November 7th, 2008 at 11:20 am

    China Stakes is reporting in their article Canton Fair Faced a tough 2008, a More Difficult 2009:

    Statistics show that 174,562 overseas buyers attended the fair, and the total trade volume was $31.55 billion, a slump of 9.08% and 17.5%, respectively, from the last Canton Fair

    and

    According to the MoC investigation, 75.7% of companies investigated said the financial storm had reduced their orders, 72.4% said they are most influenced by the shrinking demand on the international market, and 59.2% said the term for orders had been shortened.

    so.. foot traffic was off.. and so are orders.

    I would expect that we will hear louder calls …..Exporters Plead for RMB Depreciation and Tax Incentives