Economy

Trying to be fair

Two expos in China tell a new story on trade

Canton-Fair-w

The gathering in Guangzhou

Canton and commerce have been inextricably linked for centuries. However, for the Chinese some of the city’s trading history still rankles. Canton was on the receiving end of gunboat diplomacy in the nineteenth century when the Royal Navy kept opium supplies flowing into China as a way of financing British purchases of tea and silk. Naval victory then forced the ailing Qing Dynasty to grant the Western powers treaty ports in other parts of the country in a “century of humiliation” that the Chinese are determined never to forget.

Indeed, the Chinese government showcased a picture of a British clipper at the opening session of the inaugural Strategic Economic Dialogue with the US in 2006. It was a very clear signal: China was never going to let itself be bullied by Western powers again.

Canton (or Guangzhou as it called today) again found itself caught up in trade tensions this month, at a time when the country’s trade negotiators have complained that the Trump administration is holding a “knife to China’s throat”.

Journalists arrived at the biannual Canton Trade Fair in droves this week to look for clues on the impact of the Sino-US tariff row on the world’s biggest trade fair.

Traditionally a time at which procurement agents and wholesale buyers have struck deals with Chinese vendors, the fair has been seen as a barometer for the export sector. The anecdotal evidence this year is that there is chillier weather ahead. A poll from Reuters found that 65% of the exhibitors surveyed at the gathering were concerned about trade tensions between the two superpowers, for instance, with the news agency describing the tariffs as the unwelcome guest among the 200,000-odd buyers at the fair.

Bloomberg spoke to a mix of exhibitors and attendees too. Miroslav Vana from the Czech Republic had been coming for six years, sourcing kitchen and tableware from about 400 suppliers. But he told the newswire that goods from China have been getting more expensive for a while and that some of his suppliers have moved to neighbouring Vietnam.

Fujian Reida Precision, which makes clocks and timers, expressed its concerns about orders from the US. Sales there currently account for about 30% of its exports, but it said it will have to find new buyers if the tariff war worsens.

In fact, the South China Morning Post spoke to a number of exporters who felt that their bargaining power was being undermined, although Chinese media outlets found some customers who were still interested in doing business, helped by a decline in the renminbi.

A much newer fair is set for media attention next month: the first China International Import Expo (CIIE), which is going to be held in Shanghai from November 5. It has a different focus to the Canton Fair, concentrating more on the opportunities for international firms to find customers in China. President Xi Jinping is expected to attend the six-day event and the Chinese will want to use the expo to make the point that their market is open for business, and naysay those that describe their trade practices as mercantilist.

Newspapers including the China Daily have been promoting the CIIE, noting that Brazil and Germany are two of the 12 nations to be greeted as ‘guests of honour’ among the 130 countries participating. At least 2,800 companies will also be present, it claimed, 170 from Germany.

One delegation that won’t be coming to Shanghai is the US government, which isn’t planning to send any senior officials. Instead a US embassy spokesman called on Beijing to drop what it termed as harmful and unfair trade practices.

The Global Times sidestepped the snub by highlighting that plenty of American companies would be there. “Instead of reducing their dependence on the Chinese market or even giving up on it, many US industrial giants are either speeding up investment in China or reaching out to new potential customers in the country,” it ventured. The newspaper went on to quote the views of those that believe that Trump’s tariffs will prompt more US companies to set up manufacturing bases in China – as Tesla is doing – so as to avoid the duties the Chinese have put up in retribution.


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