Guangzhou, May 3 (IANS) For Andy Liang, 32, the sharp fall in global crude oil prices has taken a toll on his business. And what he is enduring is also what is playing out at a much larger level at China’s largest trade exposition here — the 119th edition of Canton Fair, on since 1957.
“I hope that oil prices go up and so does my business. This time around business at the fair will not be that great,” Liang, whose company Kebo Electricals sells voltage stabilizers and inverters, told IANS at the fair, which began on April 14 and will end on May 5.
“Our main buyers are from the Middle East and Africa. Not many (buyers) have come so far. Those who have, have placed small orders. Low oil prices have affected their countries’ economies and their power to purchase,” added Liang, who depends on oil-rich countries for exports.
The low global appetite for Chinese goods — a result of world economic downturn and China’s own production glut — has manufactures worried at the fair.
The twice-yearly affair covers 1.18 million sq mts of space to host 60,233 stands set up by as many as 24,512 companies from across the world, the organisers said of the event, dubbed as China’s bellwether for boosting exports.
The Chinese economic growth slowed to a 25-year-low of 6.9 percent in 2015. The fall in the crude oil prices has triggered concerns among economists, who say the country’s lower demand for oil is one of the reasons for plummeting oil prices that tanked to a 12-year low of $27 a barrel in January.
The fair is also being held against the backdrop of a fall in foreign capital inflows to China — fDi magazine, think tank of Financial Times, says India is now the top-ranked nation in the flow of foreign direct investment in 2015, beating China on the very turf it dominated for a few decades.
The trade fair offers myriad products that range from home appliances to bicycles and skin care products to bottle openers. Your made-in-China shoes or light bulb could have been sourced from here and sold to you in your neighbourhood market.
Kevin Feng, employed at a bicycle-making firm, is not very optimistic about the sales this time. “Sales may not be great this time, but responses have not been that bad either,” said Feng, whose Glory Business mainly exports bicycles to Eastern European countries.
Hebe Chen, salesperson at the stall of Guangdong Senhat Sporting Goods, also says the response so far has been tepid. She mistakes this correspondent for an Asian businessman and offers a visit to her company’s’nearby manufacturing unit of ice skates, skate boards and inline skates.
Guangzhou, the capital of South China’s Guangdong province, is located on the Pearl River. The bustling city accounts for two percent of China’s land and contributes 12 percent of its GDP.
The deputy director general of Guangdong’s foreign affairs, Luo Jun, told IANS that he was quite hopeful exhibitors will not return disappointed from the fair. He has a ray of hope as well. Even though the slowdown has the sellers worried, some buyers said it has been in their favour.
“This time we can bargain with them as the demand for their products is less,” said a businessman from Pakistan. “Earlier, they wouldn’t even talk to us properly.”
(Gaurav Sharma is IANS correspondent based in Beijing. He can be contacted at [email protected])