Canton Fair receives less orders, sign of trouble ahead

Special
Report: Global Financial Crisis

GUANGZHOU, May 7 (Xinhua) -- China's leading trade
fair, known as Canton Fair, ended Thursday with export orders down almost 17
percent, a sign of troubles ahead for China's exporters amid the financial
crisis, organizers said.

The export agreements for more than 20,000 Chinese
companies reached 26 billion U.S. dollars at the 105th China Import and Export
from April 15 to May 7, down 16.9 percent compared to the previous fair last
October, said the fair's organizers.

"Statistics show that China's export will continue to
decline in the next two quarters," said Wen Zhongliang, director of the Business
Office of the fair and deputy director of the Department of Foreign Trade,
Ministry of Commerce.

"It may get better in the fourth quarter," Wen said.

The Canton Fair, with a history of 52 years, opened
with the world's close attention amid the global downturn as a barometer for
China's import and export situation.

Fair sales showed that China's economic situation is
still grim despite of the "positive signs", Wen said.

"The financial crisis had hit the real economy and
its impact on consumer demands still continues," Wen said.

Mechanical and electrical product deals, which
account for half of China's exports in money terms, reached 11.3 billion U.S.
dollars, down 19.5 percent. Textile deals was 1.6 billion dollars, down 15
percent, and the daily commodities down 2.4 percent.

The "positive changes" in textile industry in March
was a temporary and partial change, which should not lead to over-optimism for
the industry, said Wang Yu, vice president of China Chamber of Commerce for
Import and Export of Textiles.

"The orders are still decreasing, which is a great
challenge for China's 40,000 textile companies," Wang told Xinhua.

More than 165,000 oversea buyers attended the fair,
down 5.1 percent from the previous fair.

"Many old customers decreased or even canceled their
purchasing plan this time," said Du Yanhua, manager of Shanghai Flying Horse
Import and Export Group Ltd..

Many Chinese companies said their export agreements
are becoming "shorter" and "smaller". "My company's export to a Spanish company
was reduced to 200,000 from one million dollars and the delivery time was
shortened to two months from three months," said a sales manger of Aux Group
Company Ltd..

Although Europe and America are still the major
markets for China, the deals are down 28 percent and eight percent respectively
compared to the previous fair while agreements increased in new markets, said Mu
Xinhai, fair spokesman.

China's exports to Argentina, India and the
Association of Southeast Asian Nations rose 10, six and seven percent
respectively, Mu said.

"Chinese companies are trying to explore new markets
while old ones are shrinking," Mu said.

More companies also turned to the domestic market.
Two domestic trade sub-fairs were held during the Canton Fair. Deals volume
exceeded 460 million yuan (about 67.6 million yuan) at one of the fairs, Mu
said.

Confidence could be seen at the fair amid the
downturn. Some companies said the most severe time had ended.

"Our business has become more stable compared to last
November and December, which gives us more confidence to counter the crisis,"
said Cao Xiaojian, general manager of Jiangsu Sainty International Group
Cooperation Ltd..

Companies which survived the crisis had improved
themselves and reinforced their competitiveness, Wen Zhongliang said.

"With the recovery of the world's economy, Chinese
companies have the confidence to be more competitive in the international
market," Wen said.

Dairy scandal casts lasting shadow
over China's food exports

GUANGZHOU, May 7 (Xinhua) -- Visitors were scarce at the Guangdong Dongtai Dairy Products booth during the third phase of the 105th China Import and Export Fair, also called the Canton Fair.

The third phase of China's largest trade event began
here Sunday and ended Thursday. Full story