Export outlook bleak as 110th Canton Fair prepares to open

GUANGZHOU - The outlook for Chinese exports in the months ahead is not optimistic, despite a strong willingness from global purchasers participating in the Canton Fair, said the Ministry of Commerce on Thursday.

Liu Jianjun, deputy director-general of the China Foreign Trade Center affiliated to the ministry, told a news briefing at the 110th China Import and Export Fair - also known as the Canton Fair - that factors including currency appreciation, the continuously rising cost of labor and the global debt crisis, will heap pressure on the nation's producers and hurt exports for the rest of the year.

The 110th Canton Fair, which opens on Friday, comes as the European sovereign debt crisis is growing and trade tensions with the United States, centered on the Chinese currency, are increasing.

On Thursday, the General Administration of Customs announced that China's exports grew by 17.1 percent in September from a year earlier, the lowest level of growth since February. Meanwhile, the nation's trade surplus fell to $14.51 billion, the lowest since May, as a result of a slowdown in export growth.

"China's foreign trade will have to face severe challenges because the European debt crisis is worsening, the US is troubled by high unemployment rates and there is excessive asset liquidity worldwide," said Liu at the briefing.

However, as applications for participation indicated, global purchasers and sellers are enthusiastic about exchanging information and doing business in the nation's largest trade fair.

The event will boast 57,836 booths prepared for Chinese exporters, 10 more than the last time it was held, and 23,702 export-oriented enterprises will be in attendance to display their goods.

"More than 31,000 Chinese makers and exporters applied for about 96,000 exhibition booths, but unfortunately, we cannot accommodate them all," said Liu, who is also a spokesperson for the fair.

By the end of September, the number of global purchasers looking for information about the fair had surged by 50 percent from the previous event, and 280,000 global buyers applied to enter.

There has been a slight growth in applications from developed regions including the US and EU, but applications from emerging markets including Russia, Brazil, India, South Africa and the Middle East have surged.

The fair has been held in the spring and autumn seasons every year since 1957, and has been a barometer of China's foreign trade. However, Liu said he is cautious about exports in the following months, despite global buyers showing strong interest in attending the fair.

The General Administration of Customs said on Tuesday the yuan's appreciation has weakened the competitiveness of exporters.

Serious developmental problems, high rates of unemployment and sliding consumer confidence in the EU, US and Japan, coupled with slowing growth in emerging economies will present severe challenges, the statement said.

Earlier this week, the US Senate passed legislation that would allow the US to seek duties on Chinese exporters as compensation for "misaligned" currencies. "Such a move is not in line with World Trade Organization rules, and will hurt both China and the US itself," said Liu.

The exhibition area for imports is 20,000 square meters, and 529 companies from 49 nations and regions are expected to participate in the fair. "We will try to expand the coverage for imports in coming fairs as a growing number of overseas companies have been seeking to attend in the past few years," said Liu.

China has pledged to promote imports over the next five years to balance trade and to help transform the nation's economic development mode.