April 2010 Archives

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The 107th China Import and Export Fair (Canton Fair), one of China’s most significant international trade fairs with representatives from a wide range of industries, opened on April 15th, 2010 in Guangzhou. As indicators for 2010 signify global economic recovery, buyers from different parts of the world gather at the Canton Fair to scope out the wares available for what promises to be a stellar year for international commerce. On opening day alone, the fair hosted 18,487 entrants, a total higher than the year before. This positive trend in participation is an encouraging sign for both organisers and merchants alike.

Attendees noted two interesting trends in this year’s fair:

1. Difficulties in expanding the representation of importers

Organisers enlarged the size of the exhibition area designated for importers as part of an effort to place greater emphasis on import activity. However, only a handful of European and American enterprises chose to exhibit at the fair; there were representatives from the Netherlands and Poland, as well as one from the United States. Strangely, these three foreign participants do not plan to sell to mainland China. The attendee from Holland asserted that European enterprises seldom participate in The Canton Fair because the fair remains largely unknown in Europe and because European enterprises are generally unfamiliar with the Chinese market.

2. Export-dominant companies are shifting focus away from domestic markets

In the depths of the financial crisis, China's exports decreased dramatically. During the 105th Canton Fair, most exporters were trying to develop their domestic businesses. With overseas demand now recovering, these enterprises are once again shifting their focus abroad rather than on domestic sales. According to survey data, 70% of the exhibitors are interested in both local and international sales, lower than the 85% of last year. The ratio is down since a number of export-dominant enterprises have lost their previous interest in domestic sales. Besides the recovery in global demand, two reasons have been stated for this shift. The first is that overseas orders are comparatively simple. International contracts are often straightforward agreements involving a list of specifications and a price, whereas complexity arises with domestic orders in terms of the content of procurement contracts and the arrangement of distribution channels. Second, the quantities of domestic orders are usually much smaller, with the price competitiveness of foreign-trade enterprises often lost on the domestic market.

Although this year’s exporting enterprises expressed their reluctance to expand domestically, the Canton Fair, to encourage consideration for local markets, invited 8,000 domestic large and medium-sized supermarkets to seek procurement partners at the exhibition.

Catch the last days of the fair at the Canton Fair Complex on Pazhou Island in Guangzhou before it closes May 5th.

China has become the world’s largest exporter. Around USD 1.2 trillion in wares left its shores in 2009 for trade around the world. Sure, that is a large number but so what? The 'so what' is that every citizen on the planet, on average, received around USD 200 in new belongings last year courtesy of Chinese manufacturers. Chances are that the fixtures of your everyday life—the upholstery of your furniture, the stitching in your clothing and the electronic components within your appliances—were assembled by Chinese hands.

How much Chinese trade impacts your life largely depends on where you live. A diverse set comprises the nearly 40 nations which exceed the USD 200 per capita average. Those countries whose citizens receive the most from China may surprise you.

Number one on the list, Singapore, may not. The average Singaporean brought in USD 6,674 from China in 2008. Proximity and cultural similarities have made China and Singapore exceptional trade partners.

Then, there is the United States, which runs a perpetual trade deficit with China, prompting complaints about an undervalued yuan and spawning a host of protectionist disputes. However, it is the United Arab Emirates who takes the number two spot. The US is not even in the top ten. China’s exports to the UAE, per capita, equaled USD 4,942; the US, a mere USD 830 (actually putting it in 11th place).

Although heydays of the Silk Road have long since ended, Europeans still manage to acquire a fair share of products from China. The Netherlands is ranked third, receiving USD 2,798 per head from its Far Eastern counterpart, while Belgium, Finland and Denmark rank sixth, seventh and ninth, respectively.

Given its relatively small GDP, trade with China no doubt has the greatest per capita impact on number four: Kyrgyzstan. USD 1,745 for each Kyrgyzstani found its way across China’s western border to this Central Asian nation in 2008.

In Africa, it is not industrialised South Africa which takes in the most Chinese goods and services per head, it is Liberia, at USD 465 (ranked 25th)—just behind Switzerland. Further back is the first South American country, Chile, ranked 31st with USD 367 per capita.

Unfortunately, data for Antarctica is unavailable, but given the broad scope of Chinese export activity, it may be inferred that a few ‘Made in China’ labels can be found there too. After all, even in remote, sparsely populated Greenland each citizen receives USD 25 worth from China.

So, as the world’s predominant exporter, Chinese producers are impacting individuals in every corner of the globe. Look around you and see for yourself.

Top 10 per Capita Recipients of Chinese Exports (USD)

1. Singapore: 6,674
2. United Arab Emirates: 4,942
3. Netherlands: 2,798
4. Kyrgyzstan: 1,745
5. South Korea: 1,521
6. Belgium: 1,393
7. Finland: 1,383
8. Australia: 1,038
9. Denmark: 1,017
10. Japan: 922

Source: China Commerce Yearbook 2009; UN Population Division

The 3rd International Coal and Mining, Machinery, Technology and Equipment Expo, China

Venue: China National Convention Center, Beijing 
Date: 10 - 12 May 2010
Organiser: Beijing Wuzhou Zhuoyue International Exhibition Co. Ltd.; CIEC Exhibition Company Ltd
Tel: +86-10-84966538

As one of the leading international and specialized exhibitions in the field of coal, this event is intended to establish a platform for enterprises at home and abroad to build, maintain and develop relationships. Because of accurate targeting and positioning, the Expo attracts a considerable number of domestic and overseas world-class enterprises such as Siemens, SEW, ABB, Dalian Heavy Industrial, Taiyuan Heavy Industrial etc. as exhibitors. The international fair will display some of the latest industrial information as well as products, technology and equipment. The Expo will feature exhibitors of more than ten countries and regions including America, Germany, France, Britain, Italy, Sweden, Austria, Australia, Poland, Spain among others.

More details.

The 17th China International Stone Processing Machinery, Equipment and Products Exhibition

Venue: New International Expo Center, Shanghai
Date: 6 – 9 April 2010
Organiser: CCPIT Building Materials Sub-council; China Stone Material Association; CIEC Exhibition Company Ltd
Tel: +86 010-88374016

As one of the largest and most specialized annual international exhibitions in the field of China stone materials, this event is intended to provide a platform for enterprises at home and abroad to establish, maintain and develop relationships with clients. The expo aims to assist domestic enterprises with understanding the international stone material market, to expand the domestic and international market as well as display the latest products such as quarry stones, plates, stone carvings, tombstones, machinery, tools etc. This event will feature about 800 Chinese and transnational exhibitors, with an exhibition space of more than 23,000 square meters. The exhibition will cover various areas such as the stone industry, architecture and the building industry, and the design industry.

More details.

The US Trade Representative's office has just released a new report documenting the legal obstacles foreign firms face in their business dealings with China. As might be expected, there were many grievances, although the agency did concede that China has been far more welcoming to internationals than in previous years. Besides its focus on the topics of contemporary spats between China and the US – items such as steel, export subsidies and intellectual property rights (strangely, valuation of the RMB was omitted) – the American agency notably brought forth an issue in which the Chinese government has been particularly rigid: control of the media and telecommunications.

Under the terms of the Protocol of Accession to the WTO, China was obliged to allow non-state owned enterprises, including foreign owned enterprises, to import movies, DVDs, music, books, newspapers and journals. A WTO ruling against China called for a disbandment of this government-enforced monopoly, yet the Chinese government has remained very reluctant to release its control over these forms of media.

According to the report, once within China’s borders there are more hurdles. Movie imports destined for theatrical release are limited to 20 revenue-sharing films per year. The government then closely regulates the foreign film showings to ensure that their viewing time in the theatres does not exceed one-third that of Chinese movies. Then there is the provision that blockbuster films originating from abroad should not compete with those made domestically (think Avatar when Confucius was released). Prefer television? Foreign programmes are not allowed more than 25% of airtime, and are outright banned between seven and ten pm on the basic channels. Even on cable, the percentage is only increased to 30%. And of course, everything is subject to censorship.

Those in the telecommunications industry are equally obstructed. Foreign firms are limited to no more than 49% stakes in joint ventures, although none have been intrepid enough to enter the Chinese market within the last decade, nor have any local companies for that matter. There are only four nation-wide players – China Mobile, China Telecom, China Unicom and DBSat – and it seems that, based on the amount of restrictions on the industry, the Chinese government is content to leave its communication capabilities within the hands of these few domestic firms. Then there is the internet. Google completely evades mention by the US Trade Representative office.

Naturally, the report is not without its quirks. The first page mentions that the import of petroleum and sugar into China is reserved for state-owned enterprises, but that this is indeed consistent with its agreement with the WTO. One is left to ask, why sugar? Then in a later paragraph: “China still maintains high duties on some products that compete with sensitive domestic industries…Raisins face duties of 35%”. (May China anticipate Hillary Clinton’s next condemnation in a speech titled “Steel, Tyres and Raisins?”)

Humor aside, the US Trade Representative report says that despite the countless ways in which China has opened itself to international trade, if anything it has become more restrictive in its control of the media and its telecommunications systems.This may be an issue beyond the influence of trade representatives, American or otherwise.

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