Can trade rebound sustain?

Hours after the Canton Fair opened on Monday morning, Ying Wenjun remained sitting idly in his booth, waiting for inquiries from potential clients.

Ying is the owner of Shanghai Junda Auto Decoration Co., Ltd., a privately owned business which Ying claims is the country's largest in manufacturing auto decoration accessories such as seat cushions.

"There are so few visitors to our booth," Ying complained. "I've attended the fair so many times over the years, and I've rarely seen a situation like this. It's much worse than in the spring session."

Chinese export-oriented manufacturers like Shanghai Junda are feeling the pinch brought by fading foreign demand amid a sluggish global economy.

China's foreign trade in the first three quarters of this year rose a mere 6.2 percent to 2.84 trillion dollars, in great contrast with the 20.3-percent growth registered for 2011, according to figures released by the General Administration of Customs on Saturday.

Exports in September unexpectedly surged 9.9 percent from a year ago to a record monthly high of 186.35 billion U.S. dollars, as against a year-on-year gain of 2.7 percent in August.

Imports in September also rose 2.4 percent year on year after consecutive falls over the previous three months.

Economic experts, however, are cautiously optimistic about the trade rebound in September, among mixed feeling.

Liu Jianjun, spokesman for the Canton Fair, said the bounce was mainly due to the huge amount of overseas orders ahead of the Christmas shopping season, and future trade would continue to sag.

"The foreign trade situation over the next few months will remain grim as the global economy is still in a downturn," Liu said.

Others, however, contend that the momentum will sustain for a while thanks to a slew of preferential policies from the central government to boost trade.

China rolled out regulations in September to help firms reduce transaction costs and improve efficiency.

Also, the government announced recently that it will allocate 2.5 billion yuan (394.9 million U.S. dollars) from the central budget to offer loan interest discounts to importers of certain types of products this year.

All these efforts will further shore up a foreign trade rebound in the last quarter this year, predicted Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation.

Huo, however, pointed out that the fundamental causes that hinder China's foreign trade growth, such as withering overseas demand and increasing trade protectionism, would not change overnight.

"Thus, China needs to rely on transforming its pattern of economic development and the upgrading of foreign trade to get it out of this predicament," according to Huo.

"Under such circumstances, export-oriented Chinese enterprises will have to adjust structures and change their development modes to boost their productivity and competitiveness," Liu, the spokesman, added.

Enterprises seem to have a more bleak outlook toward the future trade situation.

Eric Liu, sales manager for Zhejiang-based lawn mower maker Changjiang Machinery Co., Ltd., said the current difficulties may last five more years.

Liu said rising labor costs, a volatile currency and higher commodity prices added to Changjiang Machinery's export woes.

"Years ago, the U.S. dollar fell against the yuan, forcing us to shift to the Euro. Then the Euro fell again, further squeezing our profit margin," Liu said. "And as a lawn mower producer that consumes a huge quantity of iron and steel, a rise in the prices of raw materials has also eaten into our margin."

Ying said the current trade difficulties have forced many smaller enterprises with low competitiveness to close.

Meanwhile, export-oriented enterprises are seeking ways to diversify their business patterns.

Ying said he would consider tapping the domestic market or setting up overseas businesses if the current sluggish trade situation continues.