Canton Fair concludes amid sagging foreign trade

The 116th Canton Fair, China's largest trade fair, concluded Tuesday in the southern metropolis of Guangzhou with a trade slowdown, the event organizer said.

Total turnover at the fair reached about 179.2 billion yuan (29.2 billion U.S. dollars), down 6.1 percent from the last event in mid-April, according to director of the China Foreign Trade Center, Liu Jianjun.

Exports to China's major trade partners -- including the European Union, the U.S., Japan, the BRICS countries and Middle East countries -- all declined, although there are rising demands from the Republic of Korea and the ASEAN region, Liu said.

The number of participants fell by 1.07 percent compared with the previous fair, with 186,104 representatives from 211 countries and regions having attended the fair, known as a barometer of China's exports.

"Sagging sales mean that we are facing a difficult situation," Liu said.

The previous Canton Fair also reported slumps in both the number of buyers and turnover. Industry insiders say China may miss its estimated foreign trade growth of 7.5 percent, and forecast similar difficulties next year.

Li Wenfeng, deputy head of China Chamber of Commerce for Import and Export of Light Industrial Products and Arts-Crafts, said slowing growth was a "new norm" in China's foreign trade and should be handled as such.

"China has grabbed big shares of most light industrial products in the global market, and there is little room for a big expansion, particularly as domestic labor costs climb," Li said.

China's eastern seaboard is currently facing a labor shortage, with workers demanding higher salaries. Rising labor costs have largely prompted a spike in product prices, putting pressure on overseas buyers.

Frank Lakatos, OEM purchasing director of German company Metabo, said his company was feeling the pinch.

"Labor costs in China are rising far more quickly than those in Germany, and our end-clients are finding it hard to get used to the price hikes," said Lakatos.

Huo Jianguo, dean of the Chinese Academy of International Trade and Economic Cooperation under the Commerce Ministry, said Chinese companies should brave the trade chill by transforming themselves to adapt to the "new norm".

"Domestic companies should focus on improving product quality and efficiency to survive cutthroat competition," Huo said.

Amid slackening transactions, many have accused the Canton Fair of rampant resale of exhibition booths for profit and inaction in facilitating and opening up imports.

"Booths are controlled by the local government, rather than by market trend," said a representative from east China who declined to be named.

Organizers said they had acknowledged the problems, and were trying to make the fair more open and professional.