GUANGZHOU, China (Reuters) - With fewer foreign buyers roaming the vast halls of China’s top trade fair on Wednesday, China’s stricken exporters said Western orders remained scarce despite cheaper prices and recent positive signs.
With the global financial crisis and slumping Western demand for China-made goods having damaged China’s once roaring export engine, the 22,000 or so Chinese manufacturers at the Canton Fair are competing fiercely to nail down scarce Western orders amid initial signs of the export slump beginning to slow.
“Now there is more opportunity for buyers,” said Fandi Riad, an Algerian buyer of construction materials who said his Chinese suppliers used to blankly refuse orders of less than five cargo containers, but were now willing to accept just one.
“The sellers are now much more attentive.”
The Canton Fair comes amid some recent signs of an improvement in China’s export figures, which have plunged for the past five straight months. In March exports fell 17.1 percent, versus a much more pronounced 25.7 percent drop in February.
Many Western buyers, however, seemed to be scouting prices and taking more of a wait-and-see approach.
“I think everybody is moving forward cautiously, U.S. retailers are trying to feel where the market is going to go.” said Charles White, a buyer for the U.S. nationwide retailer Harbor Freight Tools which sells hand and power tools.
“We are cautiously optimistic.”
With Chinese manufacturers desperate to firm up orders for the rest of the year, many have been taking advantage of falling material and labor costs to entice buyers.
Michael Gao, a salesperson with the Chaowei Industry factory in Shenzhen which makes electronics gadgets like talking alarm clocks said they’d shaved around 10 percent off the costs of some products in recent months — a necessity given a plunge in orders of some 20-30 percent amid the crisis. Its factory workforce was subsequently cut from 500 last year to the current 200.
“We still have to maintain an optimistic attitude,” said Gao. “We can definitely get back to our previous production levels but I think it will take till next year at least,” he said.
Amin Ali Alherwi from Yemen, who sources white household goods, said prices of China-made washing machines and fridges had fallen around 10 percent since the start of the year, but he was only planning to buy a third of what he did in October.
“We’re not secure now because you never know what tomorrow the price will be ... Instead of making a big order, you make small orders in case the price falls further, it’s risky.”
Before the Canton Fair kicked off, local media reported lower occupancy rates at hotels which are normally packed out and many stall holders said there seemed to be less foreign buyers.
With fair organizers reportedly saying this Canton Fair could be one of “the most difficult” ones in recent years, a series of exceptional measures have been taken.
Top foreign buyers were reportedly flown in for free, while the fair opened its doors to mainland Chinese buyers for the first time, in a bid to give exporters the chance to tap the large domestic market to tide them through the lean times.
Despite the tough climate, some firms see signs of a pickup.
“Each time I visited our logistics department, it wasn’t very busy at all in the first quarter (this year),” said CiCi Chen, a sales manager for Chint Electrics, a Wenzhou-based manufacturer of products such as circuit breakers and solar panels.
“But since the start of April, staff there have been working overtime,” she added.
Editing by Sugita Katyal