The 136th China Import and Export Fair, also known as the Canton Fair, kicked off in Guangzhou on October 15th, attracting 250,000 overseas buyers from 203 countries. While the atmosphere was lively, some exhibitors pointed out inconsistent visitor turnout and a lack of attendees from developed countries. Analysts noted a shift in the customer composition at the fair compared to previous years, coupled with lower-than-expected exports and a persistently low Purchasing Managers’ Index (PMI) in the manufacturing sector, indicating a continued downturn in the Chinese economy.
The Canton Fair, known as the “Barometer of China’s Foreign Trade,” is held in the spring and autumn seasons. This edition runs from October 15th to November 4th, divided into three phases.
According to official reports, this edition of the fair features a total of 74,000 booths, with 55 exhibition zones and 171 specialized sections. Over 30,000 companies participated in the offline exhibition, including approximately 29,400 export-oriented firms, an increase of nearly 800 from the previous year, and around 4,600 new exhibitors. The industrial robotics, smart manufacturing production lines, and other specialized zones accounted for nearly 400 companies and over 1,500 booths.
For the first time, the Canton Fair has introduced hydrogen energy as a new theme in the new energy section, along with a dedicated energy storage products zone.
Official data indicates that this year’s fair attracted nearly 250,000 overseas buyers from over 200 countries, a historic high. However, traditional major buyers from Europe and the United States accounted for only 12.5%, while buyers from countries along the Belt and Road Initiative route represented 75.7%, BRICS countries 20%, and Middle Eastern countries 13.4%.
Similar shifts in buyer composition were observed at last year’s fair. A year ago during the autumn session, analysis showed a decrease in European and American buyers, with a significant increase in attendees from Belt and Road countries, comprising 64% of all buyers. This trend has intensified this year.
On the opening night of the fair, a exhibitor from Shenzhen, known as “@BOSSTan.ForeignTradeSHOW,” shared a video on social media, noting a lack of American and European visitors at their booth, with predominantly Russian, Indian, and Middle Eastern attendees present.
The exhibitor mentioned that this year’s buyers were predominantly from developing countries, making it challenging for exhibitors like them who focus on premium, high-priced products. They also pointed out the popularity of the energy storage products zone compared to other sections.
Due to overcapacity in China, particularly among manufacturers with lower technological capabilities, a price war has emerged, leading to a downward spiral in product prices and financial difficulties for many factories.
Prior to the fair’s opening, China’s General Administration of Customs reported a modest 2.4% year-on-year increase in exports in September, significantly lower than the 8.7% growth in August and marking a new low since April. Import growth also slowed, rising by only 0.3% year-on-year in September, below economist projections.
On October 4th, the European Commission approved a proposal to impose tariffs of up to 45% on Chinese-produced electric vehicles. This move aligns the EU with the United States and Canada in implementing stricter trade measures against Beijing, potentially further impacting Chinese exports.
Professor Xie Tian from the University of South Carolina’s Darla Moore School of Business highlighted that China originally became the world’s factory to penetrate Western markets and earn hard currency in the form of US dollars. However, with a decline in quality and a shift to Russian and African markets, China faces uncertainties in its customer base. This transition poses risks, especially if geopolitical factors change, potentially affecting trade dynamics.
Taiwanese economic expert Huang Shicong emphasized the notable shift in recent years at the Canton Fair, with fewer orders from Europe and the United States, and an increased presence of buyers from Africa and countries along the Belt and Road Initiative. This transformation may negatively impact China, as exports to Western markets yield higher prices compared to those in the Belt and Road or ASEAN regions, posing challenges to China’s overall trade figures.
China’s September PMI stood at 49.8%, remaining below the threshold of 50 for the fifth consecutive month. The National Bureau of Statistics of China reported on October 13th that the Producer Price Index (PPI) declined by 2.8% year-on-year in September, the largest drop in six months, with a monthly decrease of 0.6%, hitting the lowest point since April 2024. A PMI below 50 indicates a contraction in the manufacturing sector.
Additionally, China’s Consumer Price Index (CPI) rose by 0.4% year-on-year in September, below Reuters’ forecast of 0.6%, with a 0.2% monthly decline. Excluding food and energy, the core CPI grew by 0.1% year-on-year, marking a new low since March 2021.
Investment, consumption, and exports are known as the three drivers of China’s economy. Currently, with weak consumer demand, increased deflationary pressures, declining exports, and a bleak outlook, China’s economic growth faces challenges.
PMI figures serve as leading indicators, reflecting buyers’ outlook on the future. China’s PMI has lingered below 50 for an extended period, signaling a pessimistic outlook. Industry procurement trends indicate a contraction, underscoring the ongoing economic challenges.
Recent economic policies introduced by the Chinese government aim to stimulate the economy, focusing on domestic demand and the real estate market, as external trade struggles. However, the real estate sector presents a persistent challenge that cannot be quickly resolved. With a significant drop in export momentum and a weak real estate market, China’s economic growth is severely impacted.
The downward trend in China’s PMI reflects an industrial shift away from China, signaling factory closures and reduced economic activities. Amidst subdued domestic demand and a real estate crisis, deepening stock market concerns indicate a lack of any forthcoming economic turnaround.
Exports have traditionally been one of China’s economic pillars. However, if export targets, such as those for electric vehicles to Europe and the United States, are not met, the economy will not receive the anticipated boost.
Huang Shicong reiterated that the declining trend in China’s PMI, indicative of industry sentiment and economic activity expectations, alongside tightening procurement trends, discourages any immediate economic rebound. As a key indicator of industrial development, the persistent contraction underscores the lack of positive prospects for China’s economy.
Overall, the Canton Fair, once a key platform for Chinese exports, now reflects shifting global trade dynamics with implications for China’s economic trajectory.