Emerging markets become buffer for falling Chinese exports
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Lebanese businessman George E. Hanna could not remember how many times he had visited the Canton Fair, China's largest biannual trade fair. "You will not regret taking 14-hour flights to be here."
Hanna said he spent two or three months, and millions of U.S. dollars every year in China to purchase everything from machinery to textiles, and sell them in Lebanon.
"At least 2,000 Lebanese buyers came to the 106th Canton Fair," he told Xinhua. He planed to hunt more goods in Yiwu City, China's biggest small commodity market.
As the U.S. and European consumers tighten their purse strings in the wake of the financial crisis, emerging markets like the Middle East and South America become a buffer for the Chinese exports, which tumbled to the worst in a decade as financial crisis sapped demands for Chinese goods.
"Because of the financial crisis, our orders from the European Union (EU) in the first six months have been halved from a year earlier level, but business from Russia rose by 20 percent," said Ye Jinwu, president of the Zhejiang Jinlong Electrical Machinery Stock Co.,LTD, who exported 70 percent of its products to the EU in the normal years.
Hao Yi, managing director of the TCL Overseas Holding Ltd, a major television maker in China, said emerging markets showed significant potential as its business in the area surged by 280 percent by the end of September from the year beginning.
"U.S. and European buyers to our booth were 'obviously' less than that in April," he said. Instead, the exhibition hall, as large as two "Bird's Nest", the national stadium that hosted the Beijing Olympics last year, were thronged with purchasers from African countries and the BRIC nations like Brazil, Russia and India.
While the developed economies are busy slashing debt and saving their banking systems, many developing countries notably the oil-dependent Gulf nations, are slightly affected and become a few bright spots amid the global financial crisis.
"Emerging markets had huge potential as they were desperately in need of materials to expand infrastructure," said Ye who eyed an 20 percent increase in the fast-growing area next year.
The made-in-China goods with improved reliability and reasonable prices, are also a perfect choice for the emerging market importers.
Andrey P. Papin, the purchasing and logistic director of the Moscow-based HMS Group, is looking to buy electric motors worth 100,000 U.S. dollars from China."The electric motor prices in Russia are highly monopolistic, and that's why we are here to minimize the costs," he said.
Before the fair opened on Oct. 15, Canton Fair spokesman Chen Chaoren said "greater" efforts had been made by the organizing committee to win more buyers from the Middle East, South America and Central Europe.
Nearly 40,000 of the total 87,700 foreign buyers attending the first phase of the 106th Canton Fair that ended on Monday came from emerging markets, according to data released by the organizers on Oct. 18.
"But to explore the emerging markets did not mean we are pulling away from the developed markets," said Yao Guoshan, vice director of the Commerce Department of Zhejiang Province, the powerhouse of China's export.
"The U.S. and European markets are so big that deserve our consistent efforts, especially after the economy heats up," he said. The emerging markets should be a new growth area.
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