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Canton Fair Indicated Further Improvement in the Quality and Outcomes of Innovation-driven Foreign Trade Growth

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At the concluding press conference of the 123rd session of the Canton Fair, Xu Bing, Spokesperson of the Canton Fair and Deputy Director General of China Foreign Trade Centre, introduced that by 3rd May, buyer attendance from all continents and export transaction both increased over the same period of last year. The buyer attendance hit a new record high in the past 5 years, rising by 5.3% and the export transaction witnessed an increase of 3.1% over the 121st session. The number of source countries and regions also went up from 213 to 214.

Xu said that Canton Fair is the barometer and wind vane of China’s foreign trade. The buyer attendance and export transaction data of the 123rd session showed that the momentum of steady foreign trade growth has been consolidated, the quality and outcomes of growth has been improved and transformation of growth source has been accelerated.

Innovation drives quality development. At this Canton Fair, enterprises focused on the supply side and transformed from being factor-driven to innovation-driven. The session witnessed significant increase in products of self-owned intellectual rights and brands, high technological content, green and low carbon as well as steady improvements in their added value and brand influence. Survey showed that 97.7% of enterprises in some industries indicated stable or growing R&D investment over the same period last year. The transaction volume in brand zone (20% of the total booths) reached 10.7 billion US dollars, above the average level and accounting for 33.5% of the total. Innovation has become the passport for Chinese enterprises to enter the global market and quality development is widely recognized among all enterprises.

The new foreign trade competitive edge with technology, brand, quality, service and standard as the core is rapidly forming. Driven by our national innovation-driven strategy, the majority of companies have achieved remarkable results in transformation and upgrading, significantly improved international competitiveness, and become more equipped and capable to deal with challenges posed by trade friction. The industrial chain is more mature and complete. An increasing number of domestic enterprises provide most of the world's supply with a mature and complete industrial chain, playing a prominent role in bolstering foreign trade. The market is more diverse. While consolidating traditional markets such as the Europe and U.S., the majority of exhibiting companies take broad business opportunities of the “Belt and Road” initiative and actively explore markets along the route and emerging markets. Survey showed that at this session, buyers from emerging markets such as countries along the “Belt and Road” route demonstrated above average intention to place orders. The products are of better quality. The stage of Canton Fair featured a new shift in China’s foreign trade situation from “value on quantity” to “value on quality” and global consumers were in greater rigid demand for Chinese products. Although some high-quality products such as laser processing equipment exhibited at this session of Canton Fair were included in the U.S. tariff list, American buyers were not discouraged but rather under greater pressure to increase the order before the implementation of the list. The Chinese brands are more recognized. Gree's self-owned brand products have been exported to more than 160 countries and regions, with over 300 million users. Haier's Internet of Things (IoT) commercial washing machine brand has maintained its position as the market leader even in Japan, the traditional powerhouse in electronic household appliance. The business model is more novel. Some exhibitors stated that the foreign trade model based on product sales only had become outdated and the new model combining professionalism and service is gaining favor of the international market. Many exhibitors have created smart and convenient new service models by means of Internet and big data technologies.

The momentum of steady foreign trade growth has been maintained. According to exhibitors, compared to last year, buyer attendance of this session increased and the intention of placing orders on site also boosted, especially for buyers from emerging markets along the “Belt and Road” route. In regards to market, the transaction volume of B&R countries and the EU increased by 8.8% and 5.8% respectively. In regards to sector, building materials, electronics & information products, and glassware enjoyed 46.6%, 38.2%, and 35.9% growth respectively. Meanwhile, related survey showed that 82.5% of companies in the machinery and electronic industry were expected to enjoy increased amount of export, or same level as before in the second quarter of this year; 86.2% of companies in the mineral and chemical industry experienced growth in transaction volume over the 120th session, and companies in the food and specialty industry indicated an increase of over 20% in buyer attendance, with remarkable rise in the number of new buyers.

Xu also said that despite the year-on-year increase of buyer attendance and export transaction, the adjustment of the supply and demand patterns in China's labor force, land, and other factors of production has imposed greater restrictions on the development of China's export-oriented industries. At the same time, many uncertainties are still prevalent in the international environment marked by growing unilateralism and protectionism and fiercer global manufacturing competition, leading to buyers’ cautious attitude in achieving orders. Most orders are mid- and short-term ones. 42.4% are short-term orders within 3 months, and 36.6% are mid-term orders covering 3-6 months, and 20.9% are long-term orders for over 6 months. Therefore, China’s foreign trade development is still confronted with many uncertainties and unstable factors.

Xu mentioned that generally speaking, the momentum of steady growth of foreign trade has been further consolidated. With the continuous deepening of supply-side structural reform, enterprises are rapidly developing new competitive edges and the internal drive for China’s foreign trade growth is improving. It is forecasted that China’s foreign trade will achieve steady growth.

(Canton Fair Press Center)