China's Canton Fair Suggests Moderate Christmas Spending

Indicators from the latest China Import and Export Fair in Canton suggest that the upcoming Christmas season will be softer for China's exporters than a year ago, but that conditions are recovering, says Alaistair Chan, associate economist at Moody’s Economy.com.

 

According to Chan, transactions volumes at the fair, a trade show held in autumn and spring every year, are a forward indicator of exports. “The initial phase of the fair, featuring home appliances, tools and hardware, consumer electronics and other goods, drew robust demand from the U.S. and Europe,” says Chan, quoting the state media.

 

Detailed statistics are not available, but broad indicators from the Ministry of Commerce show that the total volume of new orders was US$30.47 billion, up 16.2% from the spring fair six months ago. Chain explains that orders are usually higher in the autumn fair given its proximity to the Christmas buying season, and total orders were down 3.4% compared to the autumn 2008 fair.

 

“Orders for the year are down 20% compared to 2007, when conditions were booming,” notes Chan. “Also, contracts are being made with shorter timeframes, with 92% of the orders at the latest fair lasting less than six months,” comments Chan, adding that foreign buyers will stick to a short term approach to avoid building up inventory until demand noticeably strengthens.

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