Challenges remain as Canton Fair returns from Covid hiatus

The biannual Canton Trade Fair has evolved along with China over the years since first being staged in Guangzhou in 1957. At the start, the focus was on raw materials, but later shifted to manufacturing as China built itself up into the workshop of the world. Further evolution was on display at the latest show, with the country’s electric vehicles (EVs) taking centre stage as displays of manufacturing prowess and cutting-edge production. The fair has long been regarded as a gauge for the health of China’s trade and industrial progress.

By that measure, it has yet to fully recover from the pandemic. Attendance has returned just four years after the country’s largest trade exhibition endured its biggest setback: it was cancelled in April 2020 at the start of the pandemic and only resumed in April 2023. The people, at least, are back. The spring session set a new attendance record, with 246,000 participants in the three phases in April and May, up nearly 25 per cent from the sessions last autumn.

Despite the surge in visitors, they held on more tightly to their chequebooks. Participants signed US$24.7 billion worth of deals, organisers said, still far short of 2019’s US$29.3 billion, though it was an increase of 10 per cent from the autumn fair.

Over the years, the fair also has served as a barometer to trade and diplomatic friendship and frictions. The first fair took place during the China-Soviet Friendship Building era. But as tensions with the Soviet Union grew, Richard Nixon became the first US president to visit China in February 1972, and weeks later, American businessmen attended the fair for the first time.

This tensions barometer was at work again this year. About 160,000 of the attendees were from China’s Belt and Road Initiative partners. Just 50,000 hailed from Europe and the United States, which have accused China of allegedly dumping EVs, lithium ion batteries and solar panels while Washington has barred Beijing from access to high-end semiconductors. European and US attendance was up 10 per cent from the autumn fair, but the value of deals fell.

April trade data shows exports returning to healthy growth spurred by a rebound in global demand, but analysts cautioned that the domestic market remains the key economic driver.

Export demand helped China’s economy grow by a better than expected 5.3 per cent in the first quarter, but weak domestic consumption and a slumping property market still weigh. Canton Fair organisers said they expected buyers to carry on their work after the event, setting appointments to visit factories and inspect production capacity. By the next session starting in October, with most of the year behind us, a more complete portrait of China’s trade and economic recovery will be revealed.