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- Rising yuan hurts Canton Fair orders
Date: 1-Nov-2007 Sources: (Shenzhen Daily)
EXPORTERS struck fewer deals at China's biggest trade fair in Guangzhou because an appreciating yuan is making Chinese goods more expensive.
Domestic clothing makers signed US$3 billion of export orders during the October trade fair that ended Tuesday, a decline of 8.8 percent from the previous fair in April, according to data provided by the organizer.
'Fewer deals were signed by companies who make clothes, shoes, toys and motorcycles because foreign buyers failed to agree higher prices offered by Chinese exporters this year,'' Xu Bing, the fair's vice secretary general, said in Guangzhou yesterday.
China since late last year has cut export rebates on exported goods including textiles, toys and steel products, increased export levies and reduced import tariffs to narrow the country's trade surplus.
The plan aims to ease tension with China's largest trading partners. China's trade gap is expected to widen to US$250 billion this year from US$177.5 billion in 2006, according to a Commerce Ministry report released at the fair.
'Chinese companies are raising prices as the government has reduced rebate incentives and an appreciating yuan push up costs,'' Xu said.
Export orders signed by domestic shoemakers, toymakers and motorcycle manufacturers fell 9.2 percent, 11 percent and 31 percent respectively, during this month's fair compared with April, according to organizer figures.
The fair saw little sign of foreign buyers concerned that China's products are unsafe, Xu said.
'More than 150 of the world's largest retailers came to the trade fair this month, and they've expressed confidence in made-in-China goods,'' Xu said, identifying Wal-Mart Stores Inc., Carrefour SA and Tesco Plc. among buyers. Xu didn't provide breakdown numbers by individual buyers.
The yuan has climbed more than 10 percent versus the U.S. currency since the end of a fixed exchange rate in July 2005, and fallen 7 percent against the euro during the period.
The Guangzhou trade fair, known as the Canton Fair and held twice annually for the 51st year this year, attracted 190,000 foreign buyers from 213 countries and regions, an 8.3 percent decline from April. The event lured 7 percent more European buyers, whereas buyers from America and Asia fell 10 percent and 11 percent, organizer data show.
China machinery and electronic products, the main contributor to the country's export growth, dominated orders, with US$15.6 billion worth of deals signed and accounting for 42 percent of the event's total. The trade fair signed a total of US$37.5 billion worth of deals, 3 percent higher than the last trade fair, according to organizer data.
Europe, the United States and the Middle East remained the largest foreign buyers, and value of their purchases was 7 percent, 8 percent and 4 percent higher than April. Purchases by some Asian buyers, including South Korea and former Soviet Union members recorded growth ranging from 21 percent to 96 percent, the organizer said.
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