China's largest trade fair opens
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Canton Fair, China's largest trade fair and a key barometer of its trade and economic development, opened Friday amid growing concerns that a stronger yuan would weigh on the nation's exports.
In addition to business opportunities, the multitudes of sellers and buyers at the fair, officially known as China Import and Export Fair, are watching closely the latest developments in the yuan exchange rate dispute.
"We are under great pressure. Should the exchange rate rise rapidly, many of us will be out of business," said Dai Chao, export manager of Wanjiale Gas Appliances, a medium-sized private company that sells gas appliances to east European and south American countries.
Dai's voice was echoed by many small and medium-sized companies at the fair, which make up about 70 percent of all 23,599 registered sellers.
"An abrupt appreciation of the yuan would devastate the smaller exporters whose profit margin mostly ranges from 2 to 5 percent," said Liu Jianjun, spokesman for the 108th Canton Fair.
"We are keeping a close eye on the upcoming U.S. government report on the currency practices of China," said Liu Guizhong, head of the overseas market department of Glanz, a leading Chinese manufacturer of home appliances.
The U.S. Treasury Department's report on exchange rates is due to be published on Oct. 15. The market is worried whether the United States would list China as "currency manipulator".
Analysts say China's currency policy has been stigmatized by some U.S. politicians who are trying to use it as a scapegoat for the weak economy and job losses in the United States as the midterm elections approach.
"Pushing for the appreciation of the yuan for political gains will only hurt the global market. Exchange rate changes should be based on the real conditions of China's economy and the trade market," said Su Jing, a foreign trade official with the Ministry of Commerce.
"China is at a crucial stage of restructuring its economy. Abrupt fluctuations of the yuan would not only hurt the country's economy but also worsen the investment environment in China and disrupt world economic development," Su added.
"As the impact of the global economic crisis is still lingering, currency disputes could cause some countries to reduce export quotas and increase taxes, leading to trade wars that would hurt everybody," said Shi Jianxun, economic professor with Shanghai-based Tongji University.
"The prices are already high. We would no longer be able to afford the goods here if the yuan keeps appreciating," said Barahukwa Mary, manager of a construction company in Uganda.
A total of 23,599 firms at home and abroad are participating as sellers in the 108th Canton Fair in Guangzhou, capital city of south China's Guangdong Province, organizers said.
The figure is 240 more than that at the previous fair in April.
Of the total, domestic Chinese firms made up 23,098, said Liu Jianjun, deputy director of the China Foreign Trade Center (CFTC).
The Canton Fair has been China's largest biannual trade fair since it began in 1957. Exhibits at the fair include mechanical and electrical products, textiles, healthcare products, food, sports supplies and other consumer goods, organizers said.
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