The bi-annual Canton Fair, the largest of its kind in China, finished this week and is supposedly a barometer of the health of mainland exports.
Official statistics from the Canton Fair show deals worth US$32.7 billion were signed during the three-week event held in Guangzhou every year.
It sounds like an impressive figure, but is the lowest in two years and almost 10 percent below the value of deals reached last year.
But even more worrying is that 87 percent of the overseas orders were on short-term contracts with an uncertain Europe and US forcing buyers to take a cautious approach.
The Canton Fair is held twice a year in the giant China Import and Export Fair Complex with more than 1.1 million square metres of exhibition space. Every conceivable item required by anyone, anywhere, is on show by 25,000 exhibitors.
The number of buyers was down 10 percent to around 190,000, and deals signed with the US were down 9.4 percent and with the EU, down 10.5 percent.
Unsurprisingly, the number of Japanese buyers fell by 20 percent, with signed China-Japan deals dropping by 37 percent. Sino-Japanese relations have plummeted in the wake of the territorial dispute over the Senkaku/Diayou islands in the East China Sea. Carmaker Toyota has halved its mainland car production after September riots saw Chinese protestors smashing Japanese cars and businesses.
Most of the goods ordered at the Canton Fair will go via sea freight to their destinations, so the poor performance of the exhibition could be an indication that the export slump will linger.
However, not everyone believes in the economic relevance of the Canton Fair. The South China Morning Post pointed out that China’s exports grew by 10 percent in September over the same month the previous year, following on from a 2.7 percent increase in August.
With such complete and utter uncertainty gripping the world’s largest economies, the crystal ball, the thumbsuck and the coin toss have replaced traditional benchmarks such as year-on-year comparisons that just don’t work anymore.
So do falling orders just mean the world’s retailers are being cautious until they see which way the economic winds will blow in the New Year? Or are they so pessimistic at sales prospects next year that they would rather risk stock outs than carry excess inventories? Or maybe their stock rooms are so full of inventory from sustained weak sales that there is no need to go big on orders?
Take your pick. Whatever the reason, exports will not be pouring in to ports and container ships this quarter or the next. It looks like the great export slowdown is here to stay as we wave goodbye to another Christmas bonus.
Stay well, 13th cheque. One day we will meet again.