By James Pomfret
GUANGZHOU, China, Oct 15 (Reuters) - Buyers from across the world converged in strength on China's largest trade fair on Thursday in another sign of reviving Western demand for Chinese goods, a day after surprisingly robust export data for September.
At the vast exhibition halls of the Canton Fair on the banks of the Pearl River in Guangzhou, organisers said they had sent out invitations to some 840,000 buyers from the United States and and Europe, as well as from the Middle East, Africa and Asia.
That is five percent more than for the previous fair in the spring. The global financial crisis was raging much more fiercely then, and the halls were far quieter. Orders shrivelled.
The deals done this time will not be known for a while, but a number of foreign buyers interviewed at the fair said they were planning to order more goods.
"You don't spend 20 hours on a flight to come here in a negative mood," said Rajesh Darira, a U.S.-based buyer for Caprisun Automotive in Georgia, who was hoping to pick up truck accessories and parts for golf carts.
Others, like John Staite, a buyer for Canada's Federated Co-operatives, a major retailer and wholesaler of building materials, described the mood at the fair as "more buoyant" than in the spring.
Staite said he was roaming the fair to try to secure cheaper suppliers, with an eye towards shifting another 12 percent of the firm's sourcing to Asia from Canada.
But he was also wary of getting caught out with large stocks of unsold inventories. "Sales are still pretty flat back home," he told Reuters.
FRESHENING THINGS UP
Over the past year, China's exporters, mostly clustered in coastal hubs around the southern Pearl River Delta and the Yangtze River Delta near Shanghai, have been pulverised by shrinking Western orders and thinning margins.
But that is changing. In recent months, there have even been pockets of labour shortages as factories crank up assembly lines to meet an increase in Western orders for the peak Christmas season.
"We all knew that exports would bottom at some point," said Andy Xie, a prominent economist based in Shanghai. "There was destocking on the buyer side, and we're seeing credit conditions ease so they can accumulate inventory for Christmas."
Those forces were apparent in data for September, which showed exports rising 6.3 percent from August after a nightmare year of mass factory closures and layoffs.
With some 50,000 exhibitors, the Canton Fair is a major platform for Western buyers to source goods from China. As such, it is a key barometer of trade sector sentiment.
Terje Talgo, the chief executive of Martinsen International, a major household and do-it-yourself chain in Norway with 600 stores, said he intended to increase orders by some 20 percent this autumn to try to lure tight-fisted consumers with fresher products.
"We need to restock and get new things for the coming season," he said.
STILL FRAGILE
Like the improving export and import data, recent cargo throughput in major Chinese ports has also been encouraging, but some Chinese factory owners say business remains tough.
At the cramped booth of Taiyue Communications, piled high with Internet and power cords, business has tended to come in the form of smaller, less regular orders.
"It's still not as good as when things were very good at the start of last year. We're only around 80 percent of the way there," said Ben Yeung, a sales manager for the Guangzhou-based factory.
At the Tiger Electric booth, its array of energy-saving light bulbs illuminating the hall, owner Wang Pei Cheng said one of his major clients, U.S. conglomerate General Electric Co, had slashed its orders by 80 percent this year.
"We've tried to diversify to other developing markets like the Middle East and Africa," he told Reuters as potential buyers from Syria, Nigeria and Tajikistan blinked at the bright lights.
"It's part of the stabilisation story," said Xie, the economist, adding that the export sector would remain fragile until there was a more substantial pick-up in Western demand. (Reporting by James Pomfret; Additional reporting by Alison Leung in Hong Kong; Editing by Alan Wheatley and Ken Wills)