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Updates of Wenzhou Firms at the 109th Canton Fair

On May 5, 2011, the exhibitions of textiles and garment, cases and bags, and recreation products for the third phrase came to end, which dropped the curtain of the 109th Canton Fair (China Import and Export Fair). According to updated statistics, 622 Wenzhou firms showed up at the fair and harvested intended orders totaling to USD 303 million, a 16.2% increase over the last session.

The 109th Canton Fair was divided into three phrases from April, 15 to May 5 with the first phrase mainly for high and new technologies, electrical appliances, machinery and building materials, the second for light industrial products, and the third for textiles, garments and agricultural products. Though affected by the expectation of a higher global inflation and a stronger Yuan, the turnover of Wenzhou participants still got a stable rise because of the recovery of the world economy and a stronger demand for exports.

Although EU’s antidumping measures against China-oriented shoes lasting 5 years has terminated on March 31 this year, and the EU demand for importing shoes from China has also gradually recovered since the end of last year, the European orders for shoes have not increased greatly at the fair, according to the feedback of Wenzhou shoes suppliers. On the contrary, some Wenzhou participants even give an opposite result, saying the buyers from Europe and U.S decrease while the buyers from South America like Brazil increase apparently. For instance, Wenzhou Lucheng Hongda Bag and Case Factory received a total order of over USD 500,000 from South American buyers at the fair.

Meanwhile, the quotes from Wenzhou firms have been raised by 5 ~10% over the last year. “The quotes for shoes have risen by 10% at large.” Said by Pan Pingping, deputy director of Wenzhou Bureau of Foreign Trade and Economic Cooperation. The main reasons for the quote rise are a stronger Yuan and the rise in labor force and raw material costs etc. All these factors have also made buyers more cautious in placing their orders and a lot of them prefer intended orders. Also, small-amount orders are more than large-amount orders, and short-term orders are more than medium-and-long-term orders. Correspondingly, many Wenzhou firms use quote validity and a flexible exchange rate to avoid different risks.

In addition, those companies with a strong R&D power begin to enjoy great trade advantages. For example, Wenzhou Shengli Healthcare Equipment Co., Ltd. has applied more than 100 patents for their products, and the sales of their branded products iRest massage chairs have risen by 20% this year. It is undoubtedly logical for these companies to enjoy a greater power in price negotiation and obtain more orders because of their wide product range and high technological content.

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