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<\/p>\nRising tensions in the Middle East cast a fresh shadow over the opening of China\u2019s largest trade fair, at a time when the impact of geopolitical shocks is being reflected in the nation\u2019s trade figures.<\/p>\n
In conversations across sprawling exhibition halls after the Canton Fair opened its doors on Wednesday in China\u2019s manufacturing hub of Guangzhou, domestic exporters and foreign buyers sounded each other out, trying to gauge how far those shocks might ripple through global trade.<\/p>\n
The threat of US tariffs continues to weigh on sentiment, and exporters across a range of industries discussed how they spent the past few years reducing reliance on the American market. Several have been pinning hopes on Europe as a lifeline, while growth in demand from emerging markets has also offered a cushion.<\/p>\n
Yet, widening uncertainties amid Middle East tensions are forcing a reassessment. Chinese exporters say geopolitical risks, from disrupted air routes to energy-driven inflation, are exposing fresh vulnerabilities in the very markets that they had come to depend on.<\/p>\n
Spanning three weeks, the Canton Fair, formally known as the China Import and Export Fair, is widely seen as a bellwether for China\u2019s vast export machine. This edition features a total exhibition area of 1.55 million square metres (16.68 million square feet), 75,700 booths and more than 32,000 participating companies \u2013 all exceeding records, according to organisers. There are also about 3,900 first-time exhibitors.<\/p>\n
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Jason Tan, a lighting exporter from Zhongshan, Guangdong province, said travel disruptions might affect buyer attendance. \u201cReduced flight frequencies and higher prices for routes via the Middle East have not only restricted Middle Eastern buyers, but also affected customers from Europe and parts of Asia, due to transit issues,\u201d he said.<\/p>\n
At the same time, cost pressures are intensifying. Tan pointed to sharp and unexpected increases in raw materials for his factory, with polycarbonate prices up 40 to 50 per cent and ABS plastic \u2013 the material used to make Lego pieces, among other items \u2013 up around 20 per cent since the US-Israel war on Iran began in February, pushing overall production costs up by roughly 15 to 20 per cent.<\/p>\n
However, passing on those increases has proven difficult. \u201cMajor clients can accept, at most, a 5 per cent price increase,\u201d he said. \u201cIf it goes higher, they will simply choose to delay placing orders.\u201d<\/p>\n
Tan added that European demand, once held in high regard, had begun to weaken. \u201cI spent a month in Europe last month to visit buyers and retail channels; inventories are high, and sales are slow,\u201d he said.<\/p>\n
Other exporters echoed similar concerns. \u201cBuyers may still come to look at new products, but order volumes will inevitably decline,\u201d said Wu Sheng, a home-appliance exporter from Zhejiang province. \u201cNo one wants to take risks at the moment.\u201d<\/p>\n
We expect that Middle Eastern buyers at this Canton Fair might increase, but the order situation is still hard to judge<\/p>\n
Yan Wei, exporter<\/p>\n
Data from major trading hubs reinforces that caution. \u201cIn the past month, some merchants\u2019 orders from the Middle East market have dropped by half compared with the same period last year,\u201d Xu Yan, president of the Yiwu Cross-border E-commerce Association, was quoted as saying last week by the National Business Daily.<\/p>\n
Xu added that everyone was waiting to see how the war unfolds.<\/p>\n