Despite problems, Chinese exporters expect mild growth this year

Sun Oct 21, 2012 5:04pm EDT
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By James Pomfret

GUANGZHOU, China (Reuters) - Chinese exporters at Asia's largest trade fair expect orders for made-in-China products to remain resilient for the rest of this year and even grow slightly despite shriveling demand from debt-stricken Europe and the strengthening yuan currency.

A Reuters poll of 85 small- to medium-sized exporters at China's Canton Fair found that while around a quarter of firms surveyed expected orders to drop this year, overall, orders were seen rising an average four percent in 2012 and 7.4 percent in 2013.

The results are reflected in Chinese trade data in September which showed exports growing 9.9 percent year-on-year, almost twice the rate expected, while imports returned to expansion after a period in the doldrums. Chinese officials have warned however that it was just one month's data and not enough to predict a trend.

"Pent-up demand that was withheld in the third quarter is being released in the fourth quarter and that will provide support for China's exports," said Tim Condon, ING's head of Asian research.

While trade sentiment can be difficult to gauge across diverse and seasonally-influenced sectors, the Canton Fair, crammed this autumn with an estimated 24,000 exporters, is a closely watched biannual indicator of China's gargantuan export market.

In the halls of the fair, set beside the Pearl River in Guangzhou city, there was much talk of global economic weakness sapping demand for Chinese goods. But there was also an undercurrent of resilience as Chinese factory owners shift to cheaper inland regions, launch higher-value-added products and tap new markets abroad and at home.

Forty-six percent of those polled across a range of sectors including chemicals, machinery, electronics, household appliances, construction materials and computing hardware, were optimistic about their prospects, while 41 percent were neutral and 13 percent pessimistic.

YUAN WEIGHS   Continued...