It’s Canton Fair time again

Mid-April Guangzhou sees all kinds of hotels, inns and guest houses triple their daily rates, more policemen walking around major public areas in the city center, more picky taxi drivers dashing around for foreign businessmen, more dressed-up university students (mostly girls) squeezing into the cramped city subway lines, and more problems for local citizens to get a taxi. If you happen to come across any of these lately, you might realize that it is that time – Canton Fair again!

Canton Fair 2011, with its official name as the 109th China Import and Export Fair, has already entered its 54th year. With a history of over a half century, the biannual international trade fair has been and still is the biggest commodity fair across the country. The question is: Will it still be the center of Sino-international trade in the coming 5 to 10 years?

Quality is the new name of the game

Traditionally, the mission of the Canton Fair is to provide a platform for foreign buyers to directly negotiate with Chinese manufacturers and get the lowest price possible. In the past 50 years, this trading model has successfully turned China into a primary low-cost world-class workshop worldwide. However, global manufacturing businesses in the 21st century put quality as their number one goal. Cheap price is no longer the only concern for global buyers who are doing business with China.

Even before the 2006 Mattel China-made Barbie toys disaster, international manufacturing industry has raised increasing concerns on the quality and safety of Chinese products. Global buyers in Canton Fair can find the best quality samples ever, but that doesn’t always guarantee the same high quality in the mass production. Regularly there are stories of bad quality products reaching their destination with little resemblance to the approved samples, or the first shipment arriving close to the original samples followed by the next two boxes of junk. Nowadays many experienced global buyers would rather pay a site trip to the local Chinese factories for a closer look at the in-house production lines and quality control systems.

Brokers masquerading as manufacturers

For the global buyers who are keen on cheap prices, Canton Fair may not be their ideal arena either. Many Chinese participants in the Canton Fair claim to be local manufacturers, but they are in fact outsourcing agents who charge commissions on every single unit. Meanwhile, the current significant inflation of China has also posed a big threat for the country to maintain its competitive product prices. In fact, many Chinese toy manufacturers participating in the Canton Fair 2011 are anxious about their international trades because it has become a great challenge for them to maintain their competitive pricing edge. They have to pay higher wages for their frontline workers and invest more on their quality control systems so as to meet the stringent North American and European product quality and safety standards.

Increasingly, many global industrial giants in the engineering sector prefer to directly subcontract their manufacturing to some foreign own but China based companies such as Chinasavvy, instead of wandering around the Canton Fair conference halls. Driven by quality and excellence, Chinasavvy works to OEM designs provided by North American and European buyers, employs local bilingual engineers and QC specialists with up-to-date computer simulations to closely monitor mass production in local Chinese factories. With its capability to guarantee consistently high quality control and consistent product delivery, Chinasavvy welcomes North American and European buyers to its head-quarter office.

Is there a future for the Canton Fair?

In the 21st century when international manufacturing industry is quality oriented, how far can the broker dominated Canton Fair continue? When international industrial buyers require high quality assurance, the sub-contract manufacturing mode run by Chinasavvy is likely to be the major trend in global manufacturing industry in the next decade. Can the Canton Fair be equally innovative and move forward to catch up with such market trend? Let’s wait and see.