Emerging markets enhance co-op amid gloomy economy

17 january 2013

GUANGZHOU — As the world grapples with the economic recession, emerging markets, led by China, have been trying to seek a way out.

Enterprises from China and other developing countries have shown a strong willingness for economic cooperation at the ongoing Canton Fair in southern China metropolis of Guangzhou, which kicked off on Monday.

China and Brazil opened a forum on Tuesday to help Chinese companies familiarize themselves with business opportunities in the south American country.

“Many Chinese companies are eager to know more about Brazil as they hope to expand businesses there,” said Wang Runsheng, deputy director with the China Foreign Trade Center, organizer of the fair.

Brazil has overtaken the United Kingdom to become the world’s sixth largest economy and China is expected to surpass the US to become Brazil’s largest import source, according to Wang.

Wang said the 2014 FIFA World Cup and the 2016 summer Olympics, both to be held in Brazil, will represent huge opportunities for Chinese companies.

A total of 552 foreign enterprises from 44 countries took part in the Canton Fair, mostly developing countries including BRIC nations like Russia, Brazil and India.

A delegation of 52 Indian enterprises, led by Rafeeque Ahmed, president of the Federation of Indian Export Organizations, took part in the event displaying products ranging from hand tools to kitchen appliance.

Ahmed said the participation of Indian enterprises would boost their exports to China as the country is gradually exiting from parts of industries that have a large labor force.

“As manufacturing costs in China goes up, it provides opportunities for other Asian countries to catch up. India, with huge technical manpower, will have an edge,” Ahmed said.

He said Indian companies have already begun exporting home appliances to China and are trying to introduce more products such as auto parts, medicine, crafts and garments.

He expects $100 billion of exports to China by 2018, which means annual growth rate of about 30 percent.

“This is a challenge yet an achievable target given the potential of the country,” Ahmed said.

Trade protectionism bounces

The 112th Canton Fair was held shortly after the US decided to impose extra tariffs on China-made solar products, accusing Chinese enterprises of enjoying unfair government subsidies.

The US Commerce Department on Oct 10 ruled that billions of dollars of China-made solar panels and cells should be levied anti-dumping duties ranging from 18.32 percent to 249.96 percent and countervailing duties from 14.78 percent to 15.97 percent.

Previously, Germany’s Solar World and several European enterprises filed an anti-dumping complaint regarding Chinese solar products with the European Commission. It granted the anti-dumping probe, indicating another wave of trade protectionism against Chinese enterprises.

As a result, Chinese solar enterprises are beginning to look elsewhere for possible business opportunities.

Run Moteng, a marketing manager with Yingli Green Energy, one of the country’s largest solar panel makers, said the company is considering tapping the Southeast Asian markets, though the European market accounts for about two thirds of its sales.

In the meantime, the company is seeking ways to lower production costs, mainly through technological innovation and efficiencies, in case anti-dumping duties are granted.

The Chinese government is also urging local companies to explore overseas markets beyond the US and the Europe.

The Chinese and Brazilian governments have set up a committee of coordination and cooperation and signed an agreement on bilateral trade and investment to facilitate trade between the two countries.