[Analytics] China’s Belt and Road plan helping foreign firms and hurting mainland exporters

The Belt and Road Initiative is China’s plan to grow global trade along the Silk Road trading routes to Europe, Africa and the Middle East. There are now a growing number of foreign exhibitors from belt and road countries at the country’s biggest export fair that is currently underway in Guangdong province. He Huifeng specially for the South China Morning Post.

China’s “Belt and Road Initiative” has created unexpected, and often unwanted, challenges for China’s small and medium-sized exporters, according to veteran Chinese traders attending the Canton Fair.

While traders pay lip service to the government plan to recreate the Silk Road trading routes to Europe, Africa and the Middle East, some also worry that the initiative is generating new competition for the already embattled export sector.

“China’s top leaders went to belt and road countries and promoted big infrastructure projects. But in our actual trading process, the national strategy doesn’t help much for small and medium-sized manufacturing exporters like us, as few customers from belt and road countries know the concept of the Belt and Road Initiative,” said a salesman with Guangdong-based Aokly Power.

“So far, we can apply for subsides from the government for taking part in exhibitions in belt and road countries. It seems it’s the only benefit from the belt and road plan for small exporters.”

We can apply for subsides from the government for taking part in exhibitions in belt and road countries. It seems it’s the only benefit from the belt and road plan for small exporters.

Smaller traders also worry that foreign exhibitors from developing belt and road countries are attending the country’s biggest export fair that is currently underway in Guangdong province less to sell their goods but rather obtain ideas about new products they could use to compete with Chinese exports.

“We have come to the Canton Fair for many years. It is obvious that there are more and more merchants from the belt and road countries in the past two years. And there is a feeling that our veteran traders still don’t like it,” said a stone exporter, who declined to be identified.

“They feel a growing number of peers from countries along the belt and road routes, especially those from emerging manufacturing hubs like India, Vietnam and Cambodia, are coming to the Canton Fair to copy and imitate our prices and workmanship, or doing branding and marketing at the Canton Fair.”

“China has always been the factory of the world, and buyers from all over the world have come to the Canton Fair to purchase products made in China. Now, our exports of goods has been greatly affected by trade disputes, and [China’s] national policy has not solved this problem yet. Meanwhile, we have to make room for our direct rivals at the fair because the state is providing tremendous goodwill and convenience to these countries for its belt and road plan.”

They feel a growing number of peers from countries along the belt and road routes are coming to the Canton Fair to copy and imitate our prices and workmanship, or doing branding and marketing at the Canton Fair.

At the fair, 383 overseas manufacturers are showcasing their products to buyers from cross the world, with over 60 per cent from belt and road countries, including Turkey, Egypt, India, Nepal, Malaysia and Thailand.

“This is my third visit to the Canton Fair,” said Indian buyer Hishit Mehta. “It’s the first time I’ve seen the products from other countries, in addition to Chinese brands. There was no such exchange before. It can’t be said that their products are better than Chinese products, but I am glad to have more options.”

The manufacturers are producing products from home appliances to mechanical tools and motor oil, which are the same products Chinese exporters are also selling at the fair.

“Take our stone, as an example. The gap between our products and those of manufacturers from Pakistan, Vietnam, and the Philippines has narrowed in price and quality. Now they have a huge advantage because they are not affected by the [US] trade tariffs,” the unnamed stone exporter said.

“In fact, we Chinese small and medium-sized enterprises are very unhappy and oppose seeing our government invite them to the fair. It’s giving them a good chance to grab our clients.”

Deep Sangani, export manager for Sunhearrt Ceramik, a ceramics producer in Gujarat, India, seemed to confirm the fears that foreign exhibitors are taking business away from Chinese producers.

“I don’t know the Belt and Road Initiative very well, but our products have a growing advantage over Chinese products, and many Chinese customers import our products,” Sangani said. “This time at the Canton Fair, we also attracted customers from Africa and South America. It’s very effective and helpful.”

In fact, we Chinese small and medium-sized enterprises are very unhappy and oppose seeing our government invite them to the fair. It’s giving them a good chance to grab our clients.
Unnamed stone exporter

Indarto Sunarjo, export coordinator for Maspion Group, a home appliance producer in Indonesia, said the belt and road plan further opened up foreign markets for his company.

“In the past, it was difficult for us to enter the Chinese and overseas markets by ourselves. The Belt and Road Initiative is a good opportunity to help us to connect to the world,” he said.

For foreign exhibitors, the Canton Fair remains a good opportunity regardless of the belt and road plan.

“I’ve never heard of the Belt and Road Initiative, but I think the Canton Fair is a good platform for buyers from many countries to get to know our Egyptian brands,” said Samia Moustapha, a chemical sales engineer with RAK, an Egyptian industrial lubricants and motor oil manufacturing company.