The Canton Fair: Seizing the Silver Lining in the Cloud

by Lu Jie, Gao Wei, Lian Wen
  [Indonesia] William Widjaja

Launched in the spring of 1957, the China Import and Export Fair, popularly known as the Canton Fair, is the earliest comprehensive international trade expo held in China. It also boasts the largest scale, widest variety of commodities, highest business turnover and highest buyer attendance from the broadest range of countries. Hailed as a barometer of China's foreign trade, it serves as a window, microcosm and symbol of China's opening up.

An important bridge linking trade between different countries, it has spurred the growth of enterprises around the world.

The 126th session of the Canton Fair

The History of the Canton Fair

When the Canton Fair was launched, the People's Republic of China had just started foreign trade and badly needed resources for its development. Key resources like rubber, fertilizer, steel, machinery and asphalt had to be imported but there was a shortage of foreign exchange to do that. The outside world had little knowledge of China and it was also urgent for China to know the overseas markets.

Canton is a name formerly used for Guangzhou, capital city of Guangzhou Province in south China. The first Canton Fair was held in this city in spring 1957, opening a window to the outside world. It attracted more than 1,200 foreign buyers from 19 countries and regions and the turnover exceeded USD17 million, contributing substantially to foreign exchange earnings that year.

Omar Fahel, owner of a Lebanese family business of hardware and construction materials Omar Fahel and Co., was among the buyers at the first fair. He had established his company the same year and was an admirer of Mao Zedong. He believed Arabs and Chinese were brothers, linked by the ancient Silk Road for centuries and sharing a common future and converged interests. He felt the two should pursue win-win cooperation, mutual support and common development and made the long journey to China to participate in the first Canton Fair. Two years after attending the fair he sealed his first deal, buying 15 tons of iron wire, worth GBP100,000 at that time, from China National Metals Import Cooperation, then the only company of its kind in the country. (In 1965, the corporation was renamed China National Metals and Minerals Import and Export Corporation, or China Minmetals.)

During half a century, the businesses between them have extended from iron wire to screw, steel wire and wire hood.

In the 1960s, Omar Fahel's son Abdullah took up his father's mantle and continued doing business with China.

"At that time, there were only a dozen import and export corporations in China, each handling a single category of goods. The then average monthly wage of Chinese workers ranged from USD10 to USD30. The general manager of China Minmetals was excited about buying three bikes," Abdullah Fahel said, vividly narrating stories from more than half a century ago.

In the 1980s, Lebanon passed through a civil war. China Minmetals wrote to the Fahel family, expressing sympathy, and continued doing business with them despite the hostile trade environment.

Abdullah Fahel wrote in answer, "No matter the chaos caused by the war, even if only one person is left in our company, we will keep fulfilling the contract." This integrity and friendship has ensured more than 60 years of cooperation between the Fahel family and China Minmetals.

Abdullah Fahel has a deep affection for the Canton Fair: "It was the Canton Fair that brought me to China, where I have made friends as close as brothers, witnessed the great changes taking place, and promoted long-term development of our family business." He has preserved many documents that are precious to him, silent testimonies to the time-honored friendship between the Fahel family, the Canton Fair and China. The photographs on some of the documents have faded but the camaraderie has not.

Abdullah Fahel says three generations of the Fahel family, from his father to his son, love China as deeply as they do their own country and are confident that the friendly operation will continue.

The order for Omar Fahel's first deal with the Shanghai branch of China National Metals Import Cooperation in 1959

The invitation letter to Abdullah Fahel for the 43rd Chinese Export Commodities Fair (Spring) in 1978, and a bill of the Baiyun Hotel, where Abdullah Fahel stayed

Going Though Hardships and Growing Up Together

In 1996, Indonesian businessman Kuncoro Wibowo, whose ancestral home is in Guangdong, came to Guangzhou to attend the autumn Canton Fair. Since then, he has maintained close links with China.

In 1997, the Asian financial crisis swept through Southeast Asia. Indonesia, a Tiger Cub economy, saw its stock market crash and the Indonesian rupiah plummeted by 75 percent. Enterprises were forced to close down, and tens of thousands of people lost their jobs. There was panic in the market. Wibowo's company, the Kawan Lama Group, was also caught up in the crisis. The disrupted supply chains reduced its chances of survival.

Then Wibowo thought of the Canton Fair, which was going to open its 82nd session soon. He sent his best buyers to the fair, which remained buoyant, uninfluenced by the financial turmoil. The buyers found many excellent Chinese enterprises and quality Chinese products at the fair.

Due to the partners found at the Canton Fair, the group survived the crisis with stable supplies and quality yet cost-effective products. Wibowo said on several occasions that it was the Canton Fair that pulled the Kawan Lama through.

Indonesia, known as the "land of thousand islands", is the world's largest archipelago nation, consisting of 17,508 islands. The sea and underdeveloped infrastructure present considerable difficulties for transportation, agricultural irrigation, production, and even water and energy supply.

Wibowo, born and bred in Indonesia, knew only too well how the locals lived. He was looking for products that would help them improve their living conditions and at the same time expand his company's market. At the Canton Fair, his buyers looked for mechanical and electrical products the islanders needed. After extensive contacts and on-the-spot inspections, they finally chose to buy pumps and small generators from sellers from Jiangsu and Zhejiang provinces.

The products were small and portable. At the same time, they were high-powered, performed well and reasonably priced. These products could solve many Indonesians' water and electricity problems. They had assessed correctly. The made-in-China pumps made the farmers smile in relief. "Even in the dry season, we don't have to worry about watering the crops. The pumps have ensured a good harvest," a farmer said.

In the past, blackouts were a regular feature during the peak hours. The generators from China solved villagers' power outage problem.

The consumer, mechanical and electrical products bought from the Canton Fair sold briskly, opening a new market for the Kawan Lama Group. Today, Wibowo's chain supermarkets have developed into a commercial empire of over 300 stores in 27 major cities with more than 25,000 employees. Every day, tens of thousands of commodities are circulated in the supermarkets and sold to thousands of households.

Cheaper Glasses and Clearer Future

Kenyan businessman Philip was running a small optical shop when he first learned about the Canton Fair from a local newspaper. Philip was selling glasses purchased from a few local foreign wholesalers. The shop had a limited sales channel, a single commodity and high purchase cost. Therefore his products were expensive, which led to poor sales. Local students would often walk into his store, only to find the prices unaffordable. Their disappointment gave him a pang. He wanted to reduce the price for them but his hands were tied. The poor daily turnover at the shop became a headache.

Buyers from the Kawan Lama Group check out specialties from China's impoverished areas at the Canton Fair.

In 2010, Philip attended the Canton Fair as a member of the Kenyan buyers' delegation. Before leaving for Guangzhou, in addition to the excitement, he had misgivings and doubts.

But when he walked into the Canton Fair, it was a giant stride for his business.

He was dazzled by the variety of optical products. When he heard how much the designs he liked cost, he felt a surge of hope.

He knew his shop could be saved. He identified possible suppliers and rapidly expanded his business with competitive products and steady supplies after returning to Kenya. Within a couple of years, he had opened six chain stores in Kenya, and expanded from selling finished products to processing semi-finished products and wholesale, employing nearly 100 people. He had grown his business, created jobs locally, and contributed more in taxes.

Since then, Philip has attended the Canton Fair many times. He is proud to have broken the monopoly and decreased the price in glasses in Kenya through competition. More and more Kenyan students can afford glasses today. Affordable glasses have improved their vision, creating a better future for Kenya.

New Canton Fair Experience on "Cloud"

In spring 2020, Covid-19 pandemic swept the globe, forcing most international exhibitions to be canceled or postponed. The Canton Fair, which had never been interrupted for 63 years, faced the same hard choice.

Traditionally, the fair is known for face-to-face negotiations and clinching deals against samples. However, this time there was a risk that an on-site exhibition, which would see large crowds, could spread the disease. So the organizers decided to hold the fair online.

Although the Chinese are familiar with online transactions, holding a large-scale international trade fair online was going to be an unprecedented step and would require sophisticated software and hardware.

In recent years, the fair authorities had been developing a smart Canton Fair with many of the procedures conducted online as well as offline. The Covid-19 pandemic pressed the fast forward button in this process.

For the first time the Canton Fair, which sees trade among five continents, was held online using advanced cloud technology. At the 127th session, thousands of exhibitors and buyers from all over the world switched from face-to-face communication to screen-to-screen interaction, embracing the new model with trust.

Since it opened online, the 127th Canton Fair saw new foreign buyers register every day.

In Kenya, 8,000 kilometers away from Guangzhou, Vincent Samia Mulubwa was sitting at his desk early in the morning, searching and browsing information on the official site of the Canton Fair.

It was a new experience. He didn't have to undergo the trouble and costs of cross-border travel or face jet lag. He could join the exhibition and negotiate without disrupting his daily routine. For the first time, he saw enterprises' live promotion online, an experience he found both novel and interesting.

At the past Canton Fairs, Mulubwa's focus was electronic, electrical, automotive, computer, and communication products. These were all exhibited in the first phase of the fair and he had to finish visiting the exhibition areas and negotiating for different categories within five days. It was difficult to find time to really explore the business opportunities at the import fair. But the online Canton Fair gave him more time to tour different exhibition areas, understand the product details from the live broadcasts, and even visit factories on cloud.

What's more, through the fair's cross-border e-business zone Mulubwa could visit famous Chinese cross-border e-commerce platforms, where he got to know more Chinese companies. The online Canton Fair has a huge thumbs-up from him because it spared him high travel costs and enabled him to visit more exhibition areas.

The Canton Fair Complex in Guangzhou, south China

Fresh, a leading household appliance enterprise in Egypt, has attended 25 consecutive sessions of the Canton Fair, including the online fair, and derived new advantages from it.

Founded in 1987, Fresh has 150 million customers worldwide. Since its debut at the 103rd session of the Canton Fair, Fresh regards it as its most important platform for global marketing and promotion.

Hearing that the 127th session would be held online, Fresh responded positively. Its export director Khaled Ramzy said: "In the context of the current global (Covid-19) outbreak, the online Canton Fair is unique in history. It brings us much closer. And everything can be achieved by a click. Distance, language and time zone differences, and transportation costs fade away."

The first Canton Fair held on cloud has become a new highlight of global trade. It has broken new ground and built an efficient channel of communication for exhibitors, helping enterprises from all over the world expand their global market through a new form.

From Indonesia to Lebanon and then to Kenya in faraway Africa, different civilizations came close and embraced each other along the overland and maritime silk roads in the past.

The Canton Fair is their modern version, bringing businesspeople from distant lands together in win-win cooperation. It is a platform where people from all over the world share their dreams, deepen friendship, and seek common development and progress.


Project Overview:

The China Import and Export Fair, also known as the Canton Fair, was launched on April 25, 1957. Held every spring and autumn in Guangzhou, Guangdong Province in south China, the Canton Fair is hosted by the Ministry of Commerce and the People's Government of Guangdong, and organized by the China Foreign Trade Center.

By the 126th session in 2019, the fair's export turnover totaled USD1.41 trillion, and 9 million foreign buyers had attended the fair. Currently, each session of the fair is held in a 1.19 million-sq-km area. Around 25,000 domestic and overseas exhibitors and nearly 200,000 foreign buyers from over 210 countries and regions attend the fair.

The 127th Canton Fair was held online from June 15 to 24, 2020. Over 26,000 domestic and overseas enterprises exhibited their products, and buyers from a record 217 countries and regions registered for the fair.