After Mao, Canton Fair Still Bustles

Times Staff Writer

Old-timers at the Canton trade fair still recall the days during the Cultural Revolution when Red Guards would knock on the doors of foreigners' hotel rooms late at night to carry on political "struggle sessions" and urge them to write self-criticisms.

Despite the turmoil, the visitors stayed on because, at the time, the fair provided the only opportunity for foreigners to do business with China.

"We used to spill blood for an invitation to the fair," one Western businessman remembers. "We used to swap notes in Hong Kong about which people and companies were being asked to come."

By comparison, the Canton trade fair of today is a relatively sedate affair. China is a quieter place now, and the only struggle sessions in evidence at the fair are marathon business negotiations.

Foreigners who once lugged tomato juice from Hong Kong--about 80 miles down the Pearl River from here--for makeshift Bloody Marys now drink comfortably in the bars of Canton's modern hotels. Some businessmen now merely stop briefly at the trade fair on the way to meetings in the once inaccessible cities of Peking and Shanghai.

Over the past few years, some critics have argued that the fair has been made obsolete by time and by China's opening to the outside world. Yet the fair survives, and a significant portion of China's exports continues to be sold here.

Earn Foreign Currency

The trade fair, formally called the Chinese Export Commodities Fair, has been held each spring and fall in Canton since 1957. It was originally designed to help the regime of Mao Tse-tung earn foreign currency and to show off China's economic progress.

For two decades, it was virtually the only point of contact between foreign businesses and China's state-owned enterprises. In a sense, the fair was a throwback to the old days of imperial China when foreigners seeking to trade with China were kept sequestered in Canton, about 1,500 miles from Peking, the capital.

It was at the Canton trade fair that foreign traders bid for the furs, hides, silk and Chinese handicrafts that they could not get anywhere else.

And, for that privilege, those invited were willing to stay five to a room or sleep in the hallways of Canton's Dongfang Hotel and to sit through lengthy lectures on the evils of capitalism.

During the early days of the Cultural Revolution in the late 1960s, Americans were still barred from attending the trade fair, and most of the traders were European.

"You have to remember that the Europeans never made so much money (in China) as during the Cultural Revolution," Judith M. Lubman, a San Francisco businesswoman and regular visitor to the trade fair, observed recently. "China was desperate for foreign currency then."

Americans were first allowed to take part in the fair in 1972, after President Richard M. Nixon's visit to China. About 40 U.S. businessmen came that year, and a larger number arrived in 1973.

Even after the Cultural Revolution ended, the trade fair was not entirely divorced from domestic Chinese politics. A story by the official New China News Agency in October, 1976, said the fair that autumn had featured a display of products showing the Chinese people's "initiative and creative power in the struggle to criticize Deng Xiaoping."

Meeting Place for Trading Officials

Within three years, of course, Deng and his supporters had taken control of the Chinese Communist Party and begun to put out the welcome mat for foreign trade and investment in China. Foreign businessmen who had for years been begging for permission to visit Peking before or after their regular sojourns to the trade fair now found it relatively easy to do so.

These days, the Canton trade fair still serves as a meeting place where trading officials from remote places like Gansu province in northwestern China can show off their wares to prospective purchasers from abroad. It gives traders from the West a chance to see what new goods are being produced in China, and it offers many Chinese who have not had the opportunity to travel overseas a bit of exposure to the outside world.

"It's hard (for Chinese enterprises) to send people to the U.S. and Japan," observed Wu Xinhui, deputy editor-in-chief of a Chinese magazine called International Business. "The trade fair is a good place to make business contacts while still in the country."

According to Chen Jie, vice minister of China's Ministry of Foreign Economic Relations and Trade, at each session of the Canton fair about $2.5 billion to $3 billion in contracts are signed. (Foreign purchases of Chinese goods make up the overwhelming share of these contracts, although China does occasionally agree during the fair to import some products from overseas.) As China's total exports for 1984 were about $25 billion, the spring and fall Canton fairs account for at least 20% of the country's exports.

The first thing visitors to the fair see is an exhibition of silk, China's most tried and true export product. Wandering through the spacious halls, one finds a variety of other products, from Chinese-made motorcycles to cloisonne pistols to Red Flag limousines.

Chinese enterprises from distant locations use the fair to test possible foreign demand for new products. One exhibitor at the fair, the Hebei No. 4 machinery plant, offered a 24-pound "traveling solar cooker" but seemed to be having difficulty defining the market for the device. "It is a good means for picnic during excursion. . . . It is suitable for those houses lacking of fuel," an English-language brochure for the device said.

Increasingly, the fair is being dominated by the presence of Hong Kong businesses engaged in trade with China. According to Chinese estimates, more than 60% of the 27,000 visitors to the fair this fall were from Hong Kong or Macao, and about 47% of all the goods sold were bought by Hong Kong and Macao businessmen.

In all, traders from 85 countries came to the Canton fair this fall. American officials estimate that the visitors included 600 to 800 businessmen and businesswomen from the United States.

Despite the passage of time, some aspects of the Canton fair have not changed. For the 20 days in which the fair is held, it is still difficult to find a hotel room here.

"I have a friend who slept in a car last night," said one American visitor to the fair.

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