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Exporters turn towards China

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A Chinese and a US flag at a booth during the first China International Import Expo in Shanghai. JOHANNES EISELE/AFP

Exporters turn towards China

There is a notable no-show among the dozens of national pavilions at Shanghai’s massive import fair – the US – a metaphor for isolationist Trump policies that attendees say are pushing them closer to China.

The China International Import Expo opened on Monday with thousands of foreign companies wooing Chinese buyers with products including Italian helicopters, Canadian fur, Dominican cigars, and Japanese fresh fish.

China touts the first annual event as a milestone marking its economic transition from “the world’s factory” to a major consuming nation, and President Xi Jinping opened it with a vow to import $30 trillion in goods and services over the next 15 years.

But the US has snubbed the gathering amid an increasingly bitter tariffs standoff with China, with US President Donald Trump accusing it of unfair trade practices.

And foreign businesses and officials at the show said the US president’s combative approach to trade has made it imperative for them to turn more toward China.

El Salvadoran trade official Sigfrido Reyes said market turbulence caused by Trump had hurt his country by driving down prices of commodities such as coffee.

It now looks to China to reduce reliance on the US.

‘We want to diversify’

“What really worries us is the uncertainty. In an uncertain environment, everybody loses. So we don’t want to have all our eggs in one basket,” Reyes said.

China is expected to remain reliant on US electronics and other high-tech goods that it, and other countries, cannot yet supply.

But tariffs imposed by each side could cut off the flow of a range of other US goods.

While few dispute that China’s mercantilist trade policies need to change, the trade spat has started to bite in the US, where a Chinese shift to non-US suppliers of soybeans and other key import goods has left US farmers without buyers.

Major Chinese meat importers also have told they will simply source from other countries.

Even Canada, which relies heavily on US trade, wants to diversify.

“Of course we are close to the US and we always will be. But we want to diversify our trade, especially including China because it’s a huge country,” said John McCallum, Canadian ambassador to China.

Canadian officials said on Tuesday at the expo that Ottawa plans to double its trade with China by 2025.

China’s growing appetite for imports, fuelled by increasing incomes, will benefit many US companies, dozens of which are at the expo including Boeing, Caterpillar, General Motors, Honeywell and Tesla.

But the shocks delivered by Trump’s trade policies give opportunities to others.

China is already the world’s largest exporter and is catching up to the US on import volumes. The resulting trade relationships that China develops add to its global leverage.

Ye Ming, one of thousands of Chinese buyers milling about the show, imports footballs.

China increasingly buys such lower-value products from abroad as it moves up the global production chain, and Ye chose Pakistan because its sound relations with Beijing mean less political risk.

“Right now, if you are doing businesses with America, you’d have that problem,” Ye said.

“[The import expo] is also a message that America can buy from around the world, and we can buy from around the world, too.”

‘Tear down hurdles’

Attendees said China’s emergence as a powerful importing nation depends on whether it removes trade barriers it has used for decades to coddle domestic industries.

Xi opened the expo by declaring China’s resolve to tear down hurdles, but his comments were widely seen as repeating earlier unfulfilled promises.

“It is a huge market that is demanding every single product, but it is still very difficult to penetrate,” said Reyes.

But that means little right now to foreign delegates like Marcelo Sobrinho, who exports handmade shoes under the 71-year-old Brazilian brand Ferrucci.

Sobrinho said the China-US trade war resulted in both countries making Brazilian imports easier, and Ferrucci sought to take advantage by grabbing its first toehold in China.

“[The trade conflict] helped us. China opened its market and the US reduced import taxes. So two doors have opened for us,” he said.

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