Buy Chinese

The Trade Downturn

As I was recently skimming the All Roads Lead to China blog, a note about the Shanghai Trade Expo caught my eye. Richard Brubaker made a note that while foreign attendance at the Expo was only down by 5 percent, orders were down by nearly 40 percent. He quotes organizers as saying, "orders to the U.S. fell nearly 47 percent to $310 million, while sales to Japan fell 27 percent to $656.9 million. Europe deals fell 40 percent to $524.4 million." Clearly the foreign buyers aren't rushing back to China yet. The question is, will they?

Protectionism Brewing?

As nations tighten trade borders and encourage citizens to buy local (the most noteworthy example being President Obama's "Buy American" plan), the tendency to turn toward protectionism during times of economic turmoil seems to pose a further challenge to Chinese export markets. As the Chinese export markets take a beating, reportedly falling 17.5 percent in January compared to last year's figures, the Chinese government has pledged to gradually cut export-related taxes to zero and increase financial help for struggling exporters.

As is constantly being reiterated again and again, it's too soon to tell how this is all going to play out, but I'm left to wonder what effects a continued decline in exports could have on Shanghai, one of Asia's largest trade ports.