This article was originally published on The Nanfang on May 7, 2014
The Canton Fair, which comes twice a year, is known for making Guangzhou even more crowded and chaotic than usual. Taxis are a rarity, restaurants are full, and hotels raise their prices to take advantage of the increased demand. But today’s fairs are sedate compared to those held during the height of China’s red years.
Officially titled The China Import and Export Fair (formerly The Chinese Export Commodities Fair), The Canton Fair came into existence in 1957 to show off the communist country’s economic progress and to earn some foreign currency for Chairman Mao’s regime. At the inaugural fair in the spring of that year, US$1 million worth of business was done and traders from 19 countries and regions were invited.
For decades, the fair continued to be the cornerstone of China’s international trade strategy. A 1973 edition of Cambridge University’s The China Quarterly stated that the fair then accounted for 50% of China’s foreign trade. By 1984, the fair accounted for as much as 20% of the country’s exports. Now, it is just one of many international trade fairs in China, and last year for the first time on recent record, the number of companies with exhibits declined in both the Spring and Autumn sessions compared with a year earlier.
But even though the strategic importance of The Canton Fair has been eroded, it is still essential to the story of China’s economic rise. The most colorful period of its history was during The Cultural Revolution, a time that saw Red Guards trying to topple a statue of Sun Yat-sen, Hong Kong-based foreigners sneaking tomato juice up the Pearl River so they could enjoy Bloody Marys at the fair, and Japanese companies putting “Long Live Chairman Mao” in front of their brand names to impress their host country.
Generating capital under communism
The Cultural Revolution broke out in 1966 when Chairman Mao personally supervised the issuing of the May 16 notification. At that time, the most recent Canton Fair had been the most successful yet, with US$360 million in trade being done. The autumn fair of that year was even bigger, with US$481 million worth of deals being done. Then politics started getting in the way.
In April 1967, one of several factions of feuding Red Guards raided the Sun Yat-sen Memorial Hall and removed the sign that read “天下为公” which means something close to “All under heaven belongs to the people”. They also used rope to try to topple the statue of Sun. Mao, who cared about the Canton Fair even more than he cared about struggle sessions, issued a notice to the CPC Central Committee, the State Council and the Cultural Revolution Group urging for a trouble free Canton Fair.
In spite of this, the situation became so severe that Prime Minister Zhou Enlai had to fly down to Guangzhou on April 14 to help resolve it. The prime minister, who two months earlier had been diagnosed with heart disease and given doctor’s orders to stop working so hard, held a meeting with leading members of the rebel groups and calmly explained that it was their patriotic duty to let the Canton Fair go off without a hitch. Partly because of all this trouble, the fair saw a reduced return of US$418 million worth of deals being done, but things could have been a lot worse if it hadn’t been for Zhou’s intervention.
By the time of the next fair, things were still not under control. In August 1967, over 1,000 armed rebels built a fort and camped outside one of the main exhibition centres, blocking the entrance. Preparatory work for the autumn fair was disrupted and the opening was delayed from November 15th to December 15th.
This caused business to suffer with trade falling to US$406 million. Political unrest also caused the 1969 fairs to post a US$12.8 million decline on the year before.
Even after The Cultural Revolution ended, the fair was not entirely divorced from China’s domestic politics. In October 1976, a month after Chairman Mao’s death, there was a display of productsshowing the Chinese people’s “initiative and creative power in the struggle to criticize Deng Xiaoping.”
Business As Usual
But overall, the decade from 1966-1976 was a successful one for The Canton Fair with over US$1 billion in business being done for the first time at the Spring fair in 1971 and people from 107 countries and regions attending the 1975 fair.
A key reason for this was the eagerness of foreign traders to pioneer entering China. Americans were allowed to attend for the first time in 1972 after President Richard Nixon’s visit and traders from all over the world would accept political tension and unpleasant living conditions to get a chance to do business with a country that was still in one of the more hermetic phases of its history.
No foreigner was exempt from the customs of the day including “Asking instructions from Mao in the morning and reporting back to Mao in the evening.” The Japanese mostly stayed at the Guangzhou Hotel (广州宾馆) and eyewitness accounts from staff talk of Japanese, eager to be on good terms with their host nation politically, raising their fists and chanting “Long live Chairman Mao” with all the vigour of red guards. What a pity there were no camera phones around to capture this scene.
It was the norm for Japanese companies to put “Long Live Chairman Mao” ahead of their brand names to show that they were model guests, while hotel staff recall helping teach revolutionary songs to Japanese attendees. In 1999, the Japanese Minister for the Promotion of International Trade, who went by the Chinese name of 葛西 (Kasayi), impressed his hosts by showing he could still sing some of the revolutionary Chinese songs he had learned while attending fairs during the good old days.
Back then, it wasn’t just the foreigners who had to go out of their way to give a good impression. There are still remnants of the efforts made under Chairman Mao’s government in the late 1960s to make The Canton Fair successful. After Chinese traders complained of the conditions under which they were forced to greet foreign guests, the Guangzhou Foreign Trade Project was established and given 60 million yuan in subsidies at the orders of Zhou Enlai himself. Projects included the building of a new exhibition centre, the Liuhua Hotel and the Baiyun Hotel.
The Guangzhou Hotel was also built especially for the fair and at 86 metres and 27 floors was the tallest building in China at the time. Even so, plenty of foreign traders were happy to sleep in hotel corridors and write self-criticisms for Red Guards, just so they could get a slice of the action.
Still Bustling
Now Beijing and Shanghai are no longer inaccessible to foreigners. Traders aren’t expected to show allegiance to the communist regime and there are myriad ways in which a foreign company can enter the Chinese market. What purpose does the fair serve now?
In spite of predictions that it would become obsolete after China’s Reform & Opening Up, as the largest scale and most comprehensive business fair in China, it is still one of the best ways to make useful contacts and promote a business in what is set to become the world’s largest economy.
To the naked eye, The Canton Fair seems symbolic of the brave new China of skyscrapers, entrepreneurship and rural-urban migration. But it is the brainchild of a very communist government trying to negotiate an uncertain path through The Cold War-era global economy. It is for the best that nowadays the biggest hardship for most foreign traders is getting a hotel room, but it is hard to imagine it ever again being as exciting as it was during the days when traders had to demonstrate their left wing credentials to have a chance of smashing their competitors.
Kevin McGeary 