Chinese exporters seek new openings

More than 100 international companies are coming to Shanghai for the fair

By the BBC's Duncan Hewitt in Shanghai.

In China, one of the country's largest annual trade fairs has opened in Shanghai.

The East China Trade Fair features about 100 international companies seeking to enter the Chinese market, as well as more than 1,000 Chinese manufacturers looking for markets abroad.

Organisers say this year's fair is the biggest in the event's history and hope it will exceed the $1.25bn in contracts signed last year.

Everything from Inner Mongolian knitwear to teddy bears from Jiangsu province is on display in five huge exhibition halls at two separate venues in Shanghai.

Trade fair organisers hope deals worth more than $1.25bn will be done

The vast range of products is evidence of the increasing diversity of China's consumer industry and the manufacturers, mainly from eastern and southern China, are seeking to expand markets both at home and abroad.

WTO opportunity

China's exports soared last year to almost $250bn as domestically made goods from electronics to fashionwear took increasing shares of international markets.

And China's possible entry into the World Trade Organisation this year should bring further export opportunities.

But the fact that the number of international participants in the trade fair has more than doubled this year is also a reminder that Chinese manufacturers face an ever growing challenge from foreign competitors.

And China's domestic producers of goods such as consumer electronics are reeling from a bitter price war which has pushed some firms to the brink of bankruptcy.

Over-supply of TV sets, for example, has led to the slashing of prices eight times in recent years.

Clinton offer

And while China's consumer price index has shown signs of recovering in recent months - after almost three years of deflation - one of the country's biggest manufacturers of air conditioners recently announced fresh price cuts, in the first salvo of what is expected to be another major price battle this summer.

In response, Chinese companies are taking increasingly drastic steps to improve their sales.

One clothing manufacturer recently said it was offering Bill Clinton $2m to be its advertising ambassador.

Another has recently recruited actor Arnold Schwarzenegger to augment the usual array of Taiwanese and Hong Kong stars used in Chinese advertisements.