In fiscal year 2001, the number of trade leads submitted by Agricultural Trade Office Guangzhou reached 41. The value of purchases resulting from trade leads exceeds U.S. $ 1 million and purchases being negotiated are estimated to range from US $ 2.4 million to 3.1 million. Chinese importers appreciate the trade lead service.

Compared with the previous year, the number of trade leads submitted by ATO Guangzhou in fiscal year 2001 has increased by 2.5 percent. However, the dollar value of purchases resulting from trade leads has decreased. Due to the crackdown of smuggling in South China, the market was sluggish. The feedback of the trade lead survey indicates that private companies with strong financial back up have become the major importer of U.S. products, unlike several years ago when the state-owned trading companies were playing the leading role. After China enters the World Trade Organization, the private companies will play a more important role in bringing into China foreign products because by that time they will have the trading right to compete with the state-owned enterprises.

Recruitment of trade leads is one of the routine tasks of ATO Guangzhou. The office sends out trade leads forms to importers who inquire about U.S. products, to visitors at exhibitions or shows, and to participants at seminars or in in-store promotions. After receiving the trade lead information, we provide the U.S. suppliers list to the potential buyers and forward the information to USDA cooperators to help identify qualified suppliers.

In the new fiscal year, ATO Guangzhou plans to continue its effort on searching for Chinese importers who have the purchasing power and to help these players to find the most suitable suppliers. Besides soliciting trade leads, the office will encourage Chinese importers to increase the amount of their purchases. According to the feedback, importers who have a good understanding of U.S. products are the ones making effective use of trade leads. They have either been to the United States to visit food shows, farms or processing plants or met with U.S. exporters in China. Organizing trade missions to participate in U.S. food shows and visit U.S. farms or processing plants are effective in encouraging Chinese buyers to buy U.S. agricultural products.

Number of Trade Leads Submitted during past Fiscal Year 41
Number of Trade Lead Surveys Distributed 16
Number of completed survey forms received 12
Average number of responses from U.S. exporters per trade lead 6
Total number of purchases from U.S. exporters resulting from trade leads 10
Total value of purchases from U.S. exporters resulting from trade leads More than US$ 1 million
Value of possible purchases from U.S. exporters still being negotiated as a result of Trade Leads
US$ 2.4 million to 3.1 million
Average number of responses from non-U.S. exporters per trade lead 1.4
Total number of purchases from non-U.S. exporters resulting from trade leads 3
Total value of purchases from non-U.S. exporters resulting from trade leads US$ 620,000
By commodity, list Trade Leads which had no response from U.S. firms Lemon, raisin


Major Reasons Importers Did not Buy U.S. Products -- (Number of Responses)
No response to inquiries sent to U.S. exporters -- (2)
Prices too high-- (7)
Products offered did not match inquiry -- (0)
No Products of interest -- (0)
Quality of samples was poor -- (0)
Products do not meet import regulations -- (1)
Difficulties in obtaining foreign exchange -- (0)
Size of minimum shipment too large -- (0)
Size of maximum possible shipment too small -- (0)
Inadequate packaging -- (0)
Other [Explain] -- (1) [Because of the BSE and Food-and-mouth Disease, the Chinese government carried out stricter inspection regulations on the importation of meat products. The Chinese trading company was unwilling to take the risk of having problems in bringing into China meat products from the U.S.A. However, they said they will continue to import U.S.
products after the BSE and Foot-and-mouth Disease problem is solved.]

Suggestions for Improving the Trade Leads System:

Chinese importers believe that the trade leads service is a helpful means for them to source U.S. products. In FY 2001, two trade leads did not receive responses from the U.S. suppliers. On average, each trade lead receives six responses, the same level as the previous year. The importers seemed to be satisfied with the Trade Lead service and do not have many suggestions for improvement.

Other Comments:

Chinese importers recommend that the trade lead system be continued since this is almost the only way for most of them to contact the U.S. suppliers. Chinese business is still price sensitive. This situation will not change in the near future because the living standard in China will not have improved greatly in the interim. As indicated in the survey, high price is still the most important factor for Chinese importers not to buy U.S. products.

The survey shows that several big players assume a dominant role in importing U.S. products. The ATO Office did 41 trade leads, sent out 16 survey forms and received 12 replies because several trade leads are linked to a single big player.

ATO Guangzhou has found that local traders are still interested in a Chinese version of the Buyer Alert. Using the bilingual website of ATO Guangzhou, we will resume providing this service as a complement to the trade lead service in FY2002.

For Chinese importers interested in visiting food shows in the United States and meeting with U.S. suppliers, ATO Guangzhou will facilitate their travel through visa referrals and organize trade missions. ATO Guangzhou will also recruit U.S. suppliers to come to China to promote their products.