With the US set to lower tariffs on US$30 billion worth of shipments from China, Chinese exporters said this week they expected a new wave of orders from American buyers and planned to reactivate idle factory capacity.

Many among the 32,000-plus Chinese exhibitors and 210,000 preregistered foreign buyers at the twice-yearly Canton Fair, China’s oldest and biggest trade exhibition, shared that upbeat outlook this week – though it was tempered by stiffer headwinds from the European market. Chinese manufacturers at the fair, which runs for nearly three weeks and is widely seen as a bellwether for the health of China’s vast export machine, expressed growing optimism that tariff cuts would boost their full-year orders from the American market by roughly double-digit orders of growth compared with last year.

A steady stream of buyers from the United States on Thursday, the fair’s opening day, bolstered that outlook. Following President Xi Jinping’s state visit to the US last month, Beijing and Washington announced details of a bilateral Board of Trade that will oversee tariff cuts on goods worth US$30 billion on each side.

Chinese products on the list are mostly everyday consumer items, such as toys and household goods, and over 90 per cent of them would return to most-favoured-nation tariff treatment when entering the US, with all additional duties waived, according to the Ministry of Commerce.

Xu Zhiman, general manager of Hangzhou Zheben Technology, a family-owned manufacturer of weighing scales, said there were already signs US order volumes would be up at least 15 per cent on last year. She said she was optimistic for even further growth if the tariff cuts came into effect.

US clients are sharp negotiators who always squeeze margins, so everything hinges on product differentiationChen Haibo, Crossbow Brand Electric“If the tariff cuts actually go through, we’re expecting this momentum to carry right into next year,” Xu said. “We’ll definitely ramp up production, since we’ve got over 30,000 square metres (322,917 square feet) of factory space, and a chunk of it is just sitting idle right now.”

Zhou Nana, sales manager at Chongqing Huifan Technology, said several American clients were among the dozens of buyers who visited its booth on Thursday.

The firm supplies biometric identity solutions and palm vein recognition technology. Chen Haibo, general manager of home appliance maker Crossbow Brand Electric, said the pending US tariff cuts on some consumer goods had “clearly” brought back buyer interest. “US buyers in home appliances have a much stronger drive to attend the fair and place orders,” he said. “Previously, several American clients kept pushing us to build factories overseas to bypass tariffs, but now they seem to have dropped that push.”

Chen said that instead of offering discounts, his firm had kept its baseline wholesale prices for US-bound products like air coolers and air purifiers unchanged from those quoted at the previous fair in April.

“US clients are sharp negotiators who always squeeze margins, so everything hinges on product differentiation,” Chen said. “Factories must balance local market needs with client profitability through steady innovation.”China registered a 36.3 per cent year-on-year jump in worldwide exports last month, and a record US$133.5 billion trade surplus. Shipments to US rose against a low base last year, growing 39.56 per cent in September. But exporters at the fair anticipated smaller order sizes, stricter price demands from clients and longer payment cycles in the massive EU market.

Fitch Ratings says European demand is being hampered by weak consumer spending and regulatory hurdles. Liang Xiong, a lighting exporter focused on Europe, said France was a barometer and was in a “slow-moving recession.”“Order volumes in Europe will shrink, and prices will come under pressure, yet customers still demand the same quality while pushing for longer payment terms,” Liang said.

New European Union environmental rules, from carbon footprint requirements to product packaging, were also influencing buyers’ cost calculations, said Liu Kaiming, founder of the Shenzhen-based Institute of Contemporary Observation and a long-time supply chain researcher.

“Even if they reach an agreement at the fair, orders may fall through later if they cannot provide required compliance documents,” Liu said.

Regulatory and financial hurdles could weigh on exporters’ bottom lines well into next year, vendors and analysts said, adding that if European buyers pushed for longer payment terms and placed smaller orders, Chinese firms would face higher upfront costs.

Exporters at the fair said diversifying into emerging markets, particularly South America and the Middle East, remained an indispensable workaround for volatility in Western markets.

Zheng Donghua, a sales manager for agricultural drones at TopXgun, said strong demand for agricultural spraying had tripled the company’s market share in South America.

And at Shadow Technology – which provides interactive touch projection systems that turn surfaces into interactive touch screen displays – sales manager Billy Gong said South America accounted for 70 to 80 per cent of overseas sales, even though it only began selling there this year.