A Chinese trade fair dedicated to imports is being watched closely as observers and foreign businesses wonder how much China will buy after touting a new consumption-promoting “dual circulation” economic shift.
Crowds have been congregating at Shanghai’s sprawling National Exhibition Center since Wednesday with more than 400,000 domestic and foreign visitors set to attend the China International Import Expo, Shanghai’s municipal government says.
The city is holding arguably the world’s biggest exhibition with the largest gathering of people at one venue since the novel coronavirus gripped the globe.
But the risks from the droves of exhibitors and attendees at the six-day expo have not caused jitters for Shanghai cadres, who appear more concerned about how much this year’s turnover will drop compared with previous events.
“China has by and large stamped out Covid since April and we also have tools to keep track of aggregations of people at the exhibition venue and elsewhere,” said a media liaison officer of the expo’s organizing committee, drawn from officials from the ministries of commerce and public health.
Still, Shanghai officials and the commerce ministry are said to be agonizing over the drop in foreign participation this year.
The national expo is the brainchild of President Xi Jinping to open up China’s massive consumption market for international firms. It also aims to placate Washington amid the latter’s grudges over China’s yawning trade surplus with the US.
Approximately 2,000 exhibitors from Hong Kong, Macau, Taiwan and elsewhere have set up booths at this year’s expo, down from last year’s 3,000 vendors. The bargain-hunting horde of local residents seen in previous years is also diminished, as organizers have limited admission to pre-registered professional visitors to prevent overcrowding.
The turnout this year will gauge the resilience of China’s consumption market and how much demand Xi’s new inward-looking paradigm can generate for international businesses. At last year’s expo, more than US$73 billion worth of goods and services were sold.
But Xinhua said there were fewer foreign participants this year due to travel restrictions and quarantine orders, as well aw intensifying geopolitical headwinds, would not dampen Beijing’s resolve to open up its markets.
In his keynote speech delivered via video, Xi sought to assure that China’s new emphasis on internal circulation was not a closed model and that the strategy would benefit all countries.
Apart from his familiar mantras on reforms, open access and free trade, Xi pledged that China will splurge no less than $22 trillion by 2030 on foreign products, particularly consumer goods.
That grandiose sum, however, failed to impress certain Western entrepreneurs who seek greater access to the world’s most populous country. Xi’s forecast means average annual imports of $2.2 trillion for the next ten years but China already imported around $2 trillion worth of foreign goods in 2019, according to the figures from the commerce ministry.
What’s more, the pandemic has snarled China’s trade flow and inbound trade has actually fallen this year. And Beijing may use Covid-19 as an excuse not to honor previous deals.
“Even if there won’t be too much exciting growth in China’s annual imports for the next five to ten years, Xi’s $22 trillion promise still means his new ‘internal circulation’ drive to spawn domestic consumption and tech self-sufficiency will not put a big dent in China’s demand for foreign goods – around $2 trillion per year until 2030 – and that’s already a big assurance,” said Zhang Weiyin, director of the Center for China Development Studies of the Fudan University in Shanghai.
He added that amid uncertainties from the high-stakes US presidential election and the last-minute halt of Ant Group’s landmark IPO in Shanghai and Hong Kong, Xi’s ten-year pledge to buy goods from abroad should raise business prospects.
Ker Gibbs, president of the American Chamber of Commerce Shanghai, said he found it reassuring that, unfazed by the quarantine red tape and souring bilateral ties, representatives from around 170 American companies arrived at the expo to showcase their wares.
These include big names such as Microsoft, Intel, Qualcomm, Chrysler, Tesla, Ford, General Motor, Nike, Tyson Foods, Pfizer, and Procter & Gamble, according to the official exhibit catalog.
At last year’s expo, 192 US exhibitors formed the largest foreign delegation.
“The Shanghai import expo could be the only large offline fair in China and elsewhere this year, as you cannot imagine holding such a big event in the US or Europe, where many places have entered a new lockdown,” Gibbs said.
“Thus American firms already enjoying wide presence in China find it convenient to attend the expo to further ratchet up their marketing efforts and explore new avenues of sales.”
He told Shanghai’s official Jiefang Daily that US companies still felt welcome in China despite Washington’s trade war with Beijing and that if not for the travel restrictions and compulsory quarantine more American businesses would have come to the expo to tap the only major economy worldwide that has returned to positive growth.
More than a dozen Australian companies are also attending the expo despite a new low in Canberra’s ties with Beijing and the latter’s retaliatory taxes and restrictions on Australian goods.
Though ties are frayed for various reasons, not least Australia’s leadership role in calling for an investigation into the origins of Covid-19 in China, Australian ambassador to China Graham Fletcher said he still aimed to keep up bilateral business-building efforts.
A joint product promotion show saw the top Australian envoy make a fast-talking sales pitch for Australian wines, beef, lobsters, cotton and iron ore.
Chinese Foreign Minister spokesperson Wang Wenbin said on Monday that Chinese importers of Australian products “had taken their own initiative” to cut transactions but Australian firms were still welcome to attend the Shanghai expo.