China to rebrand itself as world’s importer at Shanghai expo
Mixing political summitry with a trade fair, heads of state, trade ministers and executives from multinational companies will gather in Shanghai on Monday to hear President Xi Jinping tout China’s role as a global importer.
Beijing is billing the China International Import Expo (CIIE) as its most significant event this year and as a demonstration of commitment to globalization as its economic growth slows and a trade battle with Washington continues.
But the US is snubbing the expo and European countries are generally sending lowerlevel ministers, with diplomats expressing scepticism over Beijing’s commitment to easing barriers to trade and complaining about the event’s confusing organization.
“They could take the opportunity to make some real announcements on opening up and reform without making it look like they are responding to US pressure. That’s what a lot of countries have been pushing for,” said one European diplomat.
Mr. Xi is expected to use a speech on Monday to continue an effort begun at Davos last year to portray China as a guardian of the international trading order. Analysts say he is likely to highlight that China’s imports have grown at an average annual rate of 9 percent over the past decade — outpacing export growth — and reached $2.1 trillion last year.
China ran a historic deficit with the rest of the world in its current account — a broad measure of goods and service trade — in the first quarter of this year, a trend economists said would become more common as imports of industrial goods such as computer chips increase and more Chinese travel overseas.
Foreign companies and governments are hoping Mr. Xi will announce cuts to tariffs, which are on average higher than developed countries though below those of developing countries, and reforms to a range of nontariff barriers to trade.
“China will want to demonstrate at CIIE that it is a global importing nation and not just an exporter. That’s all well and good,” said Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai. “Equally important will be for President Xi Jinping to use his opening-day remarks to announce market opening breakthroughs.”
Topping the list of gripes is Beijing’s “Made in China 2025” plan, under which officials plan to increase the market share of domestically made goods in high-tech industries from medical devices to robotics, and Beijing’s favoring of domestic companies in government procurement.
Foreign governments have also been worried by Beijing’s use of its consumer market as a diplomatic weapon, cutting off flows of goods imports and outflows of tourists, such as during a spat with Seoul last year that saw trade drop dramatically.
Washington has said it will not send a delegation to the event. “We encourage China to level the playing field for US goods and services China needs to make the necessary reforms to end its unfair trade practices,” said an embassy spokesman.
The presidents of the Czech Republic and Switzerland will attend alongside Pakistan’s Prime Minister, Imran Khan, and Hungary’s Prime Minister, Viktor Orban. Other senior leaders are mostly drawn from developing countries that are part of China’s Belt and Road Initiative.
Liam Fox, Britain’s trade secretary, will attend, while France will send Didier Guillaume, its agriculture minister, and Germany will send Christian Hirte, a trade official.
European countries are seeking further relaxation of requirements to enter into joint ventures with Chinese groups and pressure to transfer technology, after Beijing loosened restrictions in the automotive and financial sectors over the past year.
Some 3,000 companies from 130 different countries including General Motors, Microsoft, Walmart, Tesla, Facebook and Google will tout their wares on the expo’s 270,000 square meter site. But many multinationals are sending low-level executives.
Some companies have been deterred by an asking price of Rmb20,000 ($2,900) for a ticket to watch Mr. Xi’s opening speech, and nearly Rmb16,000 to attend sessions of a business forum to be held alongside the event. The latter will be attended by Chinese officials and will feature panels with Bill Gates and Alibaba founder Jack Ma but will offer little guarantee of access to high-level officials.
The event also clashes with a Bloomberg forum in Singapore that will be attended by the chief executives of companies including Microsoft, Hyundai and SoftBank. That forum was originally planned for Beijing but was moved because of trade tensions.
Setting up display booths at the Shanghai event has been challenging, with exhibitors facing obstacles in gaining access to the expo site. Shanghai official asked exhibitors to set up their displays days in advance for security reasons, significantly adding to the expense.
Security has been tightened in Shanghai and local companies have been ordered to give staff three day vacation for the event, while hotels have been ordered to carry out renovations costing up to $2 million.
Beijing has pressured companies to announce large purchase orders from foreign groups as a “political task,” according to official websites, with a group
of Shanghai companies vowing Rmb4bn in deals, and the eastern city of Jinhua promising orders worth Rmb1 billion.
But executives say that trade events are increasingly irrelevant to multinationals.
“Its kind of old fashioned to have a big sales fair. Companies are doing business every day in China,” said James McGregor, China chairman of consultancy APCO Worldwide. “The real issue is not selling imports into China, it’s market access. China knows that’s the real core contradiction in this trade battle.” — Additional reporting by Wang
Xueqiao and Lucy Hornby