Standing just metres from a stand promoting American soyabeans exports, Nicholas Burns, US ambassador to China, was eager to emphasise his country’s contribution to one of the world’s biggest trade fairs.
“We have the largest number of businesses and exhibitors this year — that’s more than any other country,” Burns told an enthusiastic scrum of reporters at the China International Import Expo in Shanghai this week.
The US delegation, he added, was there “to show our commitment to the overall relationship between the United States and China”.
The crowded scene contrasted sharply with last year’s sparsely attended event, which took place during the final full month of China’s three-year zero-Covid policy. It also hinted at the prospect of increased Chinese collaboration with US and other foreign companies, despite geopolitical tensions and a weaker-than-hoped post-pandemic recovery.
For thousands of global businesses that have felt the chill of those tensions, the Shanghai expo was an opportunity to reiterate their commitment to a market that continues to grow.
“Right now we are only targeting ‘tier one’ cities because they have higher consumption,” said Nie Dan, a marketing representative of Irish-US group Dole Food. “But our plan next is to expand to lower tier cities.”
This year’s CIIE, an annual event launched in 2018 by Chinese president Xi Jinping, included more than half of the world’s Fortune 500 companies and more than 3,000 businesses in total, each with stalls and exhibits across a vast concrete structure on the outskirts of China’s biggest city.
At a time when companies are weighing up their comments on China carefully, pre-arranged interviews with business leaders played on screens in the expo media centre. Jerry Zhang, chief executive of Standard Chartered China, said her bank was “linking China with the global market”, while Titus von dem Bongart of EY hailed CIIE as a major event for foreign businesses.
Smaller companies, many with stalls crowded with Chinese business people, were also keen to take advantage of post-pandemic opening.
“In Shanghai it’s our first time because before it was Covid,” said Alexandre Ebralidze, who was representing a Georgian wine business. “It’s a huge market,” he added. “We are trying to develop step by step.”
Pickering, an electronics group headquartered in the English town of Clacton-on-Sea, also attended for the first time. “I wasn’t really too sure how many individuals would be interested to come and talk to us,” said head of marketing Joe Woodford, adding the footfall exceeded his expectations, with hundreds of visitors to the stand.
Woodford said the group stood to benefit from rapid industrial evolution in the country. “As China accelerates its manufacturing and its manufacturing costs go up, they’re obviously going to have to do more automation, and that gives us as a company an opportunity to grow into that sector.”
Others cited the lure of Chinese overseas investment. “I believe there are opportunities for Chinese foreign direct investment into Greece, and that’s why I’m here,” said Christos Vlachos, a Greek financier involved in cross-border finance with China since 2007. He cited the example of Yutong, a vehicle producer that in July won a tender for 250 electric buses in Athens.
Greek prime minister Kyriakos Mitsotakis visited Beijing and met Xi days before the CIIE event, which Vlachos said indicated his country would not “shy away” from China despite a sense of pressure from the US.
At a central and local government level, China has sought to encourage foreign businesses to return to the mainland this year but foreign direct investment has slumped and data suggest overseas companies have been repatriating earnings. Cross-border financial activity has also fallen dramatically.
China’s economy has struggled to rebound from the pandemic amid a property sector slowdown, but the IMF on Tuesday raised its forecast for growth in 2023 from 5 per cent to 5.4 per cent.
Washington has in recent months sent a string of high-profile officials to the country, including secretary of state Antony Blinken and Treasury secretary Janet Yellen.
“We do not seek to decouple the economic relationship between us,” said Burns, who noted two-way trade in goods between the US and China was last year the highest level on record at $690bn, and that Washington’s policy was instead to “de-risk”.
But the US and EU continue to complain about what they say is the lack of a level playing field for foreign companies in China.
Ahead of the Shanghai expo’s opening, Carlo D’Andrea, head of the Shanghai European chamber of commerce, said the event had been intended as a showcase of Chinese opening and reform but had “proven to be largely smoke and mirrors”.
“European businesses are becoming disillusioned as symbolic gestures take the place of tangible results needed to restore business confidence,” said D’Andrea.
But Christoph Wild, deputy chief executive of a Swiss toothpaste manufacturer that entered China 10 years ago, said he had returned for the first time since before the pandemic to in effect “celebrate” the success of his local partnership.
“Learning what it means to be agile in China, and agile as somebody who produces for China, with all the ups and downs in the market, was key for the success,” he added. “You cannot learn this on video media conferences 9,000km away back in Switzerland.”
Still, this year’s expo suggested the trend towards greater localisation of overseas companies in China, a shift accelerated by the pandemic, was continuing. At the stands of some larger companies there were few or no foreign representatives.
Vlachos, the Greek financier, said he found a palpable lack of foreigners when he visited Beijing. “It’s still not the Shanghai or Beijing we used to know . . . but now at least it’s easier to get visas,” he said.
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