China wrapped up its second International Import Expo on Sunday a six-day trade show in Shanghai, which has attracted the participation of more than 3,800 companies from 180 countries.
While acknowledging Beijing’s efforts to open up its vast market, exhibitors expressed mixed views toward whether the import-themed national-level expo lived up to their expectations.
And it remains to be seen if the Chinese authorities’ top-down approach to opening-up its market and its reform initiatives can be fully implemented at local levels, observers say
“Local authorities still keep strongly protectionist policies, which are opaque and have posed a worse trade barrier than tariffs. This is a big problem. It will be a huge and questionable task if local governments will fully execute the top leadership’s [open-up] policy,” said Liu Meng-chun, director of the Chung-Hua Institution of Economic Research’s mainland China division in Taipei.
Addressing the expo’s opening ceremony last Tuesday, Chinese President Xi Jinping pledged to further open up the Chinese market and urged global leaders to join hands in resisting protectionism.
“We need to strengthen the mechanisms for sharing benefits globally, and explore new ways of international cooperation. The goal is to give more impetus to economic globalization and remove impediments as much as we could,” Xi said.
Such an expo, however, isn’t enough for China to address its trade imbalance with individual foreign countries or showcase its determination to remove market access barriers, both direct and indirect, facing foreign companies, said Carlo Diego D’Andrea, chairman of the European Union Chamber of Commerce in Shanghai.
“In order to truly encourage more investment for European companies, China will need to follow through on the reform of state-owned enterprises, enacting the principle of competitive neutrality, which means no differences in treatment between government- and private-owned companies,” D’Andrea told VOA.
“And this is one of the reasons why there is the trade friction between the U.S. and China,” he added.
Indirect access barriers
D’Andrea said that 30 percent of his chamber members face indirect market access barriers in China.
For example, legal firms are allowed to operate in China, but restricted to give advice on Chinese laws or to Chinese architecture firms.
And the central government’s procurement regulation looks fair for medical device providers to compete, but local governments’ quota limitations in favor of Chinese products put foreign competitors at a disadvantage, D’Andrea added.
The chamber’s survey on its members which attended last year’s expo showed that only half of them closed deals but most of those deals went unfulfilled with one company saying that its deal existed only as a “symbolic agreement.”
Although 70 percent of respondents were overall satisfied with last year’s expo, those who were not expressed disappointment in things such as meeting bad contacts, feeling “cheated in different ways” and lamenting that the expo was meant more for Chinese public relations than business development. A costly investment of more than $28,000 to enter last year’s expo was another source of dissatisfaction.
The chamber, however, lauded China’s inking of a bilateral agreement with the EU on Wednesday on geographic indications (GIs) to deepen mutual cooperation.
GI is a sign used on products to prevent counterfeiting and enable consumers of both countries to use authentic high-quality products.
European businesses appear to be a bigger winner at this year’s expo after France walked away with contracts totaling $15 billion in the fields of aeronautics, energy and agriculture during President Emmanuel Macro’s three-day visit in Shanghai.
Twenty French companies are further allowed to export poultry, beef and pork to China.
Despite tariff hikes have hurt the pricing of American imports, nearly 200 American companies showed up at this year’s expo.
Some voiced concern about business prospects shall the U.S.-China trade war drag on while others said that American companies are not yet being stigmatized.
“They’re not going to Philips just because we’re an American company and Philips is a European company. There continues to be a lot of interest,” Steven Lien of Honeywell International Inc. told Reuters on Thursday.
“We quite want to separate politics and business. Our product is very helpful and useful, so we want people to focus on products,” Twiggy Zhao of the California-based lubricants maker WD-40 Co. also told the Reuters, sharing her worries about trade war fallout.
However, Inos Lin, executive vice president of TCI a contract maker of private-label dietary supplements from Taiwan finds its first-ever participation at this year’s expo rewarding.
“We’ve met non-corporate clients including state-run or state-owned enterprises, which we normally have no chance of reaching out to. They came to explore products from around the world, which may meet their local needs or present business opportunities,” Lin told VOA.
The event is also a great platform for TCI to gain a better understanding of local consumers and promote the latest trends of needs to nutricyclicals, he said, expressing confidence in finalizing potential deals struck in the past week.
As of Sunday, TCI has reached nearly ten letters of intent at the expo.