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Commitment To Globalization And Further Opening-up
Nov 12, 2018

Of course the CIIE is a trade show, not a public expo, held in the newly completed National Exhibition and Convention Centre (Shanghai) in the Hongqiao Business District – a fitting location as it is the largest conference complex in the world. According to official figures, the pavilions hosted representatives from 172 countries, regions and international organizations with 3,600 businesses and more than 400,000 buyers. Shanghai also seems the most appropriate location as the city is known as both "the City of Experiment" and "the City of Innovation" as well the centre of China's economic powerhouse– the Yangtze River Delta Region. Shanghai has been home to China's first pilot free trade zone since 2013.

President Xi Jinping welcomed guests in a keynote speech which stressed both the importance of globalization for the growth of the world economy and China's commitment to further reform and opening-up and to welcoming more imports. Xi revealed some impressive figures – a pledge to import $30 trillion in goods, $10 trillion in services in the next 15 years. This is to be achieved by more favorable policies for foreign companies and indeed the CIIE itself will play a continuing role after being confirmed as a regular annual event. As media reported each day on the expo, it was clear that huge numbers of purchase agreements, including of high value, by State-Owned Enterprises, municipal governments and hospitals alongside private enterprises, were being inked. Despite US-China trade frictions, major American companies were among the nearly 180 from the US.

With an eye on future-focused products and technologies, eco-friendly development, AI, bio-sciences, technology-led health care and other forces that will change society, President Xi promised greater punishments for the infringement of Intellectual Property Rights and encouraged the sharing of innovation for the benefit of mankind.

It was noticeable that the distinguished foreign leaders invited to give their own welcome were mainly from countries that are participating in the Belt and Road Initiative, including Egypt, Hungary, Iran, Kenya, Pakistan, Russia and Vietnam. There is a strong connection between the investment in infrastructure, transport, communications, shipping and other technologies in the BRI member countries and the opportunity to benefit from more openness to imports by China.

An important element to be significant growth of Chinese imports will be domestic demand. Throughout the increased prosperity that has resulted in China from the 40 years of reform and opening-Up, household consumption as a percentage of income has been noticeably lower than in Western economies and other Asian countries. Realizing higher household expenditure will be a necessarily element of growth of consumer imports, including luxury brands and new technical innovations. This links well with the Chinese Dream, a concept introduced by Xi in 2013, and having as one aim the doubling of the average Chinese incomes by the end of the decade. Within this some foreign exhibitors referenced their hopes in the Chinese consumer markets from the new generations – Millennials (born from the early 1980s and hence consumers in the new millennium) and particularly generation Z (born from the mid 1990s) who are seen as more open to both spending more of their income and to new trends and fashions.

China's domestic spending power will still need to rely in part on its ability to export and maintain its role as the "world's factory" as well as moving up the value chain to higher end production and innovation to move from "Made in China to Invented in China". All this will benefit from globalization and keeping open, restriction-free multilateral trade. The opening day of the CIIE certainly reinforced this well beyond the clear message from Xi. Much support came from speeches by the leaders of the IMF, the World Bank and the WTO. Apart from the benefits of low cost imports to a country's standard of living, a significant proportion of imports are subsequently used to create the exports.

In conclusion, the CIIE was both a clear statement of China's commitment to globalization and a practical impetus to further reform, opening-up and achieving trade deals. It will be interesting to see how reforms have progressed by the time the 2019 CIIE comes around. I suspect Shanghai, a leading global city, will remain at the forefront in these developments.

Colin Speakman is at economist and director of programs in Shanghai for CAPA The Global Education Network, a US-based International Education Organization that cooperates with East China Normal University in Shanghai.