Curtain ready to rise on landmark import expo

Lot of experience

Alina Ma, associate research director in Shanghai for market research company Mintel, said that simply being foreign is no longer such an attraction to Chinese consumers.

"This may have been the case 10 years ago, but no longer. Chinese consumers have now traveled abroad and have a lot of experience. They are particularly savvy when it comes to buying online," she said.

"They like to compare and contrast product features, and they often find that Chinese products offer what they need and are also value for money."

Ma said the country's consumers are also increasingly seeking products with Chinese heritage or value.

"This applies to younger consumers as much as older ones and poses another challenge for foreign companies."

Mats Harborn, president of the European Union Chamber of Commerce in China, whose Shanghai chapter will release its position paper on the expo on Friday, said 60 percent of its members thought Chinese products were now equally or more innovative than their own.

"It is a signal I want companies to send back to their headquarters. They need to wake up and put their resources in China," he said.

According to official data, China's imports are now an important driver of the global economy, with the world's second-largest economy being also the second-largest importer of goods for nine consecutive years, making up 10.2 percent of global imports last year.

China's imports of goods in 2017 rose to $1.74 trillion, up by 16 percent on the previous year, whereas its exports rose by 11.4 percent to more than $2.21 trillion.

Louis Kuijs, head of Asia Economics for consultancy Oxford Economics in Hong Kong, said the rebalancing away from exports toward consumption and is one of the most important economic trends globally.

"Domestic demand in China continues to grow faster than in the rest of the world, which means imports are going to be increasingly pulled in by China," he said.

Despite the rhetoric coming from US President Donald Trump's administration about China's trade surplus with his country, its surplus with the rest of the world is disappearing, Kuijs said. He forecast that the current account surplus of 1.3 percent of GDP last year will fall to just 0.1 percent this year and may soon even become a deficit.

"If it happens, it will be a milestone and a lot will be written about it. China already has a deficit with some economies and countries in Asia which are part of China's Asian supply chain involving imports of large volumes of components. It also imports raw materials from countries like Australia. Increasing imports will mean that its current overall surplus will disappear."

The expo is taking place as China marks the 40th anniversary of reform and opening-up.

Leon Wang, executive vice-president, international, and China president at AstraZeneca, the UK-headquartered pharmaceuticals multinational, which is an exhibitor in Shanghai, said, "At a time when China is celebrating its 40th anniversary of reform and opening-up, it is of greater significance for the country to host this international event in Shanghai.

"It shows not only the rise of China under this policy, but also presents a national image that it is open, inclusive and reciprocal."

China is the company's biggest market after the US, and Wang said rising incomes are leading the country's middle class, in particular, to demand better healthcare.

"With higher economic growth and personal incomes, people are demanding more and better healthcare. The needs for precise, personalized and smart treatment with affordable and accessible healthcare services are increasing," he said.

"We have delved deep into the China market and increasing investment. (We are) focusing on therapy areas where Chinese patients have the most urgent demand," he said.

The expo is also likely to illustrate how imports are important in driving the country's industrial modernization and achieving goals, such as Made in China 2025, and becoming a global technology leader by 2035. It particularly wants to move ahead in advanced manufacturing, robotics and artificial intelligence.

Denis Depoux, CEO for Greater China with management consultants Roland Berger, said advancing technology is generally a collaborative effort.

"Imports make sense from a multiple standpoint, but one of the most underlying is their role in the modernization of the Chinese industrial footprint in terms of technology transfers and in other respects."

Depoux, who is also the consultancy's deputy head for Asia, said China also needs imports to fill gaps in its technology deficits, despite its overall ambitious plans.

"You can decide overnight that you want to be a producer of aircraft engines or gas turbines, but from that moment to actually achieving it could have a lead time of 20 to 30 years. In the meantime, China, like many other nations, will keep importing these high-end products."