By James T. Areddy
SHANGHAI--Facing U.S. trade sanctions, the world's largest
exporting nation, China, is cultivating a new image--as an
importer.
A pivot point for the makeover is November's China International
Import Expo, a trade-show brainchild of President Xi Jinping, who
has pledged to rebalance the Chinese economy and "chart the right
course for economic globalization."
The weeklong event in Shanghai was a quick sellout, with 2,800
foreign companies from 130 countries renting exhibit
space--including Alphabet Inc.'s Google, Boeing Co., Caterpillar
Inc., Facebook Inc., General Motors Co., Honeywell International
Inc., Tesla Inc. and Qualcomm Inc.--as China promises 160,000
domestic buyers and a convoy of Chinese officials.
The corporate interest reflects China's vast buying power, from
advanced industrial-production systems to consumer goods like food
and, increasingly, services. Some economists inside and outside
China predict its appetite could soon jolt the world as much as its
vast factory output has in recent years.
For now, touting China's role as an importer comes down to
geopolitical necessity for President Xi in the face of an
unprecedented pushback against his government's global
ambitions.
China runs a merchandise trade surplus with at least 96
countries, according to an Organization for Economic Cooperation
and Development analysis. Meanwhile, it's seen as keeping its own
markets closed to foreign businesses while Chinese companies enjoy
easy access to much of the world. The lopsided dynamic vexes
politicians globally and has spawned the backlash-- from the
tariffs President Trump has placed on $250 billion in Chinese
products to criticisms that China is stealing technology and
practicing debt-trap diplomacy with offers of big-ticket
infrastructure building to developing nations.
Beijing defended its trade policy in a mid-September rejoinder
to Trump administration action, saying in a policy paper, "It is
not China's intention to have a trade surplus." China says it is
already the world's second-biggest importer and will spend $10
trillion buying goods and services around the world over the next
five years.
China hosts some 4,000 trade shows annually like the current
Canton Fair, but President Xi's import fair is about changing
global perceptions.
"They are trying to make a visual splash to show their
sensitivities to the concerns," said Jacob Parker, a Beijing-based
vice president at the U.S.-China Business Council. Compared with
tackling structural changes like reducing Chinese government
support for local competitors, Mr. Parker said, absorbing more
imports is "one of the most easily addressed of the concerns that
the international business community has raised."
To support the import expo, government bureaus across China are
organizing Chinese companies into buying "alliances" for the show,
sometimes complete with spending targets, and promising them
subsidized travel to Shanghai, according to public notices.
Shopping for imports, according to a statement from industrial
giant China National Machinery Industry Corp., is a "political
task."
Also for months, Chinese Ministry of Commerce officials have
fanned out around the world, leaning on foreign companies,
embassies and trade groups to send senior delegations to the expo,
calling it one of the country's key diplomatic endeavors this
year.
"They moved so fast and the program was sold out so fast," says
Carlos J. Valderrama, head of the Los Angeles Area Chamber of
Commerce's international section. He says California companies see
a public-relations value in signing up to an event that China's
president considers a priority.
Despite the corporate enthusiasm to sell more in China, few
foreign governments or multinational corporations appear keen for
their most senior people to personally endorse the expo, according
to interviews and answers from a Wall Street Journal survey of
roughly 30 governments, more than a dozen multinational
corporations and several trade groups.
Uncertainty about how the events will be organized, including
China's political goals, makes it difficult for global CEOs to
attend, according to several diplomats and executives, even as some
of them are expected to be in the region around the same time.
Some said high-profile attendance could appear as favoritism to
Mr. Xi's trade agenda, at a time when he is sparring with Mr.
Trump. Others say access to China's top politicians is unclear. Two
people organizing corporate participation said they have been
quoted a fee around $2,000 a seat to listen to President Xi's
opening remarks, amid expectations he could announce some market
liberalization measures to satisfy foreign governments.
Expo organizers say 200 of the Fortune 500 companies rented
display space in Shanghai. But of more than a dozen that responded
to questions from the Journal, only one confirmed that a C-suite
executive would go: Swiss health-care group F. Hoffmann-La Roche
Ltd.'s Chairman Christoph Franz. More than two dozen G-20 and OECD
member governments said their delegations would be led by trade or
economic envoys, including major trading partners Germany and
Brazil.
Washington hasn't decided who might attend, the U.S. embassy in
Beijing says.
One political heavyweight expected: World Trade Organization
Director-General Roberto Azevedo, according to his office. A small
number of heads of state are expected.
Under a clover-shaped, 15.8-million-square-foot venue starting
Nov. 5, the expo may resemble the global economy itself with
Italian helicopters and American soybeans, French baking yeast and
a 200-metric-ton German milling machine.
Honeywell will show wearable technology for factory workers and
software that schedules airliner maintenance. Steinway & Sons
wants to lift brand awareness for its pianos. Facebook plans to
market the commercial aspects of its social network, while Ernst
& Young will demonstrate how blockchain works.
Shanghai is rushing through a $750 million construction
spiff-up. Subways are already tricked out with visitor welcomes
from the expo mascot, and the city plans a two-day school and
office shutdown. According to official reports, the security
clampdown by law enforcement extends even to visits by families of
prisoners.
With the trade battle with the U.S. having amplified the
Shanghai import fair's political overtones, global companies are
trying to calibrate how to show support for China and their
businesses.
General Motors Chairman Mary Barra, EY Chairman Mark A.
Weinberger and the chairman of Swiss drugmaker Novartis
International AG, Joerg Reinhardt, are confirmed to attend a
closed-door meeting with Shanghai's mayor a week ahead of the trade
fair, their representatives say. None is expected to show up at
their companies' displays at the Import Expo.
Write to James T. Areddy at james.areddy@wsj.com
(END) Dow Jones Newswires
October 17, 2018 08:14 ET (12:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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