BEIJING -- The expanding U.S.-China rivalry in the world of technology is set to be put on full display this week, with a smaller Chinese presence expected in Las Vegas for CES, the world's biggest consumer-electronics exhibition.

Chinese exhibit space at the annual show is projected to be down 5% to 6% compared with last year, event organizers said. The event on Jan. 7 to Jan. 10 could also see a downtick in overall Chinese exhibitors, since 1,120 attended last year, but only 1,097 Chinese companies were listed on the 2020 directory as of Saturday.

One of those companies listed on the directory said it wouldn't show up. A spokesman for Suning, a major Chinese electronics and appliance retailer akin to Best Buy Co., said neither its Chinese nor its U.S. team would attend, even if it had already booked the space. Suning last year had a big booth that showcased shopping technology. The spokesman declined to elaborate on why the company is skipping the event.

The drop-off in Chinese participation at CES is a reversal from years past. In 2018, the exhibition had 15,383 attendees from China, the country's highest reported attendance ever. At the time, some attendees jokingly referred to CES, formerly known as the Consumer Electronics Show, as the "Chinese Electronics Show." But attendance from China dropped to 12,839 in 2019, according to the official show audit.

The organizer of CES, the Consumer Technology Association, declined to make executives available for an interview. It said that all major Chinese exhibitors from 2019 were returning this year, and that the only notable area of decline in Chinese attendance was for the show's Design and Source exhibition, which focuses on designing, supplying and packaging.

"A trade war is bad for both countries," the trade group said. "CTA continues to work with Congress and the administration to reach an agreement with China that eliminates tariffs and addresses China's trading practices."

China's more muted presence in Las Vegas is the latest sign that the world's two largest economies are increasingly going their own way, particularly in the technology realm.

The U.S. has stepped up its scrutiny of China in many ways, slowing the approval process for American semiconductor companies looking to hire Chinese nationals as engineers and raising warnings about Bytedance Inc., the Chinese company behind the hit video-sharing app TikTok, citing national-security concerns.

China, meantime, has decried U.S. attempts to restrict its companies from operating world-wide, even as it accelerates efforts to replace foreign technology products with ones made domestically.

Last year, Huawei Technologies Co. built a smartphone entirely without U.S. chips after Washington stepped up a campaign to restrict American suppliers from selling it parts.

Both U.S. and Chinese businesses have been reluctant to speak publicly about the bilateral tensions, fearing a backlash from governments, business partners and customers. But privately, some Chinese companies said the heightened geopolitical tensions had contributed to their decision to skip CES, which can cost hundreds of thousands of dollars in fees and travel expenses.

Many Chinese companies will continue to appear at CES, including electronics and appliance brands TCL and Hisense, as well as Huawei, the giant maker of cellular-tower equipment and smartphones that has become a bone of contention between Washington and Beijing.

The U.S. has launched a global campaign to block Huawei from winning contracts world-wide, particularly in allied countries, claiming that Beijing could order Huawei to spy or conduct cyberattacks. Huawei denies the allegations and says it operates independently of the Chinese government.

Huawei's smartphones and other electronic devices are effectively barred from the U.S. Under political pressure, major wireless carriers and major retailers, such as Best Buy, don't sell Huawei devices.

Two years ago at CES, Huawei was abandoned by AT&T Inc. after the carrier reneged on a deal to sell Huawei phones just days before the exhibition was to begin.

Despite the cold shoulder from the U.S., a Huawei spokesman said the company would use the exhibition to showcase its consumer products to a global audience.

"CES is a global technology show and Huawei, as a global technology leader, will use the opportunity to present its flagship consumer products, including smartphones, tablets and laptops, to the global marketplace," he said.

Shenzhen Augmented Reality Technologies Co. Ltd., a Chinese maker of augmented-reality glasses, is spending nearly $160,000 to send 12 of its 60 employees to Las Vegas to operate a 1,000 square-foot booth. The company's chief executive, Su Bo, said the U.S.-China battle doesn't affect his business.

"Because we are going to launch our products in overseas markets this year, mainly in Europe, the U.S., Japan and South Korea, [attending CES] builds up our international brand image," Mr. Su said. "We are not going to sell products at the CES, but hope to connect with more overseas dealers and agencies."

But Mr. Su added that he knows of a Chinese friend who is skipping this year's show as a result of the elevated tensions.

Raffaele Huang and Stu Woo contributed to this article.

(END) Dow Jones Newswires

January 05, 2020 10:14 ET (15:14 GMT)

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