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Shanghai Trade Fair: “The Smoke and Mirrors” Critique



Every year, the China International Import Expo (CIIE) is held with the dual objectives of addressing criticism of China's trade surplus with numerous international partners and advancing China's reputation for free trade. It has, nevertheless, not been without criticism; the European Union Chamber of Commerce recently called it "largely smoke and mirrors."


Several urgent issues are raised by the European Union Chamber of Commerce's criticism of the CIIE, which it describes as "largely smoke and mirrors". The vice president of the chamber, Carlo D'Andrea, claims that while the goal of the CIIE was to demonstrate China's openness and reform, the outcomes did not live up to the initial expectations. One of the main points brought up is that, in spite of the CIIE's goals of increasing worldwide imports, China's trade surplus with Europe has grown dramatically over the last five years.


D'Andrea worries that the occasion now focuses more on making grand gestures than on producing noticeable outcomes. European companies who are keen to do business in China have become discouraged when they see symbolic acts trumping substantive measures that would instill trust in the industry. This gap must be closed in order for the CIIE to develop into a more significant hub for collaboration and trade.


A survey carried out by the European Union Chamber of Commerce among its members indicated a decrease in CIIE participation rates. With 116 members responding to this survey, the percentage of participants has decreased from 42% to 32% since the first CIIE. There are several causes for this decrease.


The main excuses given by numerous companies that had attended the event in the past for not going this year were the limited legislative changes and the declining value of their investments. It is apparent that companies are looking for more specific actions and advantageous circumstances in order to interact with the Chinese market.


The declining rate of corporate transaction closing at the CIIE is another noteworthy finding from the chamber survey. Only 25% of attendees in the subsequent years made successful sales at the event, a sharp decline from the 50% of participants in 2018. Even though 59% of participants said they benefited from government involvement at the event, it's alarming that contract closing rates are dropping.


The call to action from the European business community is very clear: the CIIE needs to "move away from the politicization" and concentrate on real-world economic effects. This implies that specific legislative initiatives that allow foreign companies to access the Chinese market should be given top priority at the event. The CIIE has to evolve from a showpiece promoting China's openness to a useful platform for international trade.

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