BusinessMedia releaseFirst China International Import Expo opens China’s domestic economy to the world

Mon,19Nov2018

Posted on Friday, 09 November 2018 16:04

First China International Import Expo opens China’s domestic economy to the world

Standard bankVinod Madhavan, Manessah Alagbaoso and George Lo thoughts ahead of the first China International Import Expo, Shanghai, 5 November 2018 (29 October 2018)

First China International Import Expo opens China’s domestic economy to the world
Historic opportunity for African export-led growth

Vinod Madhavan - Standard BankThe inaugural China International Import Expo (CIIE) taking place in a purpose-built convention center in Shanghai, the largest single block building in the world, is a clear and unequivocal statement of China’s intent to re-calibrate its current global trade relations.

More than just countering perceptions, however, “the CIIE represents the practical expression of a Chinese policy - designed to deploy the country’s approximately US$ 3.23 trillion in foreign reserves in support of domestic consumption-led growth,” says Vinod Madhavan, Head of Trade at Standard Bank.

As early as May 2017 Chinese President Xi Jinping announced that China would host an annual international import expo, starting in 2018. The initiative would focus on liberalising Chinese trade by actively opening China’s economy to the world, strengthening global economic and trade cooperation. The expo would be aimed at promoting global trade and growth by advancing the development of an open world economy.

“This shift to consumption-led growth in China, especially the opening up of its domestic economy to global imports, comes at a particularly opportune time for Africa,” says Mr. Madhavan. 

As global trade wars and higher developed-world interest rates spur emerging market volatility generally - and sovereign debt pressures in Africa specifically - China’s re-orientation of its domestic economy represents a profound opportunity for African countries and businesses to build globally-integrated export-led growth and development strategies,” explains Mr. Madhavan.

The total exhibition area of the CIIE exceeds 240 000 square meters with a dedicated rail link to Shanghai’s Hongqiao airport and central railway station. This deliberately provides direct access to Chinese businesses in all the major cities in the Yangtze river delta, China’s industrial and commercial heartland. China’s Ministry of Commerce, the co-sponsor and organiser of the event along with the Shanghai Municipal Government, expect that 150 000 Chinese importers will attend the CIIE in 2018 alone.

Since the Chinese government at the national, provincial and sector levels is driving the initiative to reinvigorate domestic growth through a new import orientation, “many of the importers attending will arrive with specific, government directed, orders to fill,” says Mr. Madhavan. It is planned that the CIIE, which also enjoys the support of the World Trade Organisation, the United Nations Conference on Trade and Development and the United Nations Industrial Development Organisation, will become an annual event in the city for at least the next ten years.

At the geopolitical level, the CIIE couldn’t come at a better time in terms of re-focusing global attention on the enduring importance of multilateral cooperation. This is especially so for, “Africa’s smaller developing and emerging economies that absolutely rely on an open, inclusive and rules-based global system for the growth and development of their economies and peoples,” says Mr. Madhavan.

In recognition of China’s serious and profound intent to open its economy to global imports, Standard Bank, Africa’s biggest lender and operator of the Africa-China trade corridor, is taking 61 clients from nine African markets to the inaugural CIIE in November 2018. The Standard Bank African export delegation will be led by Dr. Manessah Alagbaoso, Standard Bank’s Head of Africa-China Banking Integration. Since larger African businesses and corporates are likely to attend independently, “we are focusing specifically on smaller businesses as the scope for growth that an opportunity of this stature presents is so much larger for our smaller clients,” says Mr. Madhavan.

Exposing Standard Bank’s African clients to up to 150 000 Chinese importers presents African businesses and their governments, “the biggest opportunity yet to grow the scale, reach, sophistication and inward integration of African businesses and economies through export-led growth,” says Mr. Madhavan.

The 2018 expo which specifically does not focus on raw commodity imports, targets trade in beneficiated and manufactured goods as well as trade in services.

The trade in goods section of the 2018 CIIE, for example, includes; high-end intelligent equipment, consumer electronics and appliances, automobile, apparel, accessories and consumer goods, food and agricultural products, medical equipment and medical care products. The section on trade in services covers; tourism, emerging technologies, culture and education, creative design and service outsourcing.

“China’s clear focus on moving away from the exclusive import of African commodities, to the import of more beneficiated and industrialised goods and services matches exactly Africa’s current internal development and growth trajectories,” observes Mr. Madhavan.

China’s broader financial services universe will also be on show at the CIIE. As such, the CIIE provides Standard Bank an ideal platform to, “demonstrate how our strategic partnership with the Industrial and Commercial Bank of China enables Standard Bank to connect African corporates to China’s broader banking industry, including the Bank of China and China Construction Bank,” says Mr. Madhavan. Access to China’s broader banking network, “will support the new trade, investment and business development.opportunities that this strategic trade initiative is set to unlock between Africa and China,” he adds.

 

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