China has been the world’s biggest exporter for nearly a decade, but President Xi Jinping wants to rebrand the country as an importer amid criticism that its markets put foreign businesses at a disadvantage.
On Monday, Xi delivered a keynote address to kick off a weeklong import expo in Shanghai.
“China is the world’s second-largest economy,” he said. “We have a market of more than 1.3 billion consumers.”
He called the expo “a concrete action by China to advance an open world economy and support economic globalization.”
China’s government has been trying to create buzz around the event for months. In July, officials held an event to unveil the trade fair’s mascot — a skipping cartoon panda holding a four-leaf clover.
In the runup to the event, authorities have stepped up security in the Chinese city, banned people from flying drones, implemented traffic restrictions and shut down schools and government offices — measures typically associated with world events like the Olympic Games or G-20 meetings.
Xi wants the event to show the world that China is getting more serious about imports.
According to China’s Ministry of Commerce, the country’s total exports were worth $2.3 trillion last year, while it imported only $1.8 trillion worth of goods and services.
“In the coming 15 years, China’s imports of goods and services are expected to exceed $30 trillion and $10 trillion respectively,” Xi said.
Historically, Chinese firms have mainly imported industrial machinery, transportation equipment and oil — the things the country needed so it could manufacture for the world. That helped make China’s consumers richer, and now the government wants them to be able to spend what they’ve earned on goods from abroad.
More imports would also help China’s balance of trade.
“I think China is interested in showing the world that it is already beginning to shift away or lower its significant trade surpluses,” said Jake Parker of the U.S.-China Business Council in Beijing.
Parcels delivered to Shanghai bear additional security clearance stamps ahead of the import expo.
Some 3,000 firms and dozens of official delegations from around the world — including Britain’s Prince Andrew, El Salvador’s President Salvador Sanchez Ceren and Russian Prime Minister Dmitry Medvedev — are attending China’s import expo.
The U.S. government has not sent an official delegation, and only 180 American firms are at the fair, about 6 percent of the total. They include Google, Ford and a gourmet hot dog maker.
Small firms are particularly enthusiastic about attending.
“These are companies that maybe haven’t penetrated China that much, and for them it is more of a genuine business opportunity,” said Kenneth Jarrett of the American Chamber of Commerce in Shanghai. But he said it’s harder for smaller companies to get into the expo because China’s government prefers big firms as participants.
“[Big companies are] taken as a sign of success or reaffirmation of the importance of the show,” Jarrett said.
In the statement announcing that the United States will not send a high-level delegation to the expo, an embassy spokesperson added that the Chinese government should level the playing field for U.S. goods and services.
“China needs to make the necessary reforms to end its unfair trade practices that are harming the world economy,” the statement read.
In his opening speech, Xi promised to broaden market access, including in currently restricted sectors such as education and medical services. He did not provide details or a timeline.
A residential community group shows its support for the import expo by drawing the fair’s mascot on a welcome banner.
“The business community has frankly suffered a bit of promise fatigue of late,” said Parker of the U.S.-China Business Council.
The financial services sector has been a sticking point. Chinese officials announced last November that the country will lift joint-venture requirements in the sector over a five-year period.
“These announcements are very positive [but] that process has been pretty much slower than many anticipated,” Parker said. “There’s not a single U.S. credit rating agency that is licensed to rate domestic bonds in China,” he said. “There is not a single bank card clearing institution company that’s processing domestic [yuan] transactions with a U.S. credit card.”
Parker said American businesses want tangible, measurable outcomes.
But China doesn’t operate that way, according to Peter Alexander, who has lived in China for more than two decades and heads Z-Ben Advisors.
“China is not a light switch when they look at reforms,” he said. “It’s not one day you can’t, the next day you can. It’s a little bit of red tape loosened here, new programs introduced there.”
Alexander said the import expo is largely symbolic. But in China, he said, symbolism matters.