Belt and Road: Business events gear up for gravy trainBy Lauren Arena
10 Aug 2017
Chinese and Malaysian officials broke ground this week (August 9) on a US$13 billion rail project across the Straits of Malacca, which will form a major component of China’s Belt and Road Initiative.
The planned 688km East Coast Rail Link is among the most significant projects in Chinese President Xi Jinping’s quest to build a 21st century ‘Silk Road’ that will connect China with Southeast Asia, Pakistan and Central Asia via land corridors, as well as open up maritime trading routes with the Middle East and Europe.
As Xi’s ambitious Belt and Road project pushes ahead at full speed, the question begs: how will the initiative affect business events?
CEI Asia speaks exclusively to Dr Sun Weijia, director general of the Counsellors’ Office of the State Council of the People’s Republic of China, to find out.
Q. What are the key objectives of the Belt and Road Initiative?
A. The Belt and Road Initiative aims to promote international cooperation and tackle challenges facing the global economy by fostering new drivers of global growth, and making globalization more inclusive and beneficial for all. The priority of the Belt and Road Initiative is to enhance policy, infrastructure, trade, financial and people-to-people connectivity.
The exchange and mutual learning between civilizations along the ancient Silk Road is a valuable legacy. The Belt and Road is not only a trading route, but more importantly a travel route with more than 500 world cultural heritage sites in the countries along the route, and representing 70 per cent of the global touristic exchanges. Tourism embodies the essence of the Silk Road spirit, and will considerably benefit from the initiative by promoting extensive people-to-people exchange.
Forecast show that from now to 2020, 150 million Chinese tourists will visit countries along the 'Belt and Road', spending an estimated US$200 billion.
Q. How can the MICE industry benefit from the project?
A. Trade is the most important engine driving growth in MICE industry. Today China is the world’s second largest economic power, the world’s largest trading nation and the world’s largest direct investor in foreign economies. This will greatly benefit the development of the Chinese MICE industry both inbound and outbound.
Over the past four years, China has worked with other countries involved in the Belt and Road Initiative to promote trade and investment facilitation and improve business environment. As result, total trade between China and other Belt and Road countries in 2014-2016 has exceeded US$3 trillion, and China's investment in these countries has surpassed US$50 billion.
The Belt and Road will further uphold the multilateral trading regime, advance the building of free trade areas and promote liberalisation and facilitation of trade and investment. This will definitely benefit the development of the MICE industry in China as well as in countries along the Belt and Road by generating more people-to-people exchange programmes and creating more business event opportunities.
Q. What is the status of China’s inbound MICE industry?
A. China’s MICE industry continues to grow thanks to the steady growth of the national economy. Statistics show that from 2011 to 2016, the total number of exhibitions held in China increased from 7,330 to 9,892—representing a growth rate of 35 per cent. The direct revenue generated by the exhibition industry in China is estimated to exceed 500 billion CNY.
There are no official statistics on the performance of the convention and meeting industry in China, however research estimates that no less than 6.5 million conferences and meetings took place in China in 2016, generating 860 billion CNY.
China's convention and exhibition market is mainly domestic and rather concentrated in the central and eastern regions where economy are rather developed, which reflects the synergy between MICE industry expansion and sound economy development. However, China is starting to explore various international convention and exhibition markets—128 exhibitions were held abroad last year, a trend that will be intensified in the future years with further implementation of the Belt and Road Initiative.
Q. How is the government supporting development of China's MICE industry?
A. The MICE industry is considered a priority for regional development by most provinces and cities in China. It is common practice today that the government, at either provincial or municipal level, adopt and apply incentive policies to stimulate the development of the sector by attracting more MICE events to be hosted locally. These policy incentives, which apply to both Chinese and foreign event agencies, may include:
- Stimulating private sector: subsidise the promotion and marketing of the MICE products and services; subsidise the biding and hosting of international MICE event to take place in the region;
- Providing public service: create and run local convention and exhibition bureaus, to synchronise one-stop service to MICE clientele, assuring the liaison of clients with professional service providers.
Q. What advice would you give event agencies looking to break into China’s MICE industry?
A. Business opportunities are large enough for both Chinese and foreign investors, while there is no restriction on market access for foreign companies. Foreign event agencies and planners have the advantage of being familiar with international practice, and therefore have the expertise to provide world-class standards service.
However, foreign agencies have to be aware of their disadvantage, that is the lack of knowledge about Chinese culture and Chinese people. To compensate for this weakness, it would be advised that the foreign agencies take the strategy of localisation or take a local partner to succeed in cooperation.
Dr Sun will be a keynote speaker at the upcoming ICESAP Annual Conference, set to take place in Shanghai from September 6-8.