Import extravaganza highlights China’s promise and challenges

Visitors crowd into the China International Import Expo. (Getty Images)
Updated 08 November 2018
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Import extravaganza highlights China’s promise and challenges

  • Beijing plans China-centered world trading networks
  • Critics say foreign firms squeezed out of technology

SHANGHAI: Visitors to a vast trade fair meant to rebrand China as a welcoming import market could sip Moroccan wine, ogle Italian yachts and watch a Japanese industrial robot play ping-pong.
The communist government’s marketing extravaganza involving 3,600 companies from 152 countries showcases the promise and challenges of China’s growing, state-dominated and intensely competitive markets.
At a stand for German robot maker Jungheinrich, spectators watched a bright yellow automated forklift shift bulky cartons. A manager, Christian Wurzinger, said China accounts for one-third of its global sales but the Hamburg company wants to expand beyond factories and logistics into health and other industries.
The expo gives “very good access to Chinese companies, especially outside big cities,” said Wurzinger. “We are lucky to be here.”
Still, he said Jungheinrich already faces Chinese competition: “There are plenty of local Chinese manufacturers with pretty good technology, to be honest.”
The China International Import Expo is part of efforts to develop China-centered world trading networks while resisting pressure to roll back industry plans that Washington, Europe, Japan and other governments say violate its market-opening obligations.
China already is the No. 1 market for most of its Asian neighbors. But a big share of those imports is iron ore, computer chips and other materials that are turned into smartphones, toys and other goods for export.
That is changing as communist leaders promote consumer spending as part of efforts to develop self-sustaining economic growth and reduce reliance on trade and investment. That holds out the promise of a market of 1.4 billion consumers, even if incomes are a fraction of those in developed countries.
On the expo’s opening day, President Xi Jinping promised Monday to boost imports, cut costs for importers, protect patents and improve consumer spending power. But he did not address US and European complaints about technology policy that prompted President Donald Trump to impose penalty tariffs of up to 25 percent on $250 billion of Chinese goods.
Importers into China must contend with a thicket of restrictions and, in autos and other industries, pressure to help develop potential Chinese competitors as the price of market access.
Tarvand Saffron, an Iranian exporter of saffron, was invited to the expo by a Chinese state-owned company. But export manager Amir Reza Jalalian said food regulations bar sales of its product in China.
“Maybe in the future we can import saffron,” Jalalian said, as visitors crowded around the company’s stand to smell the crimson spice.
Business groups complain that while Beijing increases imports to serve its factories and consumers, foreign companies are being squeezed out of technology and other promising industries.
Exhibitors at the expo ranged from General Motors and Lego toys to Brazilian shoemakers, a Korean dumpling brand and Uganda’s National Enterprise Corp., an exporter of coffee and honey.
Visitors crowded around a stand for Japan’s Omron Corp. to watch an industrial robot hit a ping-pong ball back and forth with a human opponent.
Global auto, aerospace and technology brands already are well known in China, suggesting many were at the expo not to sell but to nurture relations with the Communist Party by showing support for Xi’s trade initiative.
“For the bulk of China’s imports, these expos don’t make much difference,” said Gareth Leather of Capital Economics. “For companies from smaller, developing countries, probably at the margins they do make a bit of a difference.”
At a stand promoting Polish poultry, visitors lined up for bowls of chicken in cream sauce made by cooks led by celebrity chef Artur Moroz.
Nearby, visitors sipped red and white wines from La Ferme Rouge, a winery in Morocco in North Africa. It produces exclusive batches under the labels of luxury hotels in Morocco and wants to market that service to high-end Chinese hotels and restaurants.
“It’s a big opportunity for us to enter this part of the market,” said Rita Sourelah, a manager.
The expo also highlighted the blurring of lines as Chinese companies acquire US and European brands and technology to sell at home.
Weichai Group, a Chinese shipbuilder, displayed a luxury cabin cruiser made by Italy’s Ferretti, in which Weichai bought a 75 percent stake in 2012.
Other hybrid importers included Sweden’s Volvo Cars, a unit of Chinese automaker Geely Holding; General Electric Appliances, acquired by China’s Haier Group in 2016, and California-based solar supplier MiaSole, part of Beijing-based Hanergy Group.


INTERVIEW: Saadia Zahidi — A woman’s voice amid the macho power players at Davos

Updated 21 January 2019
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INTERVIEW: Saadia Zahidi — A woman’s voice amid the macho power players at Davos

  • Saadia Zahidi, 38-years-old, is a member of the WEF’s managing board
  • She agrees that the WEF has a challenge on the low level of female participation at Davos

DAVOS: The annual meeting of the World Economic Forum (WEF), which kicks off tomorrow in the Swiss resort of Davos, is predominantly a late-middle-aged male affair. About 78 percent of the attendees in 2019 are men, with an average age of 54.
Saadia Zahidi is a breath of Alpine fresh air in this clubby world of macho power players. The 38-year-old member of the WEF’s managing board, and head of its Center for the New Economy and Society, is a rising star at the forum, and a key shaper of its thinking on social, gender and employment issues.
She agrees that the WEF has a challenge on the low level of female participation at Davos. But she believes that only reflects the wider world, where despite years of recognizing the need for gender equality in politics, business and society at large, women are still a minority when it comes to the commanding heights of the policymaking process.
“There’s a long way to go to get to 50/50 participation at Davos, but that reflects a global problem, reflecting the practices of global leadership,” she said. Only single-digit percentage proportions of the leaders of the world’s biggest corporations are female, while only a slightly bigger number of heads of state are women, she said, adding: “We have quite a way to go.”
As she recognizes, it is not just a WEF problem. Last year, she published a seminal work on gender equality as it especially related to the Middle East and the wider Muslim world. It is entitled “Fifty Million Rising,” a reference to the number of women that have joined the workforce in Islamic economies.
The work was optimistic in tone, charting the progress of women as more equal participants in their economies, be they McDonald’s workers in Pakistan, IT technicians in Egypt, or running big conglomerates in Saudi Arabia. The underlying message was that the empowerment of women was inexorable.
By the end of last year, Zahidi seemed to have lost some of that positivity. A report authored by her for the WEF on the gender gap — the difference in pay and conditions for men and women doing more or less the same job — found that on average, female workers were paid just 63 percent of men’s wages for the same job.

The overall picture is that gender equality has stalled. The future of our labor market may not be as equal as the trajectory we thought we were on.

At current rates of progress, it would take 202 years to close that gap, leading her to conclude: “The overall picture is that gender equality has stalled. The future of our labor market may not be as equal as the trajectory we thought we were on.”
So what has gone wrong in the movement to empower women?
Zahidi identifies two main reasons for the lack of progress. “There have been big shifts in the labor market with greater use of technology and automation, and women have borne the greater brunt associated with those changes,” she said.
“There’s a perception that blue-collar men in manufacturing are being put out of work by automation, but many women in service sectors, especially in the emerging world, are feeling the effects just as much if not more.”
More women than ever are graduating from universities, but many are not qualified in the skills required in the modern digital world, in science, technology and maths.
The second reason is that many countries and societies are still not balancing domestic roles more efficiently between men and women. “It still seems to be women who have the main responsibility for unpaid care work, be it in child care, elder care or other aspects of home life,” she said.
“So women are less present in the paid economy than they are in the unpaid economy. It’s a structural factor, but you shouldn’t really need a business case to move forward on gender equality, because there’s also a very clear moral argument to be made.”
The movement for gender equality and female empowerment has been a factor in social and economic policymaking in many Arab Gulf economies, particularly in Saudi Arabia, where it is a prominent feature of the Vision 2030 reform plan.

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BIO

Born in Lahore, Pakistan, 1980

Education

•Smith College, Massachusetts, US — economics degree

•Graduate Institute, Geneva, Switzerland — master’s in international economics

•Harvard Kennedy School — master’s in public administration

Career

•Joined WEF as economist, 2003

•Currently head of WEF’s Center for the New Economy and Society; •member of managing board

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Zahidi agrees that there has been some progress in recent decades, with greater investment in girls’ education leading to more skilled women in employment and all the social and cultural changes that brings. That advancement can also lead to “pushback” by women against some of the cultural and social restraints imposed on them by conservative societies.
“It’s not surprising now that there are more questions being asked about the viability of something like the (Saudi) guardianship laws,” she said. “Largely speaking, the guardianship laws are an additional barrier, whether it’s a question of transport, the ability to get from point A to point B. Is it a question of availability of transport, or because you don’t have the permission of one person? It’s a barrier that women will face and men won’t face.”
Although probably best known for her work at the WEF on gender and employment issues, last year her role was broadened to take responsibility for the “new economics” that the forum views as essential in the age of the Fourth Industrial Revolution — the confluence of digital, technological and communications factors that the WEF sees as having a profound effect on economic relations.
In October 2018, Zahidi led a study group at a WEF meeting in Dubai on the subject of the new economy. Those deliberations resulted in the recent publication of a WEF white paper on the subject. Her enthusiasm on the topic is obvious and infectious.
“It was an exercise in how to offer newer as well as the traditional voices on how we manage and direct our economy,” she said. She believes that modern economies, under pressure from digitalization and technological change amid volatile geo-economic conditions, have to seek answers to four big questions.
“First, do we need to fundamentally rethink what constitutes economic value, and what practical avenues exist for doing so?” she asked. She believes that new types of assets and economic activity are not well understood, and that new sources of consumer welfare are not adequately measured.
“What’s the value of the open knowledge on Wikipedia, or the toll taken by the incursion of digital technology into our private lives?” she asked. The answers will have fundamental repercussions for traditional methods of valuing economic activity, such as gross domestic product (GDP) and the price mechanism, she believes.
Second, Zahidi posed the question of whether, in the age of Big Data, we need to address the issue of the market concentration created by online platforms. Digital platforms bring undoubted benefits in terms of new services, greater choice, faster access and lower costs.

 

There’s a long way to go to get to 50/50 participation or men and women at Davos, but that reflects a global problem.

“Yet at the same time, scale and the resulting concentration of market power can offset some of these benefits, with potential repercussions on innovation, quality and distributional outcomes,” she said, adding that we need to think again about the regulatory regimes that govern the digital economy.
Third, the new economics must consider whether policymakers need to put in place practical measures for job creation. Technology and automation are forcing major transformations on employment practices. “If managed wisely, these transformations could lead to a new age of good work, good jobs and improved quality of life for all. If managed poorly, they pose the risk of greater inequality and broader polarization,” she wrote in the white paper.
Finally, the new economics must consider the need for new social “safety nets” for those who get left behind by the rapidly changing digital transformation. “In developed economies, the efficacy of social insurance policies tied to formal work and stable employment contracts is depleting, as increasing numbers of people become displaced or experience insecure work, low pay and unequal access to good jobs,” she said.
“In developing economies, where work has largely been diverse and informal, technological advances look set to continue that trend and offer additional flexible work opportunities, leaving open the question of what a future social protection model might look like.”
These issues will be among the questions considered at Davos 2019. Despite the withdrawal from the annual meeting of some prominent regular attendees — most of the US government sector, for example — Zahidi is confident that it will be another success. “My main aim this year is to raise and discuss issues that are starting to pose challenges, and to build coalitions to tackle them,” she said.