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China's exhibition industry
disappears
By Sam Ng
HONG
KONG - How serious is the impact of severe acute
respiratory syndrome (SARS) on China's exhibition
industry? So far, no comprehensive data are available.
As can be gleaned from the goings-on, or lack thereof -
at the Guangzhou Spring Trade Fair and the Shanghai
International Auto Exhibition, the damage inflicted upon
China's exhibitions has been massive.
SARS as an
epidemic spread fastest during China's busiest time for
exhibitions and meetings. Not only have exhibitors and
organizers sustained considerable economic losses, but
also many other related industries have been hit by the
domino effect of the SARS outbreak. People are already
wincing in anticipation of the release of economic data
from the second quarter of this year.
In the
wake of the disappointment experienced at the
aforementioned exhibitions in Guangzhou and Shanghai,
many other shows and conferences have been canceled or
postponed until autumn or beyond. In Beijing, the World
Economic Forum China Summit, where more than 500 senior
business executives and government officials from across
China and abroad were to gather in mid-April, was
postponed to late September or early October. In
Shanghai, during the golden period of expo of May and
June, about one or two shows daily have been deferred.
In Guangdong province's economic dynamo Shenzhen, three
out of the four auto shows scheduled on the May Day
golden week were canceled.
Moreover, the China
(Shenzhen) International Watch and Clock Fair, the
world's third-biggest professional watch and clock
exhibition after those of Switzerland and Hong Kong, was
also postponed from late April to June. Zhu Shunhua,
vice president and secretary general of the Shenzhen
Watch & Clock Association, said the final opening
date could only be determined by the epidemic situation.
In his eyes, the fair's immediate future was
bleak.
The SARS epidemic has put China in the
unenviable position of international pariah. This makes
holding or attending conferences and exhibitions rather
difficult. Many countries have banned their residents
from traveling to China or attending various kinds of
official and private activities in the country.
Exhibitors from Hong Kong and China were turned away by
the jewelry and watch fair in Switzerland and a film
show in Italy.
The Guangzhou Spring Trade Fair
this year provides a disturbing indicator of the extent
of the economic damage which SARS is inflicting upon
China. The 12-day trade fair, which traditionally sets
the pace for Chinese exports for the year, brought in
US$16.85 billion in orders in April 2002. The fair is
usually crowded to capacity, but foreign buyers
attending the fair this past April had ample room to
walk about, as the number of visitors this year was only
23,128, a devastating drop from last year's total of
120,576. Consequently, the total value of orders placed
at the fair was only $4.42 billion - a 74 percent plunge
from the previous year. An official at the fair refused
to dwell on the startling dropoff in business, declaring
optimistically to one Chinese publication that the fair
was a success because nobody contracted SARS.
Aside from the national significance of the
Guangzhou fair, it is also important on a local level.
In Guangzhou, the fair's arrival can bring additional
revenue of more than $240 million into the city.
However, the shadow of SARS cast its darkness upon the
hotel and taxi industries that usually flourish during
the fair. Some high-end hotels, whose revenues typically
spike during the fair period, recorded an occupancy rate
of only 10-20 percent. Midrange hotels reported
occupancy of 30-40 percent.
The financial damage
incurred by Guangzhou's hotels was so severe that many
high-end hotels began giving their staff indefinite
unpaid holidays starting May 1 in a bid to reduce
operational costs. The tentative plan is to end the
holiday in August, when the next decision will be
determined by the market situation. The dropoff of
seasonal visitors means that the countless taxis in
Guangzhou are in what for them is a highly unusual
position: lining up for customers.
A fate
similar to that suffered by the Guangzhou fair befell
the Shanghai International Auto Exhibition in late
April, where the curtain dropped three days ahead of
schedule due to SARS concerns. The largest international
car show in China has attracted 730 companies from 23
countries and regions worldwide. The total number of
spectators and trade visitors during the two days in
which it was open was 86,000, a sharp contrast to the
expected 450,000. The loss in ticket income alone was
more than $120.8 million, not to mention other related
losses to Shanghai's economy.
Not even political
conferences have proved immune to SARS. The Boao Forum
for Asia, the first international conference
organization to be based in China, is another major
casualty incurred by the epidemic. Still in its infancy
- this was to be the its second meeting - the forum was
postponed indefinitely from its opening previously
scheduled for last Sunday. The Boao forum was created to
serve as Asia's answer to the World Economic Forum, held
yearly in Davos, Switzerland. Ideally, it was also to
serve as a symbol of China's ascendency as a major
global power both economically and politically. The
resort town of Boao on the island province of Hainan,
where the forum was to be held, has suffered
economically from the postponement, which was a result
of numerous cancellations by scheduled attendees and
speakers. On a larger scale, however, China's image as a
viable venue for international political and economic
conferences has suffered as well.
China's
exhibition economy, which had until now been a promising
growth sector during China's recent economic
development, has been hit very hard by the SARS virus.
Had the exhibition and conference industry been firmly
established, it would be easy to discount 2003 as a
fluke and look forward to full recovery in 2004. As with
every prediction regarding the effects of SARS,
everything depends on the time required to bring SARS
under effective control - a huge challenge, to be sure.
The biggest challenge, however, is bringing
international concern about attending Chinese
exhibitions and conferences under effective control.
Additional research provided by Christopher
Horton.
(©2003 Asia Times Online Co, Ltd.
All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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