CHINA— After recent protests in several cities across China over strict COVID restrictions, the Chinese government has decided to ease its extreme policies in several cities, raising hopes that the world’s second-largest economy is on the path to reopening.
On December 7, China’s national health authority announced the easing of COVID-related quarantine and domestic travel rules, in another sign of optimism for the trade show industry eager to see China reopen. The National Health Commission said in its announcement that asymptomatic COVID cases and those with mild symptoms can quarantine at home. Widely seen as a major policy shift, only a building would be closed if a positive case was detected rather than an entire community.
Impact of “Zero COVID” Policies on the Trade Show Industry
International trade fair organizers have seen a decline in the number of Chinese exhibitors and participants. The Financial Times Executives at Messe Frankfurt and the IMEX Group said Chinese participants were largely absent from the trade shows they usually attend and exhibit at.
“Not only have trade fairs not been able to take place in China, but Chinese exhibitors and visitors have had virtually no participation at major international trade fairs, such as in Germany, where visitor numbers remain low due to the lack of Chinese participation. In recent weeks, Chinese exhibitors have shown increasing interest in returning to international trade fairs,” said Paul Woodward, Chairman of Paul Woodward Advisory.
Trade show organizers cautiously optimistic as China eases COVID restrictions
International trade show organizers had to find ways to host shows and connect with customers amid strict COVID-related travel restrictions. Informa Markets moved shows from Hong Kong to Singapore, Bangkok, and Dubai, as travel restrictions in those countries were less severe than those in China. Declaration of results for the first half of 2022Informa said that “the outperformance of live events in fully open markets, combined with the growth of B2B digital services, is balancing the gradual reopening in mainland China.”
Another example is RX Global SinoCorrugated 2021 was enriched with a hybrid event, allowing attendees to attend via a digital platform if they were unable to do so due to strict COVID-related travel restrictions. The platform offered a matchmaking system that allowed international buyers and sellers to connect and do business. The event was held in a hybrid format in 2022 and will take place again in 2023.
Considerations for ending “zero COVID” policies
China’s economy has been hit hard by its continued zero-COVID policies, with CNBC According to Chinese authorities, the measures to combat Covid-19 have had a negative impact of 12.2% of the country’s GDP. However, Woodward says the Chinese government’s concerns are not limited to the economy.
One concern is that some segments of the population are not protected against COVID-19 because the country’s local vaccines are not as effective as those used in other countries. Only 40% of the 65.8% of people over the age of 80 vaccinated in China have received their booster shots, while about 92% of adults 65 and older in the United States have completed their vaccine series, according to the Centers for Disease Control and Preventionand a sudden resumption of international travel could make China’s elderly population more vulnerable to the virus.
However, the trade show industry has lobbied hard in China to lift restrictions and allow operations to resume. “What happens in China today is irrelevant because of the size of the market,” Woodward said.
Global economic outlook is optimistic
Supply chains remain disrupted, but these disruptions have not been amplified by the protests in China. High logistics costs in the supply chain have contributed to inflation throughout the pandemic, and some economic indicators show inflation easing as we approach the end of 2022.
Long-term ocean freight rates fell for the third consecutive month, according to the Xeneta Shipping Index. Freightos Data Gasoline prices fell nearly $3 a gallon in the United States, reflecting that the cost of shipping a container from Asia to the U.S. West Coast has fallen more than 80% since late April, while the cost of shipping to the East Coast has fallen nearly 66%.
“Large international companies that have a strong presence in China are assuming that they are unlikely to hold a large proportion of their trade shows in the first half of next year,” Woodward said. “Most trade organisers have not been able to do anything. We are unlikely to see a significant rebound early next year, but things are looking better for the second half of next year, and 2024 is likely to be a return to normal.”
Contact Paul Woodward on +44 7541 251530 or [email protected]