When Chinese President Xi Jinping pulled back the curtain on an enormous trade show in Shanghai Monday morning, he came bearing attendance figures befitting an event he called “an innovation in the history of global trade.”
Over the course of this week, representatives of 172 countries, regions and international organizations will attend the China International Import Expo, which will bring together some 3,600 companies and 400,000 buyers.
Mr. Xi came with another eye-opening number, too: China, he said, will import US$40-trillion of the world’s goods and services over the next 15 years as it continues an “epic journey” of domestic development and international trade. “Openness has become a trademark of China,” Mr. Xi said.
But that single figure equally encapsulated the skepticism that has greeted Beijing’s proclamations of championing ever-greater international investment, co-operation and trade. The problem, economists say, is that China is likely to need at least $40-trillion in imports over the next 15 years without any change in course; that figure more closely represents a conservative view of the status quo rather than the “initiative to expand imports” that Mr. Xi has pledged.
In fact, the Oxford Economics baseline forecast for Chinese imports over that period is US$72-trillion. That’s far more than Mr. Xi’s figure, which includes US$2-trillion in imports each year between now and 2033, not far off the US$1.84-trillion China already imported in 2017.
His promises of further change – lower tariffs, greater opening of sectors such as agriculture, mining, telecommunications, education and medical services – drew similar skepticism.
“China is trying to make an effort to show that it does buy a lot of things,” said Andy Xie, a former chief Asia-Pacific economist for Morgan Stanley who now works independently. “But this is not a systemic approach,” and for the world’s second-largest economy, “putting on a show doesn’t work like before.
“If you cut tariffs, if you cut taxes at home, you are cutting the red tape on foreign enterprises – those things are real.”
The lack of specific commitments on any of those fronts suggested to observers that China remains far from the kinds of concessions that Washington has demanded, caught in a worsening trade war that has raised tariffs on hundreds of billions of dollars' worth of goods.
Even among China’s guests of honour – a list that included top leadership from Russia, Hungary, Egypt, Vietnam and Kenya – there were signs of discontent with Beijing’s current path. Kenya’s trade with China grew eightfold between 2007 and 2017, but that has been “ heavily skewed in favour of China,” Kenyan President Uhuru Kenyatta said Monday, speaking from the same dais Mr. Xi had occupied moments earlier.
”It is important for us, therefore, to correct the existing trade imbalance to enable a fairer share of the benefits of trade,” Mr. Kenyatta said. African countries, he told his hosts, need “a reduction or an elimination of tariffs to enable access of our products in your market.”
The market reaction to Mr. Xi’s pledge of openness was muted even in the expo’s host city: The Shanghai Stock Exchange Composite Index fell slightly on Monday.
China organized the expo, which will become an annual event, hoping to “ease the concerns of other nations” over trade imbalances and to “help correct the imbalances that have existed for quite a long time,” said Huang Weiping, an economist at Renmin University.
Staging such an enormous event “shows the world China’s determination to protect the global trade environment,” Prof. Huang said, allowing Beijing to “show the world its responsible side and its sincerity in sharing the benefits of trade with other countries.”
The expo “highlights the commitment of Chinese policy-makers to continue opening up the economy by encouraging foreign direct investment inflows and reducing import tariffs,” said Chua Han Teng, the head of Asia country risk and financial markets at Fitch Solutions. “We believe that these policies will help to ensure continued long-term economic development by improving the business environment,” particularly amid the ongoing trade war.
Canada was among the countries expressing support, dispatching a delegation led by Minister of Agriculture and Agri-Food Lawrence MacAulay, who is expected to attend a ceremony on Tuesday to sign more than $550-million in deals. “We are great friends with China,” Mr. MacAulay told CGTN, the Chinese state television network, and Canada hopes the expo “will mean more open trade.”
He sought to dispel concern that a clause in the United States-Mexico-Canada Agreement will constrain Ottawa’s ability to pursue trade deals with Beijing. “It won’t change a thing with Canada and China,” he said, adding: “China is very much included in our road map for success and for trade.”
And the expo “is an important indicator” of China’s parallel ambitions, said Zhang Haibing, head of the Institute for World Economy Studies at Shanghai Institutes for International Studies.
“Western countries, headed by the U.S., are promoting trade protectionism. This is a threat to the global economy,” she said. China wants to “better protect the global trade environment, while helping itself overcome all of the difficulties stemming from the harsh trade policies of Western nations.”
Yet China remains in 59th place among 62 countries in an OECD evaluation of openness to foreign direct investment.
And critics said China’s new emphasis on imports does little to address the international community’s “promise fatigue” with Beijing.
“There’s never been a problem that China doesn’t think they can solve with a big event. It’s PR,” said Jorge Guajardo, a former Mexican ambassador to China who is now a consultant in Washington, D.C.
“An import fair is not the answer,” he said. “What’s needed is real market access, not announcements of future market access. There’s a deficit in credibility to reform promises. Unless there are big announcements followed by immediate actions, this will be another fair with phrases and pronouncements that will be studied by China hands but do nothing to move the needle in cooling the trade war.”
With reporting by Alexandra Li
Nathan VanderKlippe