Se04 the story of china

China’s meeting industry in a transition period

Prof. Lan XingShanghai University of Int’l Business & Economics

(SUIBE)

November 3, 2013ICCA Congress, Shanghai

PastNow

Shanghai

ICCA GA Shanghai 20131103 2

I. Historical background: Where is China?


I. Historical background: How’s the political environment?

• Founding of the People’s Republic of China (PRC)

in the year of 1949• New China carried out socialist system• Suffered from political and diplomatic

blockade from the West


I. Historical background: The economic situation?

• The economic structure massively ruined when the new government took over this war-torn country• The economic and trade embargo from the outside world• The new China adopted the principle of “Self-reliance” to restore the national economy • We implemented the “Planned economy”


What’s the position of Shanghai?


How Shanghai developed?

• In 1843, Shanghai was forced to open to the outside world as commercial port, due to the signing of “The Treaty of Nanking” .

• Since then, foreign goods and capitals swarmed into Shanghai.

• Then appeared docks and warehouses; Concessions and settlements set up, banks opened along the Huangpu River

• A small fishing village gradually turned to a metropolitan city in the Far East in early 20th century.


What characteristics of Shanghai?

• The largest city in China Municipal area: 6,341 km2 Population: 23.80 million(2012)

• The economic center, trade center, financial center, shipping center

• Blended western and eastern cultures in terms of architecture , business conducts, lifestyle, arts, cuisines……


G. London: 1,738 km2 G. London: 8.,301 million(2012)

G. London: 1,738 km2 G. London: 8.,301 million(2012)

II. Economic operation under transition period

Since 1978, China has carried out the policy of “Economic reform and Opening to the outside world”

Thus, China entered the transforming era


From Planned economy to Market economy


Bears both economic features

Some key milestones to the market economy


In 1980, the 1st Special Economic Zone set up in Shenzhen,

following another 5 and 14 coastal cities opened to outside

In 1990, Shanghai Pudong New Area development

launched

In December 2001, China entered WTO after 15 years of

difficult negotiation

Sources from: Dr. Zhou Hanmin, policy-making consulting adviser of Shanghai Municipality

China’s GDP per capita in 2012


Beijing: USD10,377≈Slovakia

Shandong: USD6078≈S. Africa

Jiangsu: USD7681≈Belarus

Shanghai: USD10,827

≈Saudi ArabiaZhejiang: USD7355

≈Azerbaijan

Guangdong: USD6440

≈Kazakhstan

Qinghai: USD3545

≈Turkmenistan

Yunnan: USD2320≈Vanuatu

Source from: http://www.economicdaily.com.cn/a/201210/10984.html

Sources from: Dr. Zhou Hanmin, policy-making consulting adviser of Shanghai Municipality

The ratio of tertiary industry

In 2012, China’s tertiary industry takes up 44.1% in GDP

Beijing 76.36%

Guangzhou 61.50%

Shanghai 60.00%

USA, France, Italy, UK, Germany, Japan: ranged from 71% to 79.80%

USA, France, Italy, UK, Germany, Japan: ranged from 71% to 79.80%


Hong Kong 94.00%

Macau 93.60%

Taiwan 68.80%

Sources from: http://www.elivecity.cn/html/jingjifz/1108.html

III. Meeting industry in the transition period


What kinds of “meetings” we had mostly before “Opening to the outside world”?

III. Meeting industry in the transition period

How was the situation of the meeting market thereafter? • Since 1989, China began to host an increasing number of international conferences • During this period, the Chinese government provided the financial support to these international meetings • Since 1995, the central authority has issued several directives in order to cut down government-funded

international meetings to be held in China

• Now self-financed meetings are more encouraged


Sources from: The Statistic Report of China’s meeting industry in 2011

What’s special in China’s market?


What’s special in China’s market?• All international meetings to be held in China must get approval by

the central/provincial governments

• Government-funded meetings take up a large share of the meeting market. High financial subsidies

• Weak position of trade association meetings

• Low rate of utilization of newly-built convention centers nationwide

• Local governments encourage more meetings from abroad

• Mature market mechanism yet to be established along with development of a sound legal system for the industry


Some new policies


4. Overseas delegates reach 500-1000 persons, the meeting will be granted 300,000 RMB.

5. Overseas delegates reach over 1000 persons, the meeting will be granted 500,000 RMB.

……

Some new policies


Themes overlapping, duration too long, meeting scale too large, financial burdens increasing;

Some going in for ostentatious scenes, excessive expenditures, huge waste;

Meetings with no substantial contents, lack of real effect

Some main points: • Strictly abide by the approval rules

• Tight control of the total number of int’l meetings in China• Reduce the meetings of over 100 delegates. For meetings

co-hosted with foreign bodies, the scales keep the same level as the previous one or below.

Some new policies


<Financial Administrative measures and expenditure standards for international meeting to be held in China>

•Applicable to various int’l meetings co-hosted by central governmental bodies and foreign institutions or entrusted

by those bodies, and that apply for central financial allocation

Some new policies


some main points:The cost items and standards of int’l meetings:

•Venue rental: The rental of the venue is set at 100 yuan(RMB), 150 yuan, 200 yuan/day/person respectively

for a small-, medium- or large-scale meeting.• Buffet for opening or closing ceremony is set at 150yuan/delegate (incl. beverage and service fee)• Board and lodging cost for work staffs is set at

300yuan/day/person during the meeting.

IV. Greater potential market

A bigger step to spur more free economic operation with outside world

• To focus on facilitating investment and commerce from goods management previously

• To open wider the tertiary industry with more diversified modes, especially the financial sector

• To simplify formalities of trade settlement, tax preference and currency convertibility

Potential benefits:• Government policies more transparent • Administrative measures more flexible to foreign firms• Spill-over effects to the outside areasICCA GA Shanghai 20131103 25

IV. Greater potential market

My advice:

• Keep a close eye on the fast-changing market

• Be adaptable to the unique situation

• Be patient to gain your success in China！
