Exhibition Economy and Development of the Yangtze River Delta
Exhibition Economy and Development of the Yangtze River Delta
As an integrated and highly interrelated sector of the trade in services that incorporates information communications, transportation, urban development, and tourism, exhibitions can create high-value economic value, provide extensive employment opportunities, and stimulate a rise in the social composite economic index. As an economic form that possesses basic industrial characteristics, it can therefore be referred to as an “exhibition economy” or “exhibition industry.” The exhibition industry is an economic phenomenon and activity aiming to realize direct or indirect economic and social benefits through organizing all types of conferences and exhibitions.
China's exhibition economy is developing at an unprecedented, dynamic pace into a new force in the global exhibition industry, with an annual average growth of 20%. In 2003, the direct value of the exhibition industry amounted to RMB 8 billion. As an industry of low pollution and high yield, the exhibition industry is becoming one of China's fastest growing service sectors, with great development potential and bright prospects. The Yangtze River Delta, with Shanghai as the head and Jiangsu and Zhejiang Provinces as the wings, is one of the most developed areas in China. Almost 6% of China's population and nearly 22% of the total GDP are concentrated in this area, which accounts for only 1% of the total land area of China. Surveys show that the top ten cities with the most favorable investment environment are located in the Yangtze River Delta region. Therefore, the exhibition industry is closely linked with the development of the Yangtze River Delta.
The so-called “China Yangtze River Delta” of the exhibition industry includes Zhejiang and Jiangsu, as well as the lower reaches of the Yangtze River under the jurisdiction of the two provinces and Shanghai city. Sixteen large- and medium-sized cities, such as Shanghai, Nanjing, Ningbo, Suzhou, Hangzhou, Taizhou, and Nantong, are located in this region and separated into blocks. The link between city agglomerate to individual cities can be likened to the relationship between “networks and knots.” Every city is in an equal position and has complementary functions. Amidst competition and cooperation, all the cities in the region have reached a win-win outcome, thus forming a unique city agglomerate. The Yangtze River Delta metropolis circle, made up of these cities, is linked to the Beijing-Tianjin-Hebei metropolis circle and the Pearl River Delta metropolis circle, and has been listed as one of the three largest metropolis circles in China. It is also referred to as “the world's sixth largest city agglomerate.”
The economic position of the Yangtze River Delta region has always been ranked among the top in China and is widely recognized as the most populous, most developed, and best-off region in China. Where GDP is concerned, the ratio of its primary, secondary, and tertiary industries are 5.9: 51.8: 42.3 respectively.
According to A Review of Economic Operation and Development in Three Metropolitan Economic Circles in 2005 issued by the National Development and Reform Commission in 2006, the local revenue of the three metropolis circles accounted for almost 40% of the national revenue, and the Yangtze River Delta alone accounted for 21%. In 2005, there was a 9.9% increase in the GDP of China, which amounted to RMB 18.232 trillion, and the realized regional GDP of the 16 cities in the Yangtze River Delta region exceeded RMB 4,000 billion. Based on their total GDP, the 16 cities have already formed four phalanxes. Shanghai is the first phalanx, with its GDP exceeding RMB 910 billion; Suzhou, Hangzhou, Wuxi, Ningbo, and Nanjing constitute the second phalanx, with its total GDP exceeding RMB 200 billion; the third phalanx is made up of five cities—Nantong, Shaoxing, Changzhou, Taizhou, and Jiaxing— with its total GDP exceeding RMB 100 billion; the fourth phalanx consists of Yangzhou, Zhenjiang, Taizhou, Huzhou, and Zhoushan, with its total GDP below RMB 100 billion.
Since 2006, the economic growth of the 16 cities in the Yangtze River Delta has progressed rapidly, and their industrial structure has also improved. According to the statistical data released by the Shanghai Statistics Bureau, in the first quarter of 2006, the economic growth of the 16 cities in the Yangtze River Delta remained rapid, with accelerating growth rates above the national average. The GDP of the 16 cities has reached RMB 853.56 billion, accounting for 19.7% of the national GDP. Among the cities, Shanghai's GDP ranked first, amounting to RMB 229.672 billion, followed by Suzhou (RMB 108.83 billion), Wuxi (RMB 72.45 billion), Hangzhou (RMB 67.3 billion), Nanjing (RMB 60.59 billion), and Ningbo (RMB 59.34 billion). With respect to economic growth, the GDPs of 15 cities, except Jiaxing, have increased to different extents on a year-on-year basis, with 11 cities seeing a more than 15% growth in GDP. The average GDP growth of the 16 cities reached 15.1%, representing a rise of 0.9% compared with the same period in the previous year, and 4.9% higher than the national average, thus maintaining its position as the key economic growth pole of the country. An analysis based on region indicates that the GDP growth in Jiangsu Province is the fastest, with the average economic growth rate of its eight cities reaching 15.5%. The average growth in GDP for the seven cities in Zhejiang Province is 14.9%, and that for Shanghai is 12.3%.
The Yangtze River Delta has witnessed a gathering momentum in its industrial restructuring and new progress in the development of the service sector. In the first quarter of 2006, the added value of the primary, secondary, and tertiary industries in the 16 cities of the Yangtze River Delta were RMB 23.17 billion, RMB 469 billion, and RMB 361.4 billion respectively, up 2.9%, 17.7%, and 13.5% over the same period in the previous year. The ratio of the three industries is 2.7: 54.9: 42.3 respectively. Compared to the previous year, there was a drop of 2.2% in the secondary industry, and an increase of 2.8% in the tertiary industry. Among the 16 cities, eight have seen an increased proportion of the added value of the tertiary industry on a year-on-year basis. There are five cities with the proportion of their tertiary industry exceeding 40%: Zhoushan (58.5%), Shanghai (52.6%), Nanjing (48.4%), Taizhou (43.6%), and Hangzhou (42.5%). Looking at this aspect by region, the growth in the proportion of the tertiary industry in Shanghai is the largest, followed by the seven cities in Zhejiang, with an average of 40.7%, and the eight cities in Jiangsu, with an average of 37.2%. Therefore, one can conclude that the economy of the Yangtze River Delta is developing quickly and steadily, and the industrial structure is continually optimized.
The Yangtze River Delta enjoys a unique advantage in developing the exhibition industry. Several prerequisites are necessary for the development of the exhibition industry: firstly, the manufacturing industry must be developed and have an obvious industrial advantage; secondly, economic and trade activities must be frequent and the market flourishing; thirdly, the urban function and facilities must be complete, and transportation convenient; lastly, there must be a comprehensive availability of exhibition halls and supporting facilities. According to incomplete statistics, approximately 60 cities in China have been designated to focus on the development of the exhibition industry. However, many cities have neglected the prerequisites for developing the exhibition industry, resulting in erroneous policy decisions and serious waste of resources. At present, the total area of exhibition halls in China ranks second in the world, however, the utilization rate remains below 20%.
As the central city of the Yangtze River Delta region, Shanghai will become an international economic, trade, financial, and shipping center as approved by the Central Government. This strategic position is in line with the prerequisites for the development of the exhibition industry and will eventually bring about a large influx of information, material, people, and capital, enhancing Shanghai's urban service capability and attracting more world-famous exhibitions to Shanghai.
According to statistics from the Shanghai Convention and Exhibition Industries Association, 276 international exposition projects were held in Shanghai in 2005. Compared to 2004, there was a reduction of 2.8%, however, the total exhibition area increased to 3.76 million square meters, a growth of 22.8% from 2004. There were 105 international expositions held, the exhibition area of which exceeded 10,000 square meters, accounting for 38% of the total exhibition area. Amongst them were 15 super-sized international expositions with exhibition areas exceeding 50,000 square meters. A total of 176,000 exhibitors participated in the expositions, including 42,000 overseas exhibitors. The total number of visitors reached 7,600,000, including overseas visitors numbering 455,000, bringing about high visitorship for thousands of interrelated conferences. As a result, the exhibition industry has been substantially enhanced in terms of internationalization, scale, branding, and professionalization. This means that Shanghai's exhibition industry has improved in both quality and scale.
Shanghai, as the central city of the Yangtze River Delta region, enjoys obvious advantages in its machinery, chemical, automobile, shipbuilding, and other manufacturing industries. It is supported by the electronics and apparel industrial bases in Jiangsu and Zhejiang provinces, coupled with the advantage of the coastal ports on its eastern coast. Through the integration of all the above industrial resources, the industrial structure in the Yangtze River Delta region will be further optimized, thus bringing about a bright future for the regional economy.
The exhibition economy has become an indispensable element in the development of the whole region, acting as an internal driving force in the regional economy. It has also given prominence to the important role of the exhibition industry during the industrialization, marketization, and social transformation of the Yangtze River Delta region. Experts have pointed out that as the 2010 Shanghai World Expo approaches, and with the great radiating power of Shanghai, an urban exhibition agglomerate will soon appear in the Yangtze River Delta.
First, the exhibition industry will bring direct economic benefits to the region
A framework has basically taken shape in China's exhibition industry, which comprises three exhibition industrial belts—one in the eastern region, one in the middle and western regions, where the regional exhibition cities are, and one at the border trade exhibition industrial belts in the northeast. The three exhibition industrial belts are the Beijing-Tianjin-North China exhibition industrial belt, with Beijing as the center, the Yangtze River Delta-East China exhibition industrial belt, with Shanghai as the center, and the Pearl River Delta exhibition industrial belt, with Guangzhou and Hong Kong as the center.
In the Yangtze River Delta region, large-scale world-class exhibition halls with innovative designs are being constructed in cities such as Nanjing, Hangzhou, Ningbo, Suzhou, Yangzhou, Yiwu, Taizhou, Yuyao, and Kunshan. Taking Suzhou as an example, a total investment of RMB 2.2 billion has been put into the building of the Suzhou International Expo Center. Construction of this exposition center began in September 2003, and upon completion it will become the second-largest exhibition hall in China, after the Guangzhou International Convention and Exhibition Center, with a land area of 120,000 square meters. Yuyao in Zhejiang Province has also invested a large amount in its exhibition sector, of which its China Plastics International Expo Center has an exhibition area of 40,000 square meters.
In recent years, all the cities in the Yangtze River Delta region are beginning to regard the exhibition industry as a promising one. Statistics show that an average of one exhibition or convention is held in Nanjing every five days. The number of exhibition enterprises in Hangzhou has increased from just a few to over 100, and more than 100 exhibitions are held there annually. There have been improvements in both scale and quality for some well-known exhibitions, including the West Lake Expo in Hangzhou, eMEX in Suzhou, the International Medium and Small Enterprises Expo in Changzhou, the China International Fashion Trading Fair in Ningbo, the Zhejiang Investment and Trade Symposium, the Electronic InfoComm Expo in Suzhou, and the China Yiwu International Commodities Fair.
The exhibition industry itself has brought considerable direct economic benefits to the region. The exhibition economy has generally been regarded as a high-yield and high-profit economic model, with profits approximating above 20–25%. As the driving force of the Yangtze River Delta, as well as a rapidly rising Asia exhibition capital, Shanghai has become a strong engine for China's exhibition industry.
According to a survey, 2,467 exhibitions were held nationwide in 2004. The five provinces or cities which held the most exhibitions were Beijing, Shanghai, Guangdong, Jiangsu, and Sichuan respectively. Shanghai and Jiangsu from the Yangtze River Delta ranked second and fourth respectively, and Zhejiang ranked seventh. Exhibitions held in these two provinces and one city totaled 686, accounting for 27.8% of the national total.
|Table 8.1 Exhibitions held in some of China's provinces and cities in 2004|
|Province or city||Number of exhibitions held|
However, problems still existed in the exhibition industry. A survey conducted by the Hangzhou Convention and Exhibition Office showed that among the 100 exhibition enterprises in Hangzhou in 2004, no more than 40 companies were capable of independently holding exhibitions. In fact, there were some long-established companies which had never held an exhibition before. Among the exhibitions held by the companies, those with over 500 booths in the exhibition made up 10% of the total, and more than half of the exhibitions held had less than 200 booths. Such a phenomenon was common, not only in the exhibition industry in Hangzhou, but also in the entire Yangtze River Delta region, indicating that the exhibition industry in the region still remains in the preliminary stage of being “small, dispersed, and disorderly.”
Local governments in the Yangtze River Delta have actively responded to this situation. For example, Shanghai has taken the lead in making laws and regulations for the exhibition industry. The Shanghai Administrative Measures on the Exhibition Sector, the first law in China targeting the regulation of the exhibition industry, went into effect on May 1, 2005. These administrative measures aimed to tackle such problems in the exhibition industry as a glut of small-scale companies, irregular approval procedures, and infringements of intellectual property rights.
Second, the exhibition industry will play a leading role in promoting the development of other industries, by continuously enhancing its brand value
The driving coefficient of exhibitions for the regional economy is generally between 1:7 and 1:9, hence the development of an exhibition economy in a region can exert a huge positive effect on the local economy. It is estimated that nearly 100 employment opportunities are created with every increase of 1,000 square meters of exhibition area. In addition, not only can the exhibition economy itself bring about huge economic benefits, it can also promote development in relevant industries, such as transportation, tourism, catering, communications, and advertising.
According to another estimation made by Shanghai city, the relevant economic benefits brought by Shanghai's exhibition industry are enormous, with a direct input-output ratio of 1:6, and an indirect ratio of 1:9, which has an obvious pull effect on Shanghai's GDP. Taking the 1999 Fortune Global Forum—Shanghai Annual Meeting as an example, the event lasted only three days, but revenue for hotels alone amounted to millions of US dollars. The revenue made in other industries was also quite considerable.
A well-regulated and mature exhibition industry will be able to stimulate the development of related sectors in the city or region, such as tourism, catering, transportation, and real estate, thus greatly enhancing the region's economic strength, producing an industrial ripple effect. Amongst the various industries, tourism benefits most from the exhibition industry. A comprehensive review of global tourism reveals the importance of highlighting the role of the central cities, maintaining inter-regional relations, focusing on key tourism projects, and matching reasonably the scenic spots of neighboring cities. The exhibition industry can bring a large influx of people and visitors. Shanghai also has a strong complementary relationship with the Yangtze River Delta region in tourism. Through resource integration and interaction in tourism, the exhibition industry will eventually enable the Yangtze River Delta to create a Yangtze River Delta tourism brand.
The so-called ripple effect of the exhibition industry means that any changes in the industry will cause corresponding changes
to those sectors which have a direct relationship with it, in turn resulting in further changes in other related sectors. This impact will be passed on at a weakening level.
Because of the ripple effect, the exhibition industry will bring both considerable economic benefits and immeasurable social benefits to host cities. As the source of the ripple, the exhibition industry plays an important role in promoting the development of relevant industries, boosting urban employment, and promoting the development of domestic and foreign trade. For this reason, since the mid-1990s, many cities in China have regarded the exhibition industry as their pillar industry, ushering in a period of rapid development for the exhibition industry in China.
Third, the development of the exhibition industry will further promote the integration of the Yangtze River Delta region
The development of the exhibition industry will deepen the economic cooperation among the cities in the Yangtze River Delta region. The hosting of the Shanghai World Expo will definitely create a World Expo Circle in the Yangtze River Delta. The flow of tourists and other effects brought by the World Expo will integrate the economies in the Yangtze River Delta region. Through a series of multi-win collaborations, the cooperation among the cities will be deepened, accelerating the construction of the city agglomerate in the Yangtze River Delta.
All the cities in the Yangtze River Delta have decided to become seamlessly integrated with Shanghai in an effort to take advantage of the powerful radiation force from Shanghai. In view of this, the leaders of Jiangsu, Zhejiang, and Shanghai prioritized the establishment of a Yangtze River Delta cooperation mechanism in the 11th Five-Year Plan period. At present, the Yangtze River Delta city agglomerate, with Shanghai as the center, has already taken shape and won worldwide recognition for its mixture of large-, medium- and small-sized cities. There are large-sized cities, like Shanghai, Nanjing, Hangzhou, and Ningbo, medium-sized cities, like Suzhou, Wuxi, and Yangzhou, as well as a large number of small-sized cities. In the course of spearheading the modernization of China, the cities in the region have strengthened economic interaction and cooperation, taken advantage of each other's strengths, and cooperated closely in industry, commerce, finance, tourism, property rights market, and ecology.
Shanghai has entered an all-dimensional, multi-tiered, and broad-based cooperation with other cities in the Yangtze River Delta region. For instance, more than half of Shanghai's investment projects outside the city go to the Yangtze River Delta region. A large part of Shanghai's export products come from Jiangsu and Zhejiang provinces. The role of Shanghai as a trade transit hub is being increasingly enhanced. A complementary and inseparable tie has been forged between Shanghai and other cities in the Yangtze River Delta.
Enhancing Shanghai's function as a city hub, as a window, as well as a distribution center, has greatly stimulated the information communication, technological cooperation, trade, personnel exchanges, and cultural exchanges between nations and regions. This has in turn exerted direct radiation and pull effects on the entire Yangtze River Delta. A Yangtze River Delta city agglomerate with Shanghai as the core is rapidly rising to become an exhibition city agglomerate, one similar to Germany's exhibition city agglomerate comprising Munich, Frankfurt, Dusseldorf, and Cologne. Strengthening regional cooperation has become the major trend in the current international economy. The integration of the regional economy is also playing an increasingly prominent role in the development of the world economy and becoming an important force in the process of globalization. Now there are several famous “city circles” or “metropolis circles” in the world, such as New York, Paris, Tokyo, and London. It is widely believed that in the near future, a new world-class city agglomerate will take shape in the Yangtze River Delta. In the next five to ten years, by taking the exhibition industry as an impetus industry, the exhibition city agglomerate in the Yangtze River Delta region will push its overall development of the regional economy to a higher level.
Fourth, the development of the exhibition industry will promote the upgrading of regional industrial structure
In 2005, the actual amount of foreign capital absorbed by the Yangtze River Delta area remained at the top of China's three large economic regions. However the growth rate has declined distinctly, with an increase of 8.83% over the previous year, due to the following factor: the rapid growth of most areas in the Yangtze River Delta is a result of heavy reliance on foreign-funded enterprises, which has hindered the development of local companies. The proportion of the tertiary industry in the Yangtze River Delta economic region is lower than that for the Pearl River Delta and the Beijing-Tianjin-Hebei region. Despite the rapid growth of the tertiary industry in many cities in the Yangtze River Delta in 2005, the Jiangsu and Zhejiang provinces still remain at the stage where rapid industrialization and fast-growing secondary industry have curbed the development of the tertiary industry. In addition, the lack of innovation is also a bottleneck preventing the upgrading of the industrial structure of the Yangtze River Delta.
Development of the exhibition industry can promote economic cooperation, stimulate the tertiary industry, optimize industrial structure, and improve the efficiency of resource allocation. Through exhibition, information about the market, technology, and products can be extensively exchanged. The pull effect that the exhibition industry has on the tertiary industry is especially distinct. The exhibition economy involves a wide range of industries such as services, transportation, tourism, advertising, decoration, border inspection, customs, real estate, restaurant, communications, as well as the hotel industry. Therefore, not only will it be able to cultivate new industrial clusters, it will also directly or indirectly promote the development of a series of relevant industries, most of which are from the tertiary industry.
Specifically, the gathering and diffusing functions that the exhibition industry has are important elements necessary for the upgrading of the regional industrial structure. The assembling effect can expand the scale of the market and enhance cooperation and collaboration through the gathering of economic factors in the region. In particular, when the exhibition industry moves from China to the international arena, it will not only broaden the scope of the regional market and enhance its reputation, it will also strengthen international specialization and increase economic strength. On the other hand, the diffusing effect can encourage specialized production and exchange based on comparative cost, and hence increase the total output by tangible diffusion of information and services, as well as intangible diffusing of technology, culture, and concepts. Through exhibition and exchange of new technology, concepts, and even new systems, the exhibition industry will serve as the driving force for the continuous development of the regional economy.
Fifth, the social benefits of the exhibition industry will further promote the overall development of the whole region
Indeed, the economic benefits that the exhibition industry brings are considerable, but the social benefits arising from it should not be neglected. Firstly, it can increase employment. The exhibition industry is part of the service industry, which can provide a wealth of employment opportunities. The exhibition itself will create directly or indirectly vast employment opportunities. Secondly, the exhibition industry will be able to drive urban infrastructure construction. For instance, in the 1999 Kunming International Horticultural Exposition, the investment on the 218 hectares of exhibition halls and other relevant projects exceeded RMB 21.6 billion. This accelerated the urban construction of Kunming at least ten years ahead of plan. As part of the preparation for the APEC meeting in 2001, the tourism, commerce, and transportation facilities of Shanghai, as well as other facilities, were developed at a rapid pace. All the mobile communication blind spots in four-star hotels and above were removed, and Internet access was made available to 3,000 journalists from both inside and outside China at any one time. Seizing the APEC opportunity, the Shanghai Municipal Government performed an unprecedented “urban cosmetic surgery.” The total area of landscape and roads rebuilt or repaired covered more than three million square meters. Specialized repairs were also carried out on more than 100 roads. Thirdly, the exhibition industry can enhance the city's reputation and competitiveness. International expositions serve as vibrant and unique advertisements for cities, displaying to all the exhibitors, traders, and visitors from around the world the scientific and technological level and economic strength of a nation or a region. At the same time, the charm of the host city will be presented, its sphere of influence and worldwide reputation will be enhanced, and its competitiveness increased. The exhibition industry plays an active role in the rebuilding of cities and the reshaping of the urban image.
The World Expo economy generally comprises three parts. The first part includes a series of economic activities initiated by the host city in preparation for the event, as well as its significant impact on the surrounding area. The second part comprises all the economic activities carried out to develop the World Expo resources. The third part refers to the relevant economic activities aimed to develop the regional economy, and to realize the integration and unification of the regional economy.
All past World Expos have had a significant impact on the development of the neighboring economies. For instance, in 1998, Portugal held the World Expo on a deserted coastland in Lisbon. Today, this region (including Lisbon) has become a business center. In 1992, Spain held the World Expo in Seville. This city quickly grew into a tourist city. In 1988, Australia held the World Expo on the two sides of the Brisbane River, and subsequently this area became a leisure and entertainment center. In 1970, Japan held the World Expo in Osaka for the first time. After the expo, a Kansei economic belt took shape, bringing about ten years of prosperity and development to Japan.
The 2010 Shanghai World Expo will be a catalyst for the integration of the Yangtze River Delta region. It will attract more foreign investment to this region. In preparation for the expo, Shanghai has carried out full-range building work in Shanghai city. Significant effort has also been put into upgrading its function as an economic, financial, trade, and shipping center. All these will effectively optimize the development of the Yangtze River Delta region, improve the standard of living in this area, as well as enhance its competitiveness.
The inner ripple effect radius of the 2010 Shanghai World Expo covers the Suzhou, Wuxi, and Changzhou area, as well as the Hangzhou, Jiaxing, and Huzhou area. The external ripple effect extends to the region in the middle and upper reaches of the Yangtze River. The ripple effect of the World Expo is strongest in the area 200–300 kilometers from the core, or within a three-hour transportation radius. For example, Hangzhou, an important city in the region, fully understands the opportunity of cooperation with Shanghai in connection with the World Expo. In April 2006, Shanghai and Hangzhou signed a Framework Agreement on Deepening Cooperation and Communication between Shanghai and Hangzhou. In order to be well prepared for the World Expo, Hangzhou has also published a plan titled “Integrating into Shanghai and Developing the World Expo Economy.” Once the Shanghai–Hangzhou Maglev Line is put into operation, Hangzhou will most likely become the city to relieve the accommodation pressure on Shanghai and reap notable benefits in the process.
Cities in the Yangtze River Delta, such as Shanghai, Nanjing, Hangzhou, and Ningbo, have all hosted important international conferences or exhibitions and played key roles in China's exhibition economy. As the host city of the World Expo, Shanghai, with its unique advantageous resources, will soon become the center of the exhibition economy in the Yangtze River Delta. With the Shanghai World Expo, the entire Yangtze River Delta will become even better known to the world, propelling the city agglomerate to become another new Asian exhibition center. With its solid economic foundation and developed industry, the Yangtze River Delta is pushing its exhibition economy into high gear. A mature exhibition economy with regional characteristics will definitely enable all the cities in the Yangtze River Delta to benefit from it and enjoy harmonious development.