China SME Fair: Italy Comes on Strong

UNCLAS GUANGZHOU 030513 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON ETRD CH SUBJECT: China SME Fair: Italy Comes on Strong (U) This message is sensitive but unclassified. Please handle accordingly. ¶1. (SBU) Summary: The Third China International Small and Medium Enterprise (SME) Fair, co-hosted by Chinese and Italian governments, brought a wave of Italian businesspersons, entertainers, and government officials, including Italian Prime Minister Romano Prodi, to Guangzhou September 15-18. Though the SME Fair is only three years old, it has quickly become a quality event, with an impressive organization and a high level of public and official interest. End Summary. A New Fair for Guangzhou -------------- ¶2. (U) Guangzhou held the first China SME Fair in 2004, with the cooperation of the Hong Kong Trade and Development Commission and the Macau Trade and Investment Promotion Office. In 2005, fair organizers looked further afield and selected France to co-host and sponsor exhibitors. Italy was chosen as the co-host this year, with Germany, Japan, and Thailand reportedly expressing interest in sending delegations in 2007. The Chinese government organizers are the China Banking Regulatory Commission, the National Development and Reform Commission, the Ministry of Commerce, the Ministry of Finance, the State Administration of Industry and Commerce, and the Guangdong provincial government. ¶3. (U) The fair was held in Guangzhou's new exhibition center in Pazhou, which is also the site of the Canton Trade Fair. The majority of the exhibitors were Chinese SMEs. Hong Kong, Macau, and (this year) Italian SMEs also received a generous amount of space. In addition to the numerous booths operated by SMEs, some large companies, such as China Mobil, AIG, and Citibank, used the event to build their SME customer base. Citibank advertised its loan-management and finance services. Seminars on SME financing, cooperation projects, procurement, and training were held concurrently for attendees. The fair reportedly included 3,970 SMEs, 948 of which were foreign. Italy Brings a Show -------------- ¶4. (U) Italy made a strong showing at the event, highlighted by the presence of Prime Minister Prodi and several ministers. (This was Prodi's first trip to China since becoming Prime Minister. In addition to Guangzhou he visited Nanjing, Shanghai, and Tianjin.) The Italian delegation included 714 Italian businesses and 1,400 Italian businessmen, a significant improvement over the French showing last year of 160 companies. The Italian exhibition area was divided by geographic region and had displays promoting Italian furniture, food, automobiles, pottery, and biotechnology. In conversations with Congenoffs at the first night reception, a number of Italian businessmen indicated that they saw niche markets in China as the wave of the future for Italian enterprises. ¶5. (U) During his remarks at the opening ceremony, Brodi expressed concern over the lack of market access in China's distribution sector, lack of credit availability, and IPR infringement. Vice Premier Zeng Peiyan and Guangdong Party Secretary Zhang Dejiang spoke of the benefits that SMEs contribute to China's overall economic development. Italian musicians, including a military orchestra and opera singers, performed at prominent Guangzhou venues throughout the weekend. Comment: Worth Watching -------------- ¶6. (SBU) Guangzhou loves to host trade fairs, and in the busy fall season there are weekly events, with products ranging from gems to bags to shoes. The China SME fair is new, but is off to a strong start. The amount of business these events generate for the exhibitors is not clear - official statistics on the volume of contracts signed are often inflated (reportedly RMB 42 billion or USD 5.4 billion this year). However, the opportunities for SMEs to meet Chinese officials and to display their products to curious Chinese onlookers are likely worth the trip. The event is one that U.S. SMEs might want to take a hard look at if they are to promote their products in southern China. GOLDBERG