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Conventions and Exhibitions Benefit Beijing and HK

Hong Kong: regional hub of conventions, exhibitions

The world's 11^th-largest trading economy, Hong Kong, has become a premier trade fair centre in the Asia-Pacific region. Because of its strategic location in Asia and its ability to serve as a gateway to the Chinese mainland, Hong Kong has a distinct advantage over other trade-fair sites in the region. With a record of hosting more than 80 large-scale exhibitions and 900 big conferences annually, Hong Kong has earned a reputation as a "hub of conventions and exhibitions."

Statistics from the Hong Kong Trade Development Council (HKTDC) indicate the Hong Kong Special Administrative Region (HKSAR) has more than 50 venues of various sizes available. The Hong Kong Convention and Exhibition Centre (HKCEC), in particular, is one among the top facilities of its kind in Asia. With its unique settings and top-quality facilities, Hong Kong is rated as one of the region's most popular cities for international meetings.

The council also reported that in 2002 Hong Kong hosted 255 conventions and exhibitions, 1,559 incentive movements and corporate meetings. About 380,000 visitors were attracted to these exhibitions and 112,000 participants took part in conventions and corporate meetings.

The continued buoyancy of trade-fair activity was reflected in increasing revenues generated by the industry. Data supplied by the Hong Kong Exhibition and Convention Industry Association (HKECIA) reveals that revenues increased by 8 percent to HK$1.45 billion (US$185.89 million) in 2002 if compared with 2001 revenues. Exhibitors from almost every sector and geographical region recognize the value of these heightened trade-fair outlays in today's economic climate.

The association estimates that the local exhibition industry, under normal conditions, creates 13,500 jobs if spill-over effects to the food and beverage, hotel and related sectors are considered, and the industry generates about HK$7.3 billion (US$936 million) in income annually.

Hong Kong Tourism Board statistics indicate that more than 25 percent of the 16.5 million visitors to Hong Kong in 2002 came for business purposes or meetings.

Benjamin Chau, assistant executive director of the HKTDC, which owns the first-class HK Convention and Exhibition Center, said the council got into the exhibition/convention business in the 1970s. It has since become one of the world's most professional trade fair organizers. Flourishing industrial and commercial activities have led to the construction of many more convention/exhibition facilities in Hong Kong since the mid-1970s, creating a sound basis for the city to become a capital of trade exhibitions.

The HK Convention and Exhibition Centre, the first large compound built especially for trade fairs in Asia, opened in November 1988. Chau said it was overwhelmed with activity within three years so a 63,000-square-metre (sq.m) new wing was added. The expanded Center was put into operation in 1997, allowing more room for the business to thrive.

But the market is steadily improving. Hong Kong still finds pressed for space during peak exhibition seasons. For example, the annual giftware show at the HK Exhibition and Convention Center can accommodate only 3,200 exhibitors. That means that about 2,000 companies that want to participate in the show languish on a waiting list.
So it's no wonder that HKECIA Chairman Stanley Chu describes Hong Kong as a "victim of its own success." Hong Kong's popularity is resulting in constraints being imposed on the size and scale of exhibitions being hosted.

To address this problem, ground-breaking ceremonies were held in March 2004 for the AsiaWorld-Expo (AWE), Hong Kong's newest exhibition site. The Expo is expected to open in December 2005. Located next to the Hong Kong International Airport, the new centre will be the largest column-free exhibition hall in the city. Phase One will feature an extra 66,000 sq.m of exhibition space by 2006. When Phase Two is completed, there will be an additional 100,000 sq.m available.

Amazingly, with 1.5 years remaining before its opening, the AWE's management reports it has already confirmed 12 major international exhibitions for 2006. John Tsang, Hong Kong's secretary for Commerce, Industry and Technology, said most of the bookings will be recurring annual events.

Kate Newman, of the German fair organizer Messe, said she believes the advantages of holding fairs in Hong Kong are obvious.

"As you are already aware, Hong Kong has excellent infrastructure, communications, transportation and services, everything necessary to make it a convenient and accessible venue for buyers around the region."

Chu said constant upgrading of infrastructure and expertise is crucial.

"With these in place, we will maintain our international status as the foremost location for trade fair activity in the Asia Pacific."

Beijing: a lucrative market

The Chinese capital's status as an increasingly important convention and exhibition market for the country -- and arguably, the region -- is gradually being established, based upon successes such as the China Beijing International High-tech Expo, the Beijing International Automobile Industry Exhibition, the International Printing Technology Exhibition, and many others.

Statistics for 2003 indicate Beijing has 13 major convention and exhibition venues, offering 241,000 sq.m of total display area and 16,000 sq.m of conference space. Of these venues, the China International Exhibition Centre (CIEC), China World Trade Center, the Beijing International Convention Centre and Beijing Exhibition Centre hold most of the market share. The CIEC, in particular, with its 53,000 sq.m of indoor show space and 8,000 sq.m outdoors, is the largest of its kind in Beijing.

In 2003, despite the effects of the Severe Acute Respiratory Syndrome (SARS) epidemic, the 13 venues staged 1,455 conferences and exhibitions, an increase of 12.5 percent from 2002. Of these, 467 were international events, up 24.9 percent from the previous year. For the year, the convention/exhibition industry of Beijing reported 2.83 billion yuan (US$363 million) in revenue, and 7.39 billion yuan (US$947 million) in added value, according to the Beijing Bureau of Statistics.

The sector's strength is mirrored in the events held. The Sixth China Beijing International High-Tech Expo, held in September 2003, attracted 85 foreign governmental and business delegations from 45 countries and regions. The Expo held 20 forums, used 60,000 sq.m of exhibition space, featured 5,000 promotional projects, and fostered the signing of 224 cooperation agreements worth US$4.68 billion.

The Auto China 2004 show held in June drew 1,500 exhibitors and more than 460,000 visitors. This was 50,000 more visitors than in 2002. 

According to official sources, China has now six international exhibitions that are certified by the Union des Foires Internationales (UFI). Five of them are staged in Beijing, including events featuring machine tools, foundries/forging equipment, spinning machines, printing technologies, and refrigeration.

Zhang Ling, deputy secretary-general of the Beijing International Convention/Exhibition Association, said Beijing's conference and trade-fair industry has a great deal more potential for development despite the fact that it is already leading the nation in the number and scale of the events hosted.

"As the nation's capital, where governmental ministries and foreign institutions are based, Beijing has a distinct advantage over other cities when locations for domestic or international exhibitions and conferences are being considered," she said.

Zhang said that as Beijing's economy continues to develop more multinational companies will move their headquarters or research and development centres to the city, which is expected to stimulate even more international business conferences and economic forums. Further, as a world-class city with a population of 14 million, Beijing's huge market and indisputable influence on surrounding cities and regions will serve to draw more convention/exhibition business to the city.

"Although Beijing's convention/exhibition facilities have yet to be upgraded, the major show venues as they are capable of meeting different demands. Beijing's top-class hotels, catering, transport facilities and abundant tourist resources all lend themselves to its attractiveness and suitability for holding large-scale domestic and international exhibitions," Zhang said.

Beijing has 572 star-rated hotels, which provide over 100,000 guest rooms. Many have conference facilities that meet international standards.

To better guide the industry's development, the Beijing Municipal Development and Reform Commission in April mapped out a five-year development plan for the sector, which envisions its total revenues exceeding 4 billion yuan (US$51.2 million) by 2006 with an annual growth rate of 20 percent, and 7 billion yuan (US$89.7 million) in revenue by 2008 with a 30 percent growth rate.

CEPA to promote common prosperity

Provisions concerning the convention and exhibition industry as laid down in the Closer Economic Partnership Arrangement (CEPA) signed last year between the Chinese mainland and Hong Kong. They have been hailed by observers as a turning-point in the industry's development on both sides.

Under the landmark free-trade pact, Hong Kong companies are permitted to set up wholly owned enterprises to provide convention and exhibition services on the mainland beginning January 1, 2004. This means the Hong Kong exhibition/convention industry will enjoy more preferential access to the mainland market beyond China's World Trade Organization commitments. Hong Kong companies can access the mainland market six years ahead of their ASEAN counterparts which will be given access under the China-ASEAN Free Trade Agreement,

Hong Kong exhibition organizers will no doubt be the most immediate beneficiaries of the agreement. Because of their clear advantages in areas of experience, professional talent, overseas networks and marketing channels, they are well positioned to share the lucrative Beijing market. The HK Trade Development Council alone, for example, has a database of about two million buyers. With this kind of extensive international networking, Hong Kong companies can invite more overseas buyers and exhibitors to Beijing, which should help internationalize the local market.

Beijing companies will face tough competition after the entry of their Hong Kong counterparts, but they will improve in the heat of competition.

Chau said, "Hong Kong's exhibition sector has, over the years, matured and become more experienced. As we compete with them, Beijing's companies will learn a lot about operational expertise."

However, as insiders point out, Hong Kong companies also have some disadvantages when compared with their Beijing counterparts such as higher operating costs. Hong Kong fair organizers also have much to learn about the local market in the capital. Working closely with their counterparts in Beijing will likely be a wise thing for Hong Kong fair organizers to consider.

As Chu said, although Hong Kong companies may operate independently in the mainland after CEPA comes into effect, it does not mean Hong Kong companies should do so or ignore partnerships with mainland players. To the contrary, the two sides should further strengthen cooperation to attract more overseas exhibitors and visitors to mainland fairs.