CIIE shows China welcomes products from around the world

The 6th China International Import Expo (CIIE) is to be held from November 5th to 10th in Shanghai, China. In this episode, we invite three guests from various sectors, who will share their unique CIIE experience as well as their views on this big event.

Tune in to this episode for valuable insights and interesting points!

Guests:
- Eric Zheng
President of the American Chamber of Commerce in Shanghai
- Henry Osvald
President of the Brazilian Association for Industry, Commerce and Innovation in China (BraCham)
- Ulrich Stefer
CFO of the Greater China Bayer (China) Limited

Transcript

Host：
Hi everyone, welcome to China Trends. Let's stay on top of trends shaping our future. I am Yoyo. The 6th China International Import Expo, or CIIE, is to be held from November 5th to 10th in Shanghai, China. This time, we are happy to invite three guests to join our "CIIE talk" today. Hi, welcome. Could you please give us a brief self-introduction?

Ulrich Stefer: 
My name is Ulrich Stefer. I'm the chief financial officer for Bayer here in China. Bayer is a multinational healthcare and life science company that is active in the fields of prescription drugs, self-care, and crop science. Personally, I have been in Shanghai for 4 years, (and I am) looking forward to the discussion.

Henry Osvald :
My name is Henry Osvald. I am the President of BraCham, Brazilian Association for Industry, Commerce and Innovation in China. We have around 150 companies. I've personally been in China since 2004, also looking forward to our discussions.

Eric Zheng
I am the President of the American Chamber of Commerce in Shanghai. My name is Eric Zheng, The American Chamber of Commerce in Shanghai has been around for a long time. It was founded in Shanghai in 1915. So we've been around for over a century. We were based in Shanghai, but with a focus on developing business, and supporting our member companies in the Yangtze River Delta Area. Currently, we have over 3,000 members about 1,000 of those are corporate members.

HOST 
Thank you for coming. So my first question is for Eric, I remember the last time that you came to our studio to discuss with us why last time you didn't participate in our CIIE. So I know that you've done a lot of work to organize your members to come to this event.

So I wonder what the picture of the experience of your entering the Shanghai community to participate in CIIE is. Any changes or trends that you've observed?

Eric Zheng
We've been part of the CIIE since day one of 2018, and personally, I was the chairman of the American Chamber in Shanghai back then. So I went to the very first one. And in the past 5 years, I've joined each and every one of those events. The first two ones were certainly the beginning part. And American Chamber in Shanghai participated in a booth, in itself, a small booth, for the second time in the second year. We also participated in many functions around those events, such as the Merchers' acquisition conference where I was a featured speaker.

And we've seen this grow over the years and certainly during Covid, it was more challenging. So it went online and last year (the event) got back to normal. So we again, many of our companies joined that one. So over the past 5 years, U.S. companies accounted, if not the number one, at least one of the top participants from a number of participants standpoint. And we see certainly a lot of value in participating in CIIE. And, this will be, the 6th one will be very important because this is the first in-person after Covid.

Our members are very excited to join this one, including the American chamber. I can talk later about our own participation in the number six.

So this is very unusual. Usually, countries focus on exports. This is probably the only major expo that actually focuses on imports. So it tells you a lot about the commitment to opening up the China market to the outside world. And that's probably why our companies have been very active in terms of participating in CIIE, both for products as well as for services.

HOST 05:20
Henry, could you please also share your CIIE experience with us?

Henry Osvald 05:28
Definitely, this exhibition, like Eric said, is probably the only one that combines the public and private sectors for Brazil. But China is the main trade partner. Everybody's really excited to come back here. The main governments in Brazil that export commodities such as mining, food, and open-paper products, will be attending the exhibition with hundreds of entrepreneurs. The main companies, of course, have their own booths, and the Brazilian Export Agency also has a big booth with the government and companies that are coming here.
So for sure, everyone is very excited. And just like Eric said, the first one was very impressive. I think President Xi had an extremely great idea, because, you have diplomacy, because you have countries from all over the world, you have all the provinces in China, and then people from other countries. They have the chance also to discuss business with remote provinces like Tier 2 and Tier 3 cities, which they have no idea how much buying power they have. And that's sort of for sure everyone is very excited.

HOST 06:41
Have you observed any cases of Brazilian companies that had regarded CIIE as the first step to go into the Chinese market?
And then the CIIE plays an important role in drawing more and more investment from the Brazil side.

Henry Osvald 06:56
Definitely, especially small or mid-sized companies, which even they'll have their own structure here. So they come together with the persona export agency apex. They end up making very good contacts which later follow up and send a mission of their own.

HOST 07:16
So the outcome of the CIIE is not only a focus on the 6-day exhibition but the whole year?

Henry Osvald 07:25
Definitely. A lot of people came before and stayed after that also to discuss business and we'll be coming later. So I have no doubt that this will be the opening for more business to come.

HOST 07:36
During the past 5 years, I've interviewed a lot of companies that have been participating in CIIE for 5 years, (they are) old friends of CIIE, and I know your company is one of them. Could you please share with us why your company keeps such a continuous passion for CIIE?

Ulrich Stefer 07:56
That's absolutely true. So, personally, I have witnessed four times the CIIE but the association of Bayers with the CIIE in China is much longer. So our history in China goes back more than 140 years. We develop deep roots. And, our commitment is really to address the needs of patients and consumers, and farmers. And the same loyalty we have seen also, in short, for the CIIE for us, it's really to harvest the benefit of the CIIE. And the CIIE has been more specifically in the areas of collaboration, cooperation, and innovation.

What that means is that, in the context of the CIIE, we have the opportunity to meet partners from different angles, consumers, and patients to give us feedback to help us really understand not only fast-moving China but also the dynamic industries we are in beyond the benefits in cooperation, as I mentioned.

So it's good to see ideas turning into action. And, in the context of the CIIE, we've concluded more than 20 cooperation agreements with local partners from academia, but also from China partners, for example, and the key of the CIIE is also to demonstrate innovation.

And innovation is the DNA of us. For us, it's always a pleasure to show what we can contribute from prescription drugs to self-care, but also to bring crop science to the next level as we demonstrated. Over the 5 years, hundreds of product solutions and technologies of our portfolio in the CIIE. So pick a bunch of benefits and that's why we are extremely looking forward to participating the next time as well.

HOST 09:40
In Shanghai, we have dozens of global exhibitions in several industries like the food industry or the chemical industry. So I wonder what's the unique feature of CIIE that companies can't miss?

Ulrich Stefer 09:54
All of them are very important and it has specific features. But here it's really an inclusive platform that brings together parties from across the countries and where we have all the participants from all areas. Patients and consumers provided us with good input. But also in the next minute, we have representatives from provinces, for example, or channel partners, the exposure, the level, and the profile of the CIIE are unique, and specifically, the international context is very, very beneficial for us.

HOST 10:37
My next question is for all of you. We know we are facing some challenges like a slowdown in the global economy, and also geopolitical tensions, and also the wave of anti-globalization. Will this affect CIIE or, given that background, is CIIE playing a more important role?

Ulrich Stefer 11:02
I guess it's getting even more important. So I guess the importance is to communicate and to bring people together, and, for us, as a company active in prescription drugs or self-care and crop science, it is our commitment really to address the needs of patients and to help people take care of their health and also to demonstrate how we can bring agriculture to a more modernized level or to address megatrends like green develop development or regenerative agriculture.

So I guess in these times of volatile economy, such a platform and communication is even getting elevated importance.

Eric Zheng 11:45
I think we're still trying to recover from Covid, right? So the entire world is actually going through that recovery process. Plus on top of that, we've got political, geopolitical tensions as well. So I think this is the time that certainly China could demonstrate its value, right? China continues to be a key growth engine for the world, accounting for more than 1/3 of the total growth. I think having CIIE as a platform to demonstrate to the world that this market remains very open to the outside world. And I think certainly china is focusing more on the domestic circulation part of its economy. Certainly, exports remain to be still very important at the same time. I think the dual circulation now, right? External versus internal circulation. Those are two growth engines for China in itself.

So I think it's a great platform to demonstrate to the world that China remains open, (and) welcomes products from around the world. And we all know that, as Eric pointed out, this is a very, very important event supported by Beijing, by the central government, by President Xi himself. He actually came up with the original idea, and then he actually is deeply involved in making sure that CIIE would be a very successful exhibition.

So I think it's a lot more than selling products and services that this symbolic meaning that China will remain open to the outside world and will continue to be a growth engine for the world economy.

Henry Osvald 14:06
Yeah, definitely. The exhibition itself brings together a lot of governments and helps a lot with diplomacy. And like I said, it's probably the only place where you don't need to have missions traveling all over China and in each and for Brazil itself, all the governments, they can have discussions there. Brazil just got a new government this year. President Lula has a great relationship with China previously. He just reinforced that we just want to strengthen this, all the business, all the diplomacy we have within the country.

So I'm sure it's gonna be very, very promising where everybody is really looking forward to.

HOST 14:47
What do you see as the spillover effect of the CIIE?

Eric Zheng 14:53
For us, certainly, we're going through some tough times as far as the bilateral relationship, right? And we represent the American business community, and we want to continue to do business in this part of the world, in China. And many of our companies have been here for decades. And we want to make sure that U.S. companies will continue to do business successfully in this country. This will be a good opportunity for us to demonstrate our commitment to this market, and also it's an opportunity for China to demonstrate its commitment to remaining open to the outside world.

For us, this year, in the past 5 years, our big companies have always been very active, right? In CIIE, we think that there is a need for us to be more supportive of smaller companies. Because at the end of the day, the U.S. economy is driven by SMEs, right? People talk about Fortune 500 companies, but the economy itself is driven by SMEs, so this is our mission this year, which is to support SMEs (Small and Medium-sized Companies) to come to China. What we are trying to do, as this is the first time that we actually have a U.S. booth representing American products with a focus, (for the) first time, with a focus on food, beverage, and agricultural products. And those companies are very interested in the China market, but so far, they have not been able to do that.

As Henry pointed out earlier, for smaller companies, it's not easy to set up your infrastructure in China. So American Chamber this time, by working closely with the U.S. government, I'm talking of the agricultural department of the U.S. government, so we're gonna bring trade associations, right? Representing food and various kinds of wines and so forth and agriculture products, as well as different U.S. States, such as California, Georgia, Idaho, and so forth. So by working with individual states and then trade associations, we try to have a bigger impact on helping small and medium-sized companies to come to China. This year, the focus is on agriculture and food products. But hopefully next year we'll bring other companies to China as well. So for us is the first time we have a so-called "U.S. Pavilion". It's a booth, not as big as a bear, but, nevertheless, it's the first step.

This is the first time. Because food and agriculture products are quite popular in this country, U.S. companies are trying to figure out how to market their products to China. So this is the first time. I'm sure we'll continue to do that for other products as well in the future.

Henry Osvald 18:24
I think from the Brazilian perspective, even though the market is going through a recession, but we are facing a global challenge in terms of interest rates. And for Brazil, this is actually one of the main points that consumption has been coming down, which, on the other hand, China, I guess, has one of the lowest interest rates in the world, which means consumers do keep buying.

And this is also one of our main goals to help these SMEs to look for opportunities here and also learn with China on how to add value.

So a lot of these companies who are coming here are looking for technology to add more value locally in Brazil. Brazil is the largest commodity producer, but we also need to add more value for that. I'm sure all the technology (and) everything we can find in CIIE here, will benefit a lot of the country.

HOST 19:20
Mr. Stefer, what do you think of the spillover effect? 

Ulrich Stefer 19:37
In the context of benefits, I was talking about effects, and you might even call them spillover effects. So there are substantial impacts we have through the CIIE and I was highlighting the collaboration to really understand how China is moving, what are the dynamics of the industry? That's one. You look also at megatrends and you might have in mind demographic changes or urbanization of people moving to the city developed maybe also different diseases, cardiovascular diabetes. So the exchange with partners here helps us to understand these trends and how we can best cater to these trends.

Also in terms of societal initiatives which means Healthy China 2030, for example, or modernized agriculture, these are exchanges really important for us in the context of the CIIE. And looking at China, let's say, also targeting higher quality growth, we believe one substantial element is all innovation. It's based on innovation. And that's what the CIIE is about. That's what Bayer is about. The DNA of Bayer is, is innovation. And, for us, it's really important to keep the changing preferences of consumers, patients, and farmers in mind at present.

HOST 20:57
Last but not least, the question is, as you just mentioned, that this year, CIIE will be the first exhibition that completely returns to be in-person. So what are your expectations and highlights? Like you just mentioned a little about the U.S. Pavilion. And what's more?

Eric Zheng 21:16
For us, as I pointed out earlier, this is the first time that we will host a U.S. Pavillion as the first step and jointly, by the way, with the U.S. government.

So this is a very positive message to send given the current difficult environment, right? As far as the bilateral relationship. I think both countries are trying to find a way to work together. And I think commerce and trade and those are certainly the right areas to focus on. And I know many states in the U.S. are very interested in doing more business in China. They're all very interested in figuring out a way. This is a win-win strategy for both sides. The two countries do compete in many areas, at the same time, we hope that the two countries can find a way to work together. It's a win-win, not a zero-sum. I think CIIE is a great platform. Trade, hopefully, investment, at some point, those are areas the American Chamber has been involved, deeply involved, and myself included. We're trying to promote bilateral trade and commerce. So hopefully, the two sides can figure out a political relationship. But for businesses, we want to focus on what's best for both countries. So I think CIIE is a great platform for us to achieve that.

Henry Osvald 23:07
Yeah, Brazil, our vice president actually will be here together with some governance, so that shows really the importance of the affair. Brazil is also putting a lot of effort into BRICS, which is helping at the investment in the entire Latin America, not only Brazil with our former president is actually running the bank here.

This really shows how much we want to strain further this relationship, which we are not only already the largest trade partners, but we want to expand it. And then in terms of diplomacy, we know also China is quite interested in investing in infrastructure and energy sector. This is a very important point for Brazil: decarbonization in energy. A lot of Chinese companies in that sector moving to Brazil. So that's also something that the governments are looking into it here to look also for for investment on infrastructure and logistics, transportation, technology, which will help for sure Brazil to expand.

HOST 24:12
Thank you.

Ulrich Stefer 24:14
The first CIIE in post-pandemic would be absolutely exciting to have a nonrestricted interaction. We love to look forward to seeing all the people coming to our booth and then exchanging information. China is growing and we together grew. And this was a bit of demonstrated by our footprint at the CIIE so we have healthcare booths in the life science area, but we have also separate agricultural booths. So we are growing there. And once again we want to demonstrate it is the solution technologies and the latest products and what we can contribute to constantly sustaining the growth going to the future.

HOST 24:55
Thank you for sharing your experience stories and also expectations for CIIE.  See you next time.

Ulrich Stefer 25:05
Thanks.

HOST 25:07
Thank you. Looking forward to seeing you at the venue of the CIIE then.