Chen Xianjin: Thoughts on the MICE Industry in light of the COVID-19 Pandemic

The coronavirus outbreak is spreading further across the world. This poses us the pressure of external defense and internal defense rebound. This reality has postponed the comprehensive recovery of the MICE industry and revealed many underlying problems in the development of our industry. We need to address such challenges with a sober mind. While staying at home, we have more time to think. In the WeChat groups, many friends of MICE industry have expressed their ideas about how the industry developed in this special situation. Here, I would like to share with you some of my thoughts.

Have a thorough grasp of “once-in-a-century changes”

President Xi Jinping pointed out at the BRICS Business Forum in July 2018 that, “We are witnessing major changes unfolding in our world, something unseen in a century.”

I feel that under the current situation, we need to understand President Xi’s judgment very seriously.

So many events, big or small, have happened over the several thousand years of human history. “Major changes unseen in a century” are not about a specific event, instead refer to many factors, gradually accumulating, and finally reaching the critical point of a major social transformation. Such transformation is unprecedented in a century, but what triggers this kind of major transformation is often a specific matter, regarded an event as “once in a century.”

The current coronavirus pandemic is a case in point. This devastating outbreak has seriously affected our social life and the the global economy (in a way we have never seen before and, I believe, today’s growing young generation as dominants of the future world will hardly see again). Dr. Henry Kissinger said that “the coronavirus pandemic will forever alter the world order”. Behind this, however, are many factors that shape the international political and economic order including globalization, Sino-U.S. relationship, and the disconnection between the real economy and the virtual one. It is such factors, along with the virus, that have upended lives and economies.

For our MICE industry, following the above understanding of “major changes unseen in a century”, I think we need to think about such a question: Have we been too optimistic and simple about China’s MICE industry over the past decades? On the surface, the current pandemic hinders the development of the industry. In fact, many underlying factors (such as the value of the MICE industry, government-business relationships, reshaping of the confidence of exhibitors and visitors, the MICE theoretic system and talent structure, technology’s double-sword effect on the industry and improvement of enterprise chain) were previously covered up. The coronavirus is a catalyst to promote these factors to be exposed. We seem to have encountered a sudden attack, lacking the necessary preparation.

Therefore, rethinking is particularly needed in a time like this.

Correctly estimate the value of the MICE industry

There are many underlying factors in the current plight of our industry. Here I will talk about the value judgment of the MICE industry.

Being a member of the MICE community, I really hope that the cause we’ve been engaged in could be of great value. But to be realistic, the status of this industry exists objectively. It cannot be elevated at random with our invigoration or more support policies.

First, the MICE industry is a service industry. Its ups and downs ultimately depend on the prosperity of the client. We often say that the MICE industry is a barometer of the economy. In other words, it reflects the actual situation and developments of the economy as a whole. At present, the manufacturing and service industry have been severely affected by the coronavirus. The disrupted mobility and logistics systems impede normal production and services. The political and economic ups and downs in the world have seriously affected our foreign trade, which has worsened our economic situation. As an old Chinese saying goes, “With the skin gone, to what can the hair attach itself?” Under this situation, the MICE industry in general would be unable to buck the trend when the overall economy is not in good shape. On the surface, the current pause of the exhibitions is due to the need for epidemic prevention and control and vigilance against the risk of high-density crowd gathering. The deep reasons reflect the low economic situation. In fact, we’ve seen that the cancellation of some exhibitions was not due to pandemic-related restrictions on group activities, but because of the survival problems of the companies themselves. In light of this, we must work hard to recover the current business while formulating further strategies from the perspective of the service industry.

Second, this pandemic force us to reexamine the relationship of the MICE industry with other services segments. We’ve been saying that “the MICE industry has a driving effect of 1:9.” Such an effect has indeed been proved by some input-output models. However, in essence, such driving effect is mutual. Large scaled exhibitions and conventions do stimulate catering, accommodation, travel, tourism, shopping and entertainment, among other segments, but other services industries exist for their own reasons, not necessarily relying on the MICE industry. This pandemic has hit the MICE industry hard, but we did not see a 9 times loss in tourism, commerce, transport, hospitality, catering and other industries. On the contrary, these industries are still making efforts to work resumption, the government and society have higher expectations for these industries than the MICE industry.

The analysis of the two points above are by no means intended to discourage our industry. What I expect is a reasonable guidance to the development of this industry and thinking from an objective perspective. We need to correctly judge the inherent, fundamental value of the MICE industry as a barometer and a platform that integrates production factors, and study the development direction of the industry.

Physical MICE projects are still the hard truth

There have been many discussions on when MICE projects resume will. Government departments have held meetings to listen to professionals’ voices. And to some extent, there are signs of uncertainty. Some experts also put forward suggestions to supplement offline exhibitions with online exhibitions. A few days ago, we finally heard the decision to launch the Spring Canton Fair 2020 online.

Nevertheless, I think we must create necessary conditions and coordinate with relevant parties to resume the offline exhibitions, i.e., physical exhibitions as soon as possible.

First of all, whether it is theoretical analysis or practical cases, it is proved that virtual space would never replace face-to-face contacts among people. Online and offline exhibitions must support and complement each other. Online communication is for face-to-face interactions. The decision of the Spring Canton Fair 2020 to go online was only due to the pressed timetable, the task of foreign defense input, and the subsequent preparation for the Autumn Canton Fair. Therefore, the online fair this year is supplementary to the physical model of Canton Fair that has lasted over decades and can hardly replace the offline one for a long time.

Secondly, only the physical exhibition can form an enterprise ecosystem chain. Physical exhibitions have to do market surveys, go through a full range of processes from planning, investment, exhibition, design, move-in and operations, and need the support of logistics, human resources, finance, insurance, commerce, transport, advertising, and media. The resumption of physical projects as soon as possible can bring a large number of SMEs back to life. As a special reminder, a business enterprise, like the human body, has a critical point in its course of life. If they lack the living conditions, they will pass the critical point and enter the stage of disintegration. Even if the conditions are recovered, they can no longer be active. From this perspective, physical projects including offline exhibitions are an important prerequisite for maintaining China’s economic ecosystem. If our conclusion is that online exhibitions will never replace offline ones, it is not only economically significant but also socially ethical to ensure the survival of the countless small and micro enterprises in the MICE industry and let them survive.

In addition, from a broader perspective, this pandemic reminds people the importance of the real economy. A quote from Karl Marx says “It is clear that the arm of criticism cannot replace the criticism of arms. Material power can only be destroyed by material force.” All human activities must ensure the survival of human beings, and the survival of human beings is first and foremost a material foundation. The virtual economy serves the real economy. The operations of capital must be beneficial to agriculture, construction and manufacturing to be valuable. So far, the most eye-catching commodities in international trade are masks, ventilators and test kits. Next in line should be equipment and machinery necessary to resume production, and strategic goods crucial to national economy and people’s livelihood including grain and crude oil. This is a warning: A big country must have its own complete industry entity system and may not totally rely on other countries for the supply of physical goods. This tells us that the status of physical exhibitions will not be disrupted due to an epidemic. However, the innovation of such physical exhibition must not be delayed. It is time to get this industry rid of the long-term criticism for being “conventional and not reform-minded,” which of course is another major topic.

By | 2020-05-06T13:34:25+00:00 May 6th, 2020|All|0 Comments

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