Posted by
Barry Siskind
Community Manager
In China, the average worker earns a minimum wage of 800 Yuan (the equivalent of $ 123.00 US per month). Low wages and a large workforce have resulted in China becoming one of the fastest growing economies on the planet…in spite of the recession.
Recently the government implemented an increase in the monthly wage to 960 Yuan. In real dollars not a lot, but significant in a country where the cost of a latte from Starbucks is 25 Yuan or half a day wages. When you multiply this increase by 1.2 billion the number is staggering.
This may very well be the first step in raising the standard of living in China. Better wages will mean higher demand for products but at the same time will have a negative effect on the corporate bottom line.
Could this be the beginning of a trend in China? If it is, what might the effects of this have on the exhibition industry?
The trend is obvious. There will be a substantial increment of workers’ wages in the manufacturing industries of China. I expect quite a number of small and medium size factories for exports will have to shut down as there is no way they can transfer the cost increments to the international buyers with the weak US/European consumer market.
China will be more determined to push for the industry restructuring . That is lessen the reliance on export business to maintain a high GDP growth, but rather promoting more value added R & D, design , build up their own brand labels and to exercise a stricter rules on enviromental protection and energy saving.
To compensate for the lowering of export business, the Chinese Government is giving many incentives to trigger a higher domestic consumptions . The Government is also tackling the problems of high property price, unaffordable medical services and educational costs as these problems are the main worries of the consumers.
The result is yet to be seen . However, the road ahead will be bumpy and diffcult amidst the pressure for a higher RMB exchange rate and the growing protectism from US.
Greetings from Shanghai!
I am attending the annual IFES (International Federation of Exposition Services) meeting here in Shanghai this year.
The state of the exposition industry in China was discussed as weel as trends.
The number of exposition facilities and space occupied is now near that of USA and Europe.
Get ready and be prepared for more world events to be held here! A local trusted partner is my best suggestion.
Cost of participation is very reasonable and surprisingly the quality of exhibits is as good as anywhere in the world.
We have visited the World Expo now for 3 days and I still have only seen about 1/2. Largest World Fair ever!
Construction on buildings started 2-3 years ago and interior completions were done in past 4 months.
Event is incredible on large scale with high technology in each pavilion. Our USA pavilion was modest compared to many. Canada was fantastic.
Labor calls were a strain in the past 3 months due to demand. Some pavilions did not open on time!
Crowds are tremendous! Some people wait in line 4-6 hours to enter a single pavilion!
Fortunatly we arranged for VIP tours to pavilions each day but still waited a while to enter.
Food has been terrific! Every country pavilion had their local beers available which helped to deal with the extreame heat and sun. Smog is very thick here and sun screen is needed.
I plan to prepare an article on highlights of our meetting when I return next week.
Kneehow!
We have seen the world over that the increase in wages has always resulted in the raising the standard of living.
This will have a direct impact on the exhibition industry since the corporates will try to woo the consumers as well as the industry with their products. This is good for the industry though this might lead to inflation.
You have picked up on an enormously important trend Barry. We are in the early stages of a huge transition from China as a driver of consumption in the traditional developed markets through having driven down manufacturing costs to China as the consumer.
Look at auto shows: as events for that industry were cancelled or massively reduced around the world, China’s shows boomed. The reason was simple. China is now the world’s largest auto market. I visited the recent Beijing auto show and it is really a world class event with every major brand represented with enormous booths and huge investment.
We all have to learn how to sell in China to Chinese buyers. It’s an exciting time and really does represent a new and important opportunity for every company in every sector. And, the exhibition industry will surely be playing a critical role in helping to boost this development.
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