Asia: Why all eyes are on the Pacific Rim

Adam Woods examines what Asia's economic resurgence is likely to mean for the events industry and finds that China is set to become a key player.

Exhibitions aren't necessarily the cornerstone of China's ongoing emergence as a global trading power, but the vast expansion of its event market leaves us in no doubt that China's 21st century economic boom is not just about manufacturing.

While Japan is still the most valuable market in the region, China now has the biggest exhibitions business in Asia in terms of volume and is attracting a far more international collection of shows than its more domestically-focused island neighbour.

The Asia-Pacific office of the UFI estimates that China now has as much exhibition floor space as Germany and accounts for roughly 70% of the total for the entire Asian continent. "We count about 70 modern, purpose-built exhibition centres in China, with a total space of 2,500,000sqm," says Paul Woodward, regional manager of UFI Asia. "That is against a total of about 3,500,000sqm in the whole of Asia, so the numbers are pretty enormous."

From the perspective of incoming exhibitors and exhibition organisers, mainland China is both a cheap alternative to longstanding destinations such as Hong Kong, Japan and Singapore and a surging market the international business community urgently wants to get to know better.

So while the language and culture of China are not much more accessible to Western travellers than those of Japan, for instance, Woodward believes we are all "prepared to make the extra effort" to do business in China because the country offers such heady potential for trade.

The dissolution last year of laws preventing foreign investors from wholly owning Chinese companies means Western exhibition organisers no longer legally require a Chinese business partner to operate in the territory.

But in spite of the fact that almost every major city in China has either a new or substantially extended exhibition venue, Western companies are most likely to find themselves in one of the three largest mainland centres - Beijing, Shanghai or Guangzhou.

The Chinese government has faced a battle to control the pace of building projects in recent years, though there was certainly a need for improved facilities. Two years ago, the 60,000sqm China International Exhibition Centre (CIEC) - Beijing's largest - was staging an exhibition every three days to keep pace with demand. Accordingly, foundations were laid for a new 200,000sqm exhibition centre in Shunyi District, north east of the city near Beijing Capital airport, which is scheduled for completion in 2006.

The array of domestic and regional events taking place right across the Chinese market is breathtaking, and many of the largest are by no means new. Guangzhou is home to the single largest exhibition in Asia, the twice-yearly Canton Fair, which is almost 50 years old, attracting 100,000 visitors and 27,000 exhibitors, who come to deal in a vast range of Chinese goods for export.

Given that the organisers are said to have a waiting list of up to 50,000 potential exhibitors, it is no surprise that Western companies want to see what China has got. "Because of its size and the number of people, everybody is very focused on China," says Woodward.

In spite of the vast and growing shadow mainstream China casts across any discussion of the Asian exhibitions market, it is only fair to point out that the entire region is experiencing good times. According to the most recent UFI figures, net area increased by more than 20% between 2002 and 2003.

With rates that are routinely higher than those on the mainland and a more Westernised atmosphere, Hong Kong remains more profitable than China's mainland from the point of view of exhibitions. But it also has the most to lose as the rest of China develops its international connections.

Cliff Wallace, managing director of the Hong Kong Conference and Exhibition Centre (HKCEC), says: "Certainly, long term, we think (China's economic growth) is going to attract more business to the region, and therefore we will benefit from that.

"Right now, it diverts some attention from Hong Kong. China has a little bit more sex appeal because people are looking to go to places they haven't been yet. There is a mystique about China, and rightly so."

HKCEC stages around 2,000 events a year, of which 100 are large exhibitions and, rising competition notwithstanding, the economic indicators are good.

"The market is strong now," says Wallace. "There has been quite a rebound following 9/11 and the Asian economic crisis and SARS and bird flu. The market has not just stabilised but returned to what we think is a very strong status, and we are back in our growth curve."

Asia's business travel industry has indeed proven to be exceptionally hardy in the face of such inclement conditions. In fact, throughout the past few years, levels of investment in exhibition and conference facilities have been almost dangerously high. So much so, that the major issue for most countries moving forward is likely to be one of over-supply, after years in which, with exceptions, the infrastructure has been lacking.

One consequence of the rapid growth of the Asian exhibition infrastructure and the stiff competition for business is likely to be the emergence of new consumer events - particularly in China, Hong Kong and Singapore, and most likely in the entertainment sector.

Woodward says: "Up until the last two or three years, the shortage of space in most parts of Asia has allowed centres to fill themselves up with business-to-business trade fairs that pay top dollar. Now that has flipped around very quickly, there is much more opportunity for the organisers of consumer events to do deals with venues."

In Hong Kong, as in mainland China, capacity is growing particularly fast. A second major exhibition centre, called Asiaworld-Expo, is due for completion at the end of this year, with 70,000sqm of rentable space on a site within the city's international airport. Asiaworld-Expo deputy CEO Allen Ha believes the centre is the only one in the world to be part of an airport; the centre has showers and other facilities for those flying in, and visitors can walk straight in from the arrivals hall.

The complex has close to 25 events booked for next year, including ITU World Telecom, which is transferring from Geneva.

"We did a calculation and the average size of our shows is about 20,000sqm, which we consider to be quite a sizable exhibition by international standards," says Ha, who notes that many of next year's events will be Asian extensions of established Western brands.

He adds: "What we are seeing is that people are taking advantage of Hong Kong and the new facility to launch Asian versions of regional and global events, and to leverage the Chinese market."

Singapore is Asia's other major exhibition destination and it, too, is in the throes of expansion. Overall, it welcomed 8.3m business and leisure visitors last year, and the Singapore Tourist Board (STB) has set a target of 17m visitors and total tourism revenues of 30bn Singapore dollars (£9.8bn) by 2015.

A key element of that growth is in exhibitions, and to date the STB's two-year-old Make It Singapore campaign - which offers incentives to exhibition organisers, and was recently superseded by the revised Make It Singapore Plus - has attracted about 40 events and generated an estimated 50m Singapore dollars (£16.4m) in tourism receipts.

The largest of the country's venues, the 60,000sqm Singapore Expo, is in mid-expansion, and by August, it will have a further four halls and 40,000sqm more space. Meanwhile, the Suntec Singapore International Exhibition & Convention Centre downtown has 22,000sqm, and next year will host the annual meeting of the International Monetary Fund and the World Bank Group.

Singapore already has its share of enormous events. The biennial Asian Aerospace fair, the third largest aerospace and defence industry event in the world, will return to the Changi Exhibition Centre in 2006, having attracted almost 27,000 delegates in 2004. In October, the second Asian ITMA - a mirror image of the vast European textile industry event - takes place at Singapore Expo.

"The mood in the exhibition industry in Singapore today is a lot more upbeat compared to the last few years, with the downturn and the various other problems the region faced," says Shaun Goh, director of strategic clusters two for the STB's Business Travel MICE Group. "From here, the industry is looking for growth and our ambition at the Singapore Tourist Board is to make Singapore the leading exhibition and convention centre in Asia."

And it is not only the major business centres which double as key Asian exhibition destinations. Vietnam, Sri Lanka and Indonesia are all experiencing notable growth. Tiny Macao has also recently emerged on the radar, largely as a result of a massive investment from hotel giant Venetian, which has chosen the island as the site for a replica of its eponymous Las Vegas flagship, complete with 100,000sqm exhibition and convention centre.

Thailand, while not quite such a dark horse as Macao, is another important market to watch. Since the late 1990s, Bangkok's roll call of exhibition centres has risen from one to three, and available floor space, which now stands at 200,000sqm, is due to hit 330,000sqm by 2006. The IMPACT Centre will be one of Asia's largest when its ongoing extension work is completed, while the city's new airport, scheduled to open in September, will drop another important piece into the jigsaw.

"Thailand is growing very, very fast," says Woodward. "It is beginning to become competitive for South-East Asian regional events, rather than just Thai events."

Last year, the Trade Exhibition Association of Thailand (TEA), hosting the UFI's annual congress at the Bangkok International Trade and Exhibition Centre, revealed that Thailand saw a 64.5% increase in convention delegates and a 19% rise in business travellers in the first seven months of 2004.

TEA president Charnchai Svangsopakul spoke of "the readiness and potential of Thailand to become a favoured venue for the international exhibition industry in this region", and added: "When you realise that trade fairs in Thailand represent revenue of over 7.5bn baht (£100m), you realise how important this industry really is."

That is a realisation which has been lost on few countries in the entire region. Even at these early stages of its broader development, and with China still to show its full hand, the exhibitions market in the east is moving closer and closer towards the middle of the map all the time.

ITMA ASIA

ITMA Asia, the textile machinery trade show due to be staged in Singapore for the second time from 17-21 October, is a prime example of a successful Asian event which has been launched on the back of an established European brand. Though ITMA Europe has been running for more than 50 years, the first ITMA Asia took place in 2001, attracting 802 exhibitors and 29,195 visitors from 67 countries.This time, the event is expected to bring in 50,000 trade visitors over five days.

ITMA, owned by the European Committee of Textile Machinery Manufacturers (CEMATEX) and organised by MPI, has worked closely with the organisers of the concurrent Singapore Fashion Week to weave the two events together, creating an industry panorama from raw materials and machinery right across to completed apparel and high-end fashion design.

According to Simon Dakin, sales manager of Stockport-based textile testing equipment manufacturer SDL Atlas, doing business in a modern, well-appointed city like Singapore is a trouble-free experience. "ITMA is a very big, very slick organisation and Singapore is a very modern city, very clean," he says. "The people that travel to exhibitions tend to be fairly high up in the management structure, so there is no problem with language or anything like that. When you are doing a similar exhibition in Pakistan or Bangladesh, you do get these problems.

"I cover the Middle East as well, and we do a show there which is very successful for us business-wise, but you have got wagons still coming in carrying big machines on the first day of the exhibition when you should be trying to sell your products. We have a base in China too, and the general experience of exhibiting out there (in the Far East) is very good."

ASIAN AEROSPACE

By far the largest event to take place at the Changi Exhibition Centre, and one of the key events in the international aerospace calendar, Asian Aerospace certainly beats most comers when it comes to the value of the orders placed at a typical exhibition.

"It is the third biggest air event in the world, after Paris and Farnborough," says Shaun Goh, director of strategic clusters two for the Singapore Tourist Board's Business Travel MICE Group. "In 2004, just the event itself saw $3.52bn (£1.9bn) worth of deals signed over four days."

Asian Aerospace itself is a joint-venture company between Reed Exhibitions and Singapore Technologies Engineering Ltd. It returns to Singapore from 21-26 February next year, when - if the 2004 event is any guide - the civil and military aviation industry's latest innovations will be set out for the perusal of around 27,000 visitors from 78 countries.

With 759 exhibitors in 2004, Asian Aerospace might not outwardly appear to be quite the giant it is, except for the fact that, in addition to the 20,522sqm of indoor space it takes up, it requires another 175,059sqm outdoors.

Fixed and rotary aircraft will be on display, along with missiles, weapon systems, satellites and space systems. The special technology focus for 2006 is on unmanned aerial vehicles (UAVs) and, for the man who has everything, unmanned combat aerial vehicles (UCAVs).

Next year's event also incorporates two other co-located events: the Asian Defence Technology Exhibition and Conference and the Asian hub of the International Training and Simulation Exhibition and Conference.

The former connects international defence contractors and manufacturers to government executives and high-ranking military officials from around the world, while the latter focuses exclusively on commercial and defence training and simulation.


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