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Cablegate: China Sme Fair: Italy Comes On Strong

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RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0513 2650157
ZNR UUUUU ZZH
R 220157Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 3747
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS GUANGZHOU 030513

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD CH
SUBJECT: China SME Fair: Italy Comes on Strong


(U) This message is sensitive but unclassified. Please handle
accordingly.

1. (SBU) Summary: The Third China International Small and Medium
Enterprise (SME) Fair, co-hosted by Chinese and Italian governments,
brought a wave of Italian businesspersons, entertainers, and
government officials, including Italian Prime Minister Romano Prodi,
to Guangzhou September 15-18. Though the SME Fair is only three
years old, it has quickly become a quality event, with an impressive
organization and a high level of public and official interest. End
Summary.

A New Fair for Guangzhou
------------------------

2. (U) Guangzhou held the first China SME Fair in 2004, with the
cooperation of the Hong Kong Trade and Development Commission and
the Macau Trade and Investment Promotion Office. In 2005, fair
organizers looked further afield and selected France to co-host and
sponsor exhibitors. Italy was chosen as the co-host this year, with
Germany, Japan, and Thailand reportedly expressing interest in
sending delegations in 2007. The Chinese government organizers are
the China Banking Regulatory Commission, the National Development
and Reform Commission, the Ministry of Commerce, the Ministry of
Finance, the State Administration of Industry and Commerce, and the
Guangdong provincial government.

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3. (U) The fair was held in Guangzhou's new exhibition center in
Pazhou, which is also the site of the Canton Trade Fair. The
majority of the exhibitors were Chinese SMEs. Hong Kong, Macau, and
(this year) Italian SMEs also received a generous amount of space.
In addition to the numerous booths operated by SMEs, some large
companies, such as China Mobil, AIG, and Citibank, used the event to
build their SME customer base. Citibank advertised its
loan-management and finance services. Seminars on SME financing,
cooperation projects, procurement, and training were held
concurrently for attendees. The fair reportedly included 3,970
SMEs, 948 of which were foreign.

Italy Brings a Show
-------------------

4. (U) Italy made a strong showing at the event, highlighted by the
presence of Prime Minister Prodi and several ministers. (This was
Prodi's first trip to China since becoming Prime Minister. In
addition to Guangzhou he visited Nanjing, Shanghai, and Tianjin.)
The Italian delegation included 714 Italian businesses and 1,400
Italian businessmen, a significant improvement over the French
showing last year of 160 companies. The Italian exhibition area was
divided by geographic region and had displays promoting Italian
furniture, food, automobiles, pottery, and biotechnology. In
conversations with Congenoffs at the first night reception, a number
of Italian businessmen indicated that they saw niche markets in
China as the wave of the future for Italian enterprises.

5. (U) During his remarks at the opening ceremony, Brodi expressed
concern over the lack of market access in China's distribution
sector, lack of credit availability, and IPR infringement. Vice
Premier Zeng Peiyan and Guangdong Party Secretary Zhang Dejiang
spoke of the benefits that SMEs contribute to China's overall
economic development. Italian musicians, including a military
orchestra and opera singers, performed at prominent Guangzhou venues
throughout the weekend.

Comment: Worth Watching
-----------------------

6. (SBU) Guangzhou loves to host trade fairs, and in the busy fall
season there are weekly events, with products ranging from gems to
bags to shoes. The China SME fair is new, but is off to a strong
start. The amount of business these events generate for the
exhibitors is not clear - official statistics on the volume of
contracts signed are often inflated (reportedly RMB 42 billion or
USD 5.4 billion this year). However, the opportunities for SMEs to
meet Chinese officials and to display their products to curious
Chinese onlookers are likely worth the trip. The event is one that
U.S. SMEs might want to take a hard look at if they are to promote
their products in southern China.

GOLDBERG

© Scoop Media

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