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R 220157Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 3747
INFO RUEHOO/CHINA POSTS COLLECTIVE
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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. 
 
¶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