Download Research on the Sustainable Development of Government-led Exhibitions in China

Research on the Sustainable Development of Government-led
Exhibitions in China
PEI Xiangjun, YANG Liuhua
Zhejiang Shuren University
[email protected]
Abstract: Government-led exhibitions play an important role in the development of the convention and
exhibition economy in China. However, with its rapid development, many increasing impediments to its
further growth loom large. This article tries to analyze factors in the status quo of the government-led
exhibitions from the perspective of the dependence of resource, path and function. Meanwhile, it
explores the main problems of government-led exhibitions. Further, the article points out that the
government should give way to market entities as far as the operation of convention and exhibition is
concerned. There are four strategies to ensure the sustainable development of government-led
exhibitions. The first is to transform governmental functions to create an open and fair environment for
the sustainable development. The second is to define exhibition property right relationships to expedite
market operation. The third is to develop professional exhibition companies to ensure the professional
development. The last is to introduce third party exhibition evaluation mechanism to make sure the
healthy development of exhibition projects.
Keywords: government-led exhibition, convention and exhibition economy, sustainable development
1.
Introduction
The government-led exhibition refers to the exhibition activities held by governments as the main
organizer and supported by governments to provide resources. Government-led exhibitions are the
important parts of exhibition activities in China and they reflect the characteristics of Chinese
convention and exhibition economy. At present, the exhibitions include national, provincial and
municipal, district levels of governments. These exhibitions involve almost all industries such as the
auto, the steel, the agriculture, high-tech and new industries. The geographical layout of these
exhibitions is consistent with the economic stratified development pattern in China, which represents the
gradual diminishing tendency from major cities to second-tier city, from coastal areas to inland regions.
Some famous exhibitions of big scale and high influence in China are government-led exhibitions, such
as the China Export Commodities Fairs in Guangzhou, China Hi-tech Fair in Shenzhen, China ASEAN
Expo in Guangxi, etc. According to the statistics in the 2009 research report of China government-led
exhibitions edited by China Convention and Exhibition Society, government-led exhibitions take up
14.36% and 22.7% respectively in terms of the number of exhibition items and square meters of
exhibition area, in other words, they occupy two-fifth of the market share. These statistics show
government-led exhibitions have already dominated our convention and exhibition industry.
However, the very development pattern of government-led exhibitions emphasizes the governmental
allocation, pays great attention to social benefits instead of economic benefits of exhibitions, uses
administrative power to influence exhibition activities and relies on administrative commands to get
exhibitors and ignore professional organizing visitors. The dual role for the government acting both as
the referee and athlete in convention and exhibition industry is not conducive to the formation of just
and fair market competition order, nor to the basic function of market allocating resources, nor to the
sustainable development of the convention and exhibition industry.
Hence, despite the important position in the convention and exhibition industry development in China
held by the government-led exhibitions, there are many difficulties and troubles impeding further
development of government-led exhibitions. This article tries to find out some pragmatic measures for
the sustainable development of government-led exhibitions to overcome the limitations and
disadvantages by analyzing the origin and present situation of the government-led exhibitions.
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2.
The Analysis of Factors leading to Government-led Exhibitions’ Existence
2.1 Resource Dependence expedites the Emergence of the Government-led Exhibitions
The comprehensive convention and exhibition activities require not only human, material and financial
resources of exhibition enterprises but also the active involvement of other enterprises on the exhibition
industry chain such as exhibition centers, buildings and service enterprises. The success of exhibition
activities depends on the co-operation of other industries relative to exhibition industry such as tourism,
hotel, restaurant, traffic, transportation and communication as well as the coordination of other
government departments including public security, fire control, customs and so on. It shows that
successful conduction of exhibitions relies on the integration of numerous resources. For an individual
enterprise, it faces restrictions in conducting exhibitions because it lacks the capability to mobilize and
integrate all the resources. While the advantage of government-led exhibitions lies in mobilizing and
integrating all the resources easily through administrative orders. Governments can provide many
guarantees for government-led exhibitions. Government-led exhibitions can acquire service, finance,
customer and promotion guarantees by coordinating other industries and government departments,
providing operation funds. As government-led exhibitions could tap the supporting resources from the
governments, government-led exhibitions spawned in China.
2.2 Path Dependence Continues the Growth of Government-led Exhibitions
Making a comprehensive survey of the growth path of government-led exhibitions, one can see that the
existence of government-led exhibitions is contingent upon the initial condition where the exhibitions
emerged, and the initial condition orients exhibition growth, which testifies path locking leads to path
dependence.
The development process of government-led exhibitions can be divided into four phases the early
period after the founding of the People's Republic of China, the period around the Culture Revolution,
reform period and the period after WTO. In the early period after the founding of the People's Republic
of China, faced with the rebuilding of the ruined nation, government authorities organized pictorial
exhibitions to propaganda the experience of socialism construction in line with the current situation and
political policy. Around Culture Revolution, all exhibitions organized by governments presented our
nation’s economic construction achievements in order to boost socialism construction enthusiasm. The
most important event was the set-up of Chinese Export Commodities Fair in Guangzhou. After the
adaptation of reform and opening policy, our country transited from planned economy to market
economy and our economic construction gained momentum. Government also played the main role in
exhibition activities and government-led exhibitions at all levels increased considerably. After entering
WTO, government departments at all levels are enthusiastic about holding large-scale government-led
exhibitions to meet our nation’s foreign affairs strategy, such as China ASEAN Expo, China
Jilin-Northeast Asia Investment and Trade Expo.
It is seen that the gradual growth of our convention and exhibition industry is based on government-led
exhibitions. This path locking made government-led exhibitions play the exemplary and guiding role in
convention and exhibition market.
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2.3 Function Dependence Keeps the Existence of Government-led Exhibitions
Convention and exhibition economy has strong knock-on effect to promote industry, which means with
the development of convention and exhibition industry, other relative industries like construction,
tourism, restaurant, traffic, transportation, communication and so on will be promoted as well. The
convention and exhibition industry possesses multiplier effect
a single unit income contributed by
the convention and exhibition industry will bring several times income for other relative industries.
Convention and exhibition economy also has the social diffusion effect. The growth of convention and
exhibition industry, local pillar industry will be driven. Industrial structure will be adjusted. Foreign
investment will be expanded. Employment opportunities will be created and popularity for the holding
city will be enhanced. For example, 1999 World Expo held in Kunming makes it known as an
international popular city.
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Due to the functions of industries promoting effect and social diffusion effect, convention and exhibition
economy possesses very strong positive economic externality. The exhibition enterprises lose certain
amount of benefits because of the feature. It is impossible for exhibition enterprises to pay for economic
externality, so exhibition enterprises are unwilling to organize an exhibition under such circumstances.
On the other hand, economic externality of convention and exhibition drives government to encourage
the expansion of convention and exhibition industry because economic externality of convention and
exhibition can be internalized as the government gains finally, reflecting government administrative
success. Therefore, it is because the governments depend on promotion and social diffusion effect of the
exhibition industry that the government-led convention and exposition exist.
3.
The Main Obstacles for Further Development of Government-led Exhibitions
3.1 Weak Market Foundation
In order to promote local industry and local image, expenditures for holding government-led exhibitions
are borne by governments. Under this guideline, the operation of exhibitions is policy-oriented instead
of the market-oriented. A policy-oriented exhibition will ignore market research to acquire market needs,
so the theme, positioning and activity arrangement of exhibitions are far from satisfying the market
needs.
In general, a temporary institution will be set up or an enterprise will be appointed to handle
government-led exhibitions. People within these institutions and enterprises are short of experience in
marketing approach to exhibitions. Therefore, when the sales of exhibition booths do not go well, the
relative governmental departments will assign these booths to subordinate units and subordinate units
allocate their share to enterprises. The same mode will also be adopted in organizing visitors to
exhibitions, sometimes even irrelevant people are arranged to attend exhibitions only to round up
enough people. Government-led exhibitions force some domestic media to promote exhibitions free of
charge by exerting administrative pressure. Although some local leading enterprises attend exhibitions,
exhibitors and visitors accomplish little because not many professional buyers are available at the
exhibition. The success of exhibitions is to great extend related to the benefits exhibitors gain from
visitors attending exhibitions. The presence of enough professional buyers at the exhibition is the key to
attracting exhibitors who are the economic source of exhibitions. Without sufficient gains and benefits,
the exhibitions will find it hard to survive the competitive market if governments do not support it.
3.2 Insufficient Economic Benefits
One of the features of government-led exhibitions is that governments supply funds, human resources
and materials. These expenditures are often invested in receiving and serving honored guests at home
and abroad and relative leaders besides leasing exhibition space and building exhibition booths. Many
leaders of all levels attend the opening ceremony. They spend little on business and exhibition
promotion which actually needs funds. Two factors cause this expenditure pattern. First, government-led
exhibitions can do business based on administrative orders, thus reducing the difficulties in organizing
and spending less. Secondly, government will pay for all the bills and allocate funds next year
consistently whether the exhibition is profitable or not. In this way, many government-led exhibitions
ignore economic benefits of exhibition without conducting gains and losses budget and analysis. They
have no desire to strengthen self-improvement mechanism.
4.
Strategies for the Sustainable Development of Government-led Exhibitions
Now that it is necessary for government-led exhibitions to exist in the present economic structure and at
the current development stage of convention and exhibition economy, government-led exhibitions can
fulfill sustainable development goal via reforming and innovation to overcome the main obstacles.
4.1 Repositioning Governmental Functions to Create Favorable Environment for the Sustainable
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Development of Convention and Exhibition Market
As the main body in convention and exhibition economy, Governments participate in exhibition
activities. The dual role of the referee and athlete manifests the vague functions and positions of
government in this industry. This is self-serving and is contradictive to modern market law. Therefore,
governments need to reposition its function in convention and exhibition market in order to guarantee its
sustainable and healthy development. First of all, government should stipulate laws and regulations
governing convention and exhibition industry and promoting market norms to create fair and just
competitive environment so that convention and exhibition will not depend on the resources from
governments if government departments supply sufficient and attainable public services by building
infrastructure and security guarantee system, that is, they change the direct investment pattern into
indirect one. Investing in building infrastructure and security guarantee system instead of funding
directly in exhibitions can bring about more favorable environment for exhibitions. Thirdly, the effective
incentive mechanism should be drawn up to supervise and assess convention and exhibition activities in
order to promote professionalization and marketization for convention and exhibition activities.
When governments elucidate its functional position as the supervisor in convention and exhibition
market, the old frame of resource dependence which produces government-led exhibitions can be
broken, thus variant forms of organizers for convention and exhibition activities are willing to become
the market participants. With the gradual maturation of the market principals, governments will
withdraw from the market and realize transition.
4.2 Determine Exhibition Property Right to Build Solid Foundation for Market Operation of
Exhibition Activities
Along with the increasing number of government-led exhibition projects, expanding scale and the
deepening influence, some problems of exhibitions have accumulated. Some of exhibitions have also
tried to find solutions to their problems. For example, the market operation concept such as
“government setting up stage, enterprise playing the roles in the show” has been put forward. There are
also such specific reforms as China Beijing International Hi-Tech Expo adopting out-sourcing forum
organization, China International Equipment Manufacturing Exposition exploring joint venture and
stock company, China Hi-Tech Fair segmenting two professional fairs, China International Industry Fair
cooperating with German Hannover Exhibition Corporation. All these reform measures have promoted
the marketing process, but reforms cannot be furthered as the key issue for marketing approach has not
been solved. Because exhibition management involves many aspects including organizers and
co-organizers, and organizers and co-organizers also consist of many units or enterprises, if obligations
and benefits among exhibition members are not clear enough due to ambiguous exhibition property
rights, the issue of the vacancy of persons liable in the management of exhibition will arise. All the
members from organizer and co-organizer are related to exhibitions, but no one will take responsibilities
for the long-term brand value building of the exhibition instead of paying attention to short-term
benefits. This is the fundamental obstacle to the development of government-led exhibitions. It is
imperative to reform the property rights of government-led exhibitions in order to solve this substantial
problem related with all parties involved. Rights of property ownership and management will be
straightened out through overall property check and evaluation. After the exhibition ownership has been
made clear and definite, market-oriented operation can be conducted to ensure rise in value of exhibition
brand. Clear and definite exhibition ownership is the fundamental prerequisite for market-oriented
operation.
4.3 Cultivating Professional Exhibition Companies to Fulfill Sustainable Development of
Exhibition Market
The development goal of marketization, professionalism, internationalization, informationization and
efficiency, effectiveness and benefit must be attained by professional exhibition companies as the main
body to operate exhibition activities. In this way, modern enterprise management system will be set up
and highly efficient service can be achieved. Enterprises attending exhibition will be satisfied as
exhibition effectiveness has been enhanced. Given the relatively small exhibition enterprises available at
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present in China, it is the effective method for the government to withdraw from exhibition market
management by cultivating and strengthening some key professional exhibition enterprises. These
enterprises will possess enough human, material and financial resources to hold exhibitions successfully
instead of depending on administrative commands. Such measures as adopting advanced exhibition
concept, utilizing and innovating various exhibition technologies, deepening the extend of exhibition
information system and providing professional services at every operating stages will enable exhibitions
to develop sustainably.
4.4 Introducing Third Party Exhibition Evaluation System to Provide Effective Method for the
Sustainable Development of Exhibition Market
Scientific evaluation system concerning exhibitions can not only find out the actual result of exhibition
activities but also supervise the performance of exhibition enterprises. The result of exhibition
evaluation should be the major basis on which to provide fund support, subsidy and reward to
exhibitions by government, which is beneficial to the emergence of exhibitions of high quality, to the
enhancement of fame for exhibitions and to the development of name-brand exhibitions. The result of
exhibition evaluation also can provide the participant enterprises with the benchmark, reducing the
marketing expenses and gaining added value for exhibitions.
The scientific method is largely embodied in the quantitive evaluation and in the introduction of third
party not involved in the benefits and interests in exhibitions as evaluation system. Data and facts speak
while third party evaluation renders research data objective and impartial. The scientific evaluation
method ensures the authority of evaluation mechanism and the credibility of evaluation result.
5.
Conclusion
The existence of government-led exhibitions in our country at present is necessary, but as we know,
convention and exhibition economy should be conducted according to the market discipline and
government should finally give way to enterprises in the exhibition operation. Governments should
serve to give guidance and instruction. Above all, the governments should transform its position to
create favorable environment for sustainable development instead of organizing exhibition activities.
References
[1]. Wu guomei. The operation mode of government-led exhibitions, economy of enterprises, 2009(03),
p126-128 in Chinese .
[2]. Tang Rong. reform and development exploration of government-led exhibitions in China. Fujian
Engineering College Journal, 2009(04), p143-146 in Chinese .
[3]. Wang Qijing, market-oriented reform of government-led exhibitions in China. Beijing International
studies University Journal, 2008(07), p51-55 in Chinese .
[4]. Zhang Li. Discussing on development strategies for government-led exhibitions in China. Market
dynamics, 2008(11), p91-93 in Chinese .
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