Expo Powers China’s Economy

The World Expo which is regarded as the Olympic Games of culture, economy, science and technology is getting close to Shanghai. The tourism of Shanghai and the whole China is greeted by an unprecedented opportunity.

January 21, 2010 was the 100-day countdown to the opening of 2010 Shanghai World Expo. By the end of January, 90% of the World Expo pavilions and related structures have been finished and 18 million tickets have been sold. It is estimated that more than 70 million people from all over the world will come to visit this biggest-ever World Expo.

70 million visitors undoubtedly will bring a golden opportunity for the tourism of Shanghai, as well as whole China. The hotel, aviation, retailing, catering and transportation will benefit from the World Expo. The research proved that 97% of the travel during World Expo is based on the daily trip. The large increase of the travelers will lead to the drastic increase of consumption as well as the upgrade of Shanghai tourism.

Upgrade of Tourism

On December 1, 2010, the State Council (Cabinet) issued the Suggestions about Accelerating the Development of Tourism (hereafter the Suggestions), stating the role of tourism in national economy and the requirements of developing the tourism in the future.

The research showed that when the GDP per capita reaches 3,000 – 5,000 US dollars, the tourism will enter into its high-speed growing period. Presently, China’s tourism has been in this period. However, the demand of tourism is much larger than the supply. The extensive development pattern and behindhand tourism infrastructure and service level have greatly hindered the development of modern tourism required by the State Council. The World Expo will force the Chinese tourism to upgrade the facilities, improve the service and enhance the competitive power.

The National Tourism Administration has already called the year of 2010 as the “Year of World Expo Travel”. During the Expo various Chinese national art and custom shows will be on every day. Then Shanghai will become a large stage to show the Chinese traditional arts and customs. Shanghai government will also issue favorable conditions to help the Chinese traditional brands get into Shanghai, enabling them to display themselves to the world. According to the estimation, the total income during the Expo will reach 100 billion yuan (USD 14.65 billion).

According to the statement from Ctrip.com, 80% of the main hotels in Shanghai have already published the prices of their rooms during the Expo, which will be 20% higher than the ones at ordinary times. According to He Jianmin, professor from Shanghai University of Finance and Economics, the contribution of World Expo to the economic development is 3.49 times of the Olympics. Shanghai can capitalize on the opportunity to increase the domestic demand, improve the leisure travel and accelerate the construction of the international financial and marine center.

In addition, some pavilions which will be permanently reserved after the Expo will become the landmarks for Shanghai. Some of them will be used as the exhibition centers while the others will be seen as new viewpoints. The construction of roads for the convenient transportation during the Expo will be useful after the Expo. With the consummation and diversification of the tourism facilities, the competitive power of Shanghai’s tourism will be greatly increased, enabling Shanghai to play a more important role in China’s upgrade of tourism.

Dao Shuming, head of Shanghai Tourism Administration, said that Shanghai will introduce new policies. For example, two kinds of cards will be issued to the travelers for promoting consumption, one of which is the real-name traveling credit card and the other is the anonymous traveling card. The two cards will give the holders a lot of convenience in consumption and can help the consumers to change their consumption habits. A new kind of financial company – consumer finance company – will come out with this trend. All in all, the World Expo will become a powerful engine for the transformation of Shanghai economy.

Activate Tourism in Yangtze River Delta

On January 1, 2010, the “Year of World Expo Travel” was officially launched. More than 50 travel routines connecting Shanghai and the other tourism spots in the Yangtze River Delta were introduced to the world. The West Lake in Hangzhou, the gardens in Suzhou, the temples in Nanjing and the waterscape in Shaoxing etc are all available for any travelers coming to Shanghai during the Expo. The numerous natural and cultural scenes in the Yangtze River Delta will be more attractive during the Expo. The untold travelers will bring new force into the tourism of the Yangtze River Delta.

This area collects 25 China Excellent Tourism Cities and 48 4A-level scenic regions. In addition, different areas have different travel advantages. Zhejiang focuses on leisure travel; Jiangsu advocates humanism culture and business travel prevails in Shanghai. The win-win partnership is the key to the rise of tourism in Yangtze River Delta. Now, all the scenes in this area have already used the uniformed travel marks. The project World Expo Travel in Yangtze River Delta is being optimized and introduced into the world.

According to the National Bureau of Statistics (NBS), 36.6% of the visitors to World Expo from China will also go to the nearby places. Most of them will go to Zhejiang and Jiangsu, of which Hangzhou, Suzhou, Nanjing and Wuxi are the most popular. Certainly, what will World Expo bring to this area is not only the huge number of travelers; the sharing and connections of tourism resources, customer treatment, service systems and communication systems will foster an obstacle-free travel areas in Yangtze River Delta, which will promote the healthy, sustainable and fast development of the tourism in this area.

Dao Shuming said that travel is an important measure for the Expo’s role of promoting and integrating the economy in the Yangtze River Delta. The construction of the travel routine connecting Expo park, Shanghai and Yangtze River Delta will help the formation of the Yangtze River Delta tourism system consisting of leisure travel, sightseeing and business travel. The magnetic suspension railway connecting Shanghai and Hangzhou and the high-speed railway between Beijing and Shanghai will be put into use in 2010. In addition to the construction of highway networks, the transportation in the Yangtze River Delta will be safe and convenient during the World Expo.

Assist in “Increasing Domestic Demand”

According to the report, preparing the World Expo is not the exclusive business of Shanghai. Within the arrangements of the central government, 31 provinces and cities have been engaged in the preparation of World Expo.

Fu Shujun, researcher from Shanghai Academy of Social Sciences, thought that these provinces and cities are seeking the opportunity to develop themselves when preparing the World Expo. In his opinion, the World Expo, as a big stage for the exhibition, will greatly promote the development of the exhibition industry. Liu Yunzhong, researcher from the Development Research Center, State Council, thought that the World Expo will promote the cooperation among different provinces and this will be helpful for balancing the economic development and the industrial distribution in these places.

In addition, the development of tourism will function as a catalyst for the industrial structure. First, the combination of tourism and agriculture will foster the sightseeing agriculture, experiencing agriculture and ecological agriculture; second, the combination of tourism and industry will induce the industrial travel (including visiting the plants and experiencing the products); third, the tourism, which belongs to the third industry, will generate several kinds of new industries like sports travel, culture travel and catering travel etc.

Therefore, the development of tourism is an essential option for increasing domestic demand and adjusting economic structure. For a long time, China’s economic development mainly depended on the foreign investment and foreign trade. The deficient consumption and low proportion of service have been haunting China for long. The proportion of the third industry in the national gross economic volume is 48.6%, which is lower than developed countries’ 70%, world’s average 64% and even India’s 50%. Therefore, tourism, which is the leading industry of the modern service, will be the pillar industry in driving the development of China’s third industry.

In addition, the World Expo provides the opportunities to combine tourism with finance, insurance, catering and cultural industry. Tourism will bring a large number of customers for these industries while the development of these industries could facilitate the development of tourism. How to make best of World Expo to establish the brand image and service standards and to promote the adjustment and upgrade of the whole industry structure is a question worth our careful consideration.

According to the experts, the combination of culture, travel and business will be the main orientation of the integration of Shanghai’s state-owned enterprises due to the influence of World Expo. This orientation also conforms to the long-term plan of developing modern service. “Right now Shanghai has already finished the integration of auto, electronic and food industries,” said one of the experts. “Presently the added value of third industry in Shanghai downtown accounts for 78% of the GDP. To support the development of third industry is good for the sustainable economic development.”

Low-carbon Expo

“The power and water consumption of the hotels and A-level scenic regions will be lowered by 20% in 5 years,” said the Suggestions. Indeed, the tourism should not be a large consumer of energy and resources. The extensive development pattern of “high cost and low return” should be yielded. The “low-cost-and-high-return” intensive development with innovative management system, development and operation pattern is needed to maintain the development quality.

Therefore, Shanghai World Expo posted the tagline of “low-carbon Expo”. In order to realize this goal, China has used many ways, from the national solar power generator to the application of more than 1,000 hybrid autos and to the “zero waste gas emission” of the buses inside the Expo park.

In the Denmark Pavilion there displays a special exhibit – the bicycle; the green construction technology is adopted in the Germany Pavilion; the environment-friendly splint materials are used in the Spain Pavilion. The Expo park itself also reflects the concept of low-carbon development. The issues of global warming and environment pollution have received unprecedented attention from the world.

Li Shuguang, professor from China University of Politics and Laws, said: “The World Expo will bring about a lot of business opportunities, as well as the need to build a more environment-friendly, technology-oriented and internationalized Shanghai. Therefore, to solve the problems of pollution and excessive energy consumption and to develop the low-carbon economy is the inevitable pattern which meets the requirements of developing low-carbon economy.”

According to research of China Tourism Academy, the tourism income of China in 2010 will reach 13%; the number of travelers from inside will be 2.1 billion, up 12% year on year; the number of foreign travelers will reach 136 million and the income will be 42 billion US dollars.

Then, according to the World Tourism Organization, China will be the country to host the largest number of foreign travelers in 2015. By that time the total consumption related with travel will exceed 1.5 trillion yuan (USD 219.72 billion). The development will create more job vacancies, which could help to solve the problems of employment.

With the development of economy, China is facing the increasing stress of environment protection and energy saving. The increasing environmental cost alongside economic development needs the change of development pattern. Tourism just meets the demand.