National Expos used to be the “big deal” back in the early 1900’s, till then they have fallen in the shadow of the Olympics or even the soccer world cups (anybody remember the last two expo’s ?) ; thus becoming events nobody really knows about. Nevertheless, China is putting the ”Expo” back at the top of the “shows” by investing more than US$ 4.5 billion in a project as wide as twice de size of the city of Monaco in the middle of Shanghai (hosting 189 countries). This project cost even more than the last Olympics in Beijing and is supposed to attract at least 70 million visitors until the end of October (up to now some 300 to 500 thousands visitors per day attend the expo; though mostly Chinese citizens…).

So why has the Chinese Government invested so heavily in this expo? One of the most probable answers is related to the “growing influence of China” (now the second largest economy by nominal GDP and PPP); the expo positions and promotes China throughout the world putting the country at the forefront of the global economy. Its main purpose is “educational”; it is to explain to the Chinese people their country’s “new” position in the world and how it has become so important and influential (for example: the size of the Chinese pavilion is about twice the size of all the other countries).

The expo is also a great platform to foster “cultural exchanges” and is an excellent basis for future “business” or economical relationships between China, Asia and the world. Most countries having invested many million USD’s in their “pavilions” hope to develop or strengthen their relationship with China.

It has generated so many constructions and improvements among public transportation (subways, airports) and areas (the bund area, parks…) that the benefits of this expo will be seen long after it is over (it is believed that the returns will be more than 10 times its investment). Not only did this event “speed up” the development of the city, it has “pulled” the overall export-oriented economy of Shanghai and promoted its new and more “service oriented” aspects.

The downside? It’s hard to tell; though there has been the relocation of thousands of people, its positive aspects are believed to strongly outpace its negative impacts. The big question is; will the government know how to maximize all that space and buildings after its finished? What will happen with all those great constructions?

Finally, the Olympics and Expo combo is something we had already seen in the 70’s in Japan. At the time Japan had successfully promoted it’s raising “Empire” as a “modern” country! Is China trying to do the same today? Probably it is; and it’s doing it at a faster pace…

In our next blog post will continue our “what to know when doing business/investing in Asia episode” and talk about “The shift in consumer power from the West to Asia!”…