When this year’s first international trade fair in China opened in Beijing on September 4, eight months after the novel coronavirus disease (COVID-19) hit the country, President Xi Jinping’s video message at the inauguration outlined what this digitalization-oriented event wanted to present: global services and shared prosperity.
Xi emphasized that China will continue to ease market access in the service sector and expand import of quality services. He also highlighted the development of the digital and sharing economies.
Postponed for three months, the China International Fair for Trade in Services (CIFTIS) has grown from the humbler Beijing Fair that debuted in 2012 to one of the three expos meant to boost China’s opening up, besides the China Import and Export Fair in Guangdong in the south and the China International Import Expo in Shanghai.
Held at a time when COVID-19 was still a pandemic and many events worldwide have been canceled or rescheduled, CIFTIS shows “China’s willingness to join hands with all of you in this trying time and work together to enable global trade in services to thrive and the world economy to recover at an early date,” Xi said.
The service industry has become an important pillar of the world economy. Two thirds of the employment in developing countries and four fifths in developed countries come from services. Last year, China became the world’s second largest importer of services. In the first half of 2020, the added value of China’s service industry accounted for 56.5 percent of the GDP.
Unlike the trade surplus in goods, China faced a deficit in the trade in services for years. However, changes have begun to take place since 2019, according to Liu Chunsheng, a professor at the Central University of Finance and Economics in Beijing.
In an article on the China Pictorial website, Liu said the total import and export volume in 2019 increased 2.8 percent year on year, while the deficit decreased 10.5 percent. The exports of financial and insurance services increased steadily.
In 2020, the growth of knowledge-intensive service trade, as represented by computer information services, has given new impetus to global economic recovery, Vice Minister of Commerce Wang Bingnan said on September 5.
Next, China will move faster to open up healthcare, culture, education and telecommunications sectors, and introduce a negative list of off-limits items for cross-border trade in services, he added.
This year, besides education, CIFTIS mainly covered six more themes: culture, tourism, finance, 5G communication, winter sports and robots.
At the entrance of the CIFTIS exhibition hall in the China National Convention Center, artificial intelligence (AI)-powered machines measured visitors’ temperature. Guide robots took them wherever they wanted to go and robotic servants made fancy coffee. These remarkable assistants were the super stars at the fair not only because of their sci-fi concept but also because of the real services they offered.
Besides robots, the use of hi-tech ensured smooth integration of online and offline events to take CIFTIS to audiences worldwide. More than 20,000 companies and organizations from 148 countries and regions, as well as 190,000 people registered for the fair with exhibitors from abroad mainly participating through cloud services.
The epidemic pushed the fair to become fully digitalized. Even after the offline fair ended on September 9, the online version will stay open for a whole year.
To support intensive live-streaming conferences for the six days of the offline fair, plus nearly 7,000 virtual exhibition demonstrations and online chatrooms for private negotiations, JD Cloud & AI, the technological arm of e-commerce giant JD.com, created a comprehensive digital platform for the fair.
“Exhibition, forums and business negotiations were the three main scenarios where we digitized the fair,” JD.com’s Vice President Wang Peinuan said. AI, big data, cloud computing and the Internet of Things were used to create the platform.
Security was a prime consideration. In the chatrooms, the exhibitors could set the duration for their message to show. When it ended, the messages were automatically deleted. If anyone took screenshots of messages, they could be tracked.
An important element of CIFTIS was demonstration of extensive industrial application of hi-tech services. The mini logistics center at the fair was another sci-fi-meets-real-world scenario. At the center, mechanical arms sorted items with the help of cameras while robotic vehicles transported them to different destinations, guided by QR codes.
The logistics center was the brainchild of Megvii, a company providing AI solutions and products. After social distancing measures were implemented worldwide following COVID-19, robots have become a welcome business.
“We helped a world-leading fashion company build an automatic logistics center in Shanghai in April. It can handle 400,000 garment pieces in eight hours daily,” Cheng Changshun, Vice President of Megvii, said.
The Shanghai logistics center will have 800 smart vehicles and overall, thousands of pieces of equipment. “This will be the largest logistics center with flexibility,” Cheng told Beijing Review. The robots are not fixed to any place, which makes it easy to change their deployment. It will also save 60 percent of human resources costs.
While the client owns the online-to-offline central control platform, “if they want to open the control platform to us, we can help deal with problems from afar without obtaining any data. If not, we can help on-site,” Cheng said.
In his eyes, China still lags behind in automatic manufacturing and logistics and Megvii’s products will help improve industrial digitization in the country. It is not the first smart logistics center in the world but its relatively low costs can be a significant competitive edge.
Due to the large market in China, Chinese companies have more opportunities to test their products and upgrade them. Also, human resources costs are relatively low compared to developed countries. So Chinese companies have the advantage of low cost without compromising quality, he explained.
Japanese companies are known for their exacting requirements. “That’s why we want to cooperate with them,” Cheng said. Megvii also has clients from Singapore and Thailand.
“We help clients from overseas lower production cost and realize automation and digitization of logistics,” Cheng said. “For people abroad, this fair is an opportunity to see our products.”
Megvii was also the main supplier of the AI temperature check equipment for the fair. Portable with a small camera on a tripod, the machine can run 200 checks per minute. It was first used in a subway station in Beijing in early February, followed by many hospitals and supermarkets.
With the epidemic spreading, the equipment has become popular abroad too, with buyers from more than 30 countries including Japan, Thailand and the United Arab Emirates.
Another Chinese company Iben Robot’s dry-mist robots are serving hospitals in Wuhan in the central province of Hubei, Shanghai and Beijing, where frequent sanitizing is needed.
With safety of medical workers one of the main concerns during the epidemic, the domestically developed robot is a nifty tool that can issue a super dry mist of disinfectant to disinfect areas at high speed. The robots have automatic navigation, can disinfect the target place 360 degrees and can be activated by iPad control.
Iben Robot’s sales manager Liu Yunfei told Beijing Review that it took them three weeks to get the machines ready for use in February.
During COVID-19, one sector that has maintained rapid development is e-commerce. Li Mingtao, an e-commerce expert with China International E-commerce Center affiliated to the Ministry of Commerce, drew attention to the delivery of medical supplies around the world through cross-border e-commerce. “It played a key role in the global anti-COVID-19 effort,” Liu said at the CIFTIS Cross-Border E-Commerce Forum on September 6.
Amazon and eBay both saw massively increased sales in the first half of this year. Amazon’s first quarter sales rose 26 percent and second quarter sales 40 percent year on year, according to Sun Jianwei, Chairman of the Micang Supply Chain Group, a Shenzhen-based freight forwarder.
The Alibaba Group’s revenue grew 34 percent year on year in the second quarter, according to the company’s quarterly results published on August 20.
“We mobilized our entire digital infrastructure to support the recovery of businesses across a wide range of sectors, while broadening and diversifying our consumer base by addressing their changing preferences in a post-COVID-19 environment,” Daniel Zhang, Chairman and CEO of Alibaba, said.
“Taobao.com (Alibaba’s consumer-to-consumer platform) grew rapidly in 2003 when the severe acute respiratory syndrome broke out, as well as other Chinese e-commerce companies including JD.com,” Sun said. “The epidemic is changing people’s consuming habits, which will boost the development of e-commerce.”
However, cross-border e-commerce faces some uncertainties due to some politically driven restrictions, Sun said.
“We should promote consistency of legal frameworks and policies among countries to form consensus to beef up market confidence,” Chai Yueting, a professor at Tsinghua University, said at the e-commerce forum.
Chai mentioned the significance of digital logistics platforms. “The epidemic has little adverse impact on e-commerce, especially cross-border e-commerce, to a large extent because our logistics are not disrupted,” he said.
For greater cross-border e-commerce, he advocated reducing logistics costs and improving efficiency. Also, many logistics platforms are still regional and have not yet achieved global interconnection. They need to buck up.