Why Import Promotion Could Increase China’s Trade Surplus
China's just-launched International Import Expo, which will be an annual event, has attracted thousands of companies from dozens of countries with the promise of large orders from Chinese firms. But, if the expo contributes to increasing imports, China's export sectors will benefit, too.
NEW YORK – Countries often devote public funds to promoting exports of their own goods and services. But devoting resources to promote imports – as China is doing with its inaugural International Import Expo, which just opened in Shanghai – is truly rare.
The annual Import Expo, which will be part of China’s overall import promotion strategy, has attracted thousands of companies worldwide with the promise of large orders from Chinese firms, including the state-owned enterprises that the government has tasked with making the expo a success.
If the expo succeeds in raising imports, one might expect it to reduce China’s trade surplus. But that need not be the case.