A city’s core competency results from development and competition over a long period of time. It is unique and hard to replicate.

Besides, a city’s competency hinges upon a combination of factors that often have a definite bearing on optimizing regional resource allocation.

Against this backdrop, a continued drive to enhance a city’s core competency is a major prerequisite for it to stay influential and allocate global resources in the face of an uncertain external environment.

The second China International Import Expo (CIIE), which runs from November 5 to 10, has emerged as an important window on Shanghai’s rising clout and service capabilities.

Through CIIE, the key strengths of Shanghai in areas such as openness, innovation and regional integration will come to the fore, mirroring an alignment between a city’s improved capabilities and China’s new round of opening-up.

In the era of globalization, CIIE will demonstrate Shanghai’s role as a key transit hub in global trade. It will also showcase progress made under China’s ongoing new round of opening-up.

In terms of trade structure, Shanghai imported goods worth 2.03 trillion yuan (US$290.6 billion) in 2018, up 6.4 percent from 2017.

In the same period, its exports totaled 1.36 trillion yuan, an increase of 4.2 percent over the previous year. Rising imports at a faster clip indicate an optimization of Shanghai’s trade structure as well as its growing status as a trade transit hub.

Market potential

CIIE will encourage more multinational firms to set up operations in Shanghai or other onshore markets.

What’s more, this year’s CIIE has added United Nations Development Programme, International Trade Centre and other global organizations to the list of invitees, a move suggesting Shanghai’s deepening ties with multilateral organizations from around the world.

Over the past 20 years, Shanghai has mainly played a supportive role in helping domestic industries access the global market. It also provides an avenue for foreign direct investments in China’s export manufacturing sector.

CIIE will give an impetus to Shanghai’s presence as the city steps up its efforts to connect domestic industries with the overseas market.

Shanghai used to be a gateway to developed Western economies, but now this role starts shifting toward one that gives equal attention to Western countries, Belt and Road nations and developing economies. In 2017, for example, Shanghai imported 364.9 billion yuan worth of goods from Belt and Road countries, a surge of 25 percent compared with the previous year.

This volume topped the imports of the US and ASEAN (Association of Southeast Asian Nations) from Belt and Road countries, which stood at 207.2 billion yuan and 264.2 billion yuan.

China’s new round of opening-up is driven in part by manufacturing and in part by consumption. From chasing high-quality growth to leading a quality life, the change in slogans reflects the gargantuan scale of China’s consumption market.

The country is already home to a vast number of upper-middle-class consumers with strong buying power. CIIE thus will deliver more opportunities to countries that choose to exhibit their products at the fair.

Mexico, for one, is keen to know whether Chinese consumers have an appetite for the country’s Tequila spirits and avocados. Developments in China’s healthcare, education and beauty care sectors have presented global enterprises with immense opportunities.

Leading pharmaceutical firms like Pfizer, Roche, MSD, Johnson & Johnson and Eli Lilly and Company registered for CIIE long ago and even planned to launch some of their new medicine and medical devices that had secured or were awaiting approval from local FDA authorities in China. Similar examples abound.

In the past, Shanghai was more fixated on economic openness. But since the introduction of “Shanghai 2035,” a plan for building itself into an “excellent global city” by 2035, the city has been placing a premium on innovation and exchange of ideas. Global cities are the result of globalization.

A snag in globalization definitely has consequences for global cities. Nonetheless, the resilience of global cities is reflected in their so-called urban spirit and culture. These are the things that won’t easily succumb to vagaries in external environments.

CIIE will serve as a window on Shanghai’s expanded opening-up efforts in innovation and culture.

China’s scientific and technological innovation requires as much homegrown research and development as the exchange of cutting-edge new products, know-how and information.

In addition to being a platform to display high-tech gadgets, CIIE is also an occasion to showcase Shanghai’s capacity for tech services. The expo is a vehicle for attracting flows of information, talent and capital to Shanghai.

Culture matters

Of all the tentative deals worth a combined US$57.83 billion signed at last year’s expo, those going to smart and high-tech equipment amounted to US$16.46 billion.

At the ongoing second CIIE, a series of new products including the “Gemini” plano-milling machine and mist-proof film made their debut.

The number of Fortune 500 companies that took part in this year’s expo also exceeded last year’s figure.

The enduring appeal to global capital and resources exemplifies Shanghai’s unswerving efforts to build an open innovation system.

Culture will also be a key area of global communication. As China chases high-quality growth, a quality life entails more culturally iconic products from abroad. Every country hopes to apply a cultural label to every single product it exports.

For instance, Australia, New Zealand and Canada play up concepts such as local heritage and organic farming when marketing their products at CIIE.

Britain goes to great lengths to promote itself as a “center of creativity.” The US and Japan highlight their technological superiority through a cultural format.

The ability to coordinate and spearhead regional economic development is another hugely important pillar of Shanghai’s core competency.

The competition between global cities is often equated with competition among city clusters.

As such, Shanghai’s bid to elevate its own capabilities will not succeed unless it leads neighboring cities in the Yangtze River Delta in a concerted drive for better growth.

The second CIIE came as regional integration of the delta has morphed into a national strategy, a development characterized by the release of “Outline on Regional Integration of Yangtze River Delta.”

This document is of huge importance to Shanghai’s bid to better coordinate regional development.

CIIE is a conduit for global products, technologies and services to access the delta through Shanghai. It also turns cities adjacent to Shanghai from manufacturers for the world into buyers who shop globally.

At the inaugural CIIE last year, Shanghai’s Songjiang District formed a purchasing business alliance with a dozen cities including Jiaxing, Hangzhou, Jinhua and Suzhou, so that businesses from these places can negotiate better prices and terms when buying in bulk from overseas.

Shanghai’s neighbors also can have a finger in the big economic pie baked by CIIE. Last year, about 20,000 enterprises and organizations from a Jiangsu expo delegation took part in the fair, while more than 19,000 firms from Zhejiang registered for the expo. Meanwhile, a contingent of 3,456 organizations from Anhui participated in CIIE.

The regional integration of the Yangtze River Delta can be propelled with the provision of better products, infrastructure and social welfare benefits.

If the delta were to become internally closer and be able to address issues arising from flows of talent, the coordination between different innovation hubs within the region would have to be smoother, so as to enable businesses to produce with higher efficiency.

An ultimate vision for CIIE is to make the delta China’s “European Union,” a highly interlinked marketplace for businesses from outside the bloc.

This will be conducive to the industrial division of labor, to be sure; what’s more, it also will encourage cities to complement each other in areas such as tourism, healthcare, education, technology and culture.

The author is associate professor and vice director of IPE Research Centre of Institute of World Economy, Shanghai Academy of Social Sciences. Shanghai Daily reporter Ni Tao condensed the article and translated it from Chinese to English.