Where to now?

It might seem churlish to question the value of a body at least partly responsible for China's success story in international trade. A recent World Bank report re-evaluated China as the world's third largest economy after the US and Japan. Foreign trade is estimated at US$185bn in 1993, US$20bn up on last year's figures.

Anecdotal evidence also suggests a favourable investment climate. Mr Paul Volcker, Chairman of the Board of Governors of the US Federal Reserve System from 1979-87, says China and Southeast Asia are much more welcoming places for foreign investment than Japan and Korea ever were.

Despite such proud achievements, the China Council for the Promotion of International Trade (CCPIT) is having to come to terms with a new role. No longer the sole organiser of trade fairs in China, competing with a host of other bodies as a source of help for domestic and foreign companies and constrained from performing in the same role as a Western chamber of commerce, CCPIT is facing an identity crisis.

Network

CCPIT, otherwise known as the China Chamber of International Commerce, is an established source of help for foreign investors. Founded in 1952, it has become the country's most experienced national non-government trade and economic promotion body.

At home, CCPIT's sub-councils at provincial level and local branches at grassroots level enable it to reach almost every corner of the country. In the wake of foreign trade reform which allowed some major manufacturing companies full autonomy over import and export, CCPIT started a membership subscription system in May 1986. The scheme attracted more than 14,000 individual and corporate members from industrial, commercial, legal and financial circles as well as specialist foreign trade companies.

Its home network was strengthened in 1988 by the creation of sub-councils in ministries of 10 industries: machinery and electronics, agriculture, light industry, textiles, automobiles, commerce, petrochemicals, metallurgy, aeronautics and astronautics, and chemicals.

In the world arena, CCPIT has 14 overseas representative offices and has built ties with more than 350 chambers of commerce and foreign trade associations in over. 160 countries. It holds memberships to the Union of International Fairs, World
Intellectual Property Organisation, International Association for the Protection of Industrial Property, Licensing Executives Society International, the International Maritime Committee, the International Arbitration Association, and the World Association of Medium and Small Enterprises.

In addition CCPIT has applied for membership to the International Chamber of Commerce (ICC), with both parties setting up a cooperation committee in June 1991.

Trade fairs

Apart from its wide network of contacts, "CCPIT is particularly efficient and experienced in organising trade fairs around the world," says Mr Peter Forsythe, regional Executive General Manager of Austrade, the Australian Trade commission, who has 15 years of experience working with the Chinese.

CCPIT has a history of coordinating with domestic businesses to host or participate in international fairs abroad and attracting international fairs from overseas. Its property in the north-eastern suburbs of Beijing, the China International Exhibition entre, built in 1985, has become home to several large-scale regular exhibitions including the biennial Beijing International Fair.

At the same time, the organisation handles adjustments of common and single averages, issues certificates of place of origin for Chinese export commodities and certificates of force majeure and legalises foreign trade and shipping documents, accepts invitations to act as legal advisor of companies and enterprises and provides legal consultation on Foreign economic and trade matters.

Taking care of intellectual properties, a major concern of overseas business people in China, is another part of CPIT's s remit. It started its trademark agency more than 30 years ago and has established a clientele from more than 50 countries. With the advent of the Chinese Patent Law in 1985, CCPIT founded its agency for foreign patent rights. In 1991, when the Chinese National Congress passed the Copyright Law, CCPIT began its new agency in foreign-related copyright and computer software.

Its image as a non-government body also helps China to cultivate and maintain links with those countries which don't have formal bilateral diplomatic relations. Before 1979 CCPIT was the only channel for non-governmental trade between China and the US. In October 1990 CCPIT signed an agreement with its South Korean counterpart to set up representative offices in Seoul and Beijing, almost two years ahead of the normalisation of diplomatic ties.

Challenges

Increasing liberalisation and economic development in China have forced CCPIT to adapt. Mr Lu Guoxian, Chairman of CCPIT Shanghai, said that CCPIT was moving beyond the traditional areas of foreign trade to promote technology imports and foreign investment. As an ex-Deputy Director of the Shanghai Bureau of the Ministry of Foreign Economic Relations and Trade (MOFERT, now MOFTEC), Lu is seen as part of the strategic move.

However, CCPIT's position as a main source of help for foreign business people is already being challenged. "They may be a starting point [for newcomers] but they are not exclusive; people can come to Austrade for help'', says Forsythe. "There's also CITIC, various private and public advisory bodies and consultancy firms."

Simon Tang, who used to work for Austrade in Shanghai, says they never had to turn to CCPIT if an Australian company came to them. "We just go straight to the relevant industry and look for a partner for the company. There's not much point going through CCPIT because investment projects have to get official approval from MOFTEC and CCPIT is just an agent like we are."

In Shanghai, for example, the Foreign Investment Service Centre, an arm of MOFTEC Shanghai, provides the same services as CCPIT and is naturally preferred because it is located in the same building as the government department.

"Investment is a tricky thing. There are lots of institutions available for information and help. People tend to go to several sources and CCPIT is only one of the options," says Dr Siegfried Schone, Director of the Foreign Trade Department of the Hamburg Chamber of Commerce. He added that member companies can also go to the German Embassy in Beijing, the Chinese Consul General in Hamburg or his chamber's representative office in China.

Some of the policy-making responsibilities of MOFTEC seem to have been taken on by the State Economic Trade Commission, indicating a tendency for MOFTEC to focus on trade and economic promotion. Forsythe sees no evidence that MOFTEC is moving towards CCPIT. "Even if it is, it's not a bad thing. It means there is more marketing muscle and more people to go to." For CCPIT, however, this presents a major challenge: how to attract new clients and maintain the old against a growing number of competitors.

CCPIT also faces a problem in its bid to become a member of ICC. "As a member of ICC, Hamburg Chamber of Commerce sees to the interests of private companies in the city, overseeing all aspects of the local economy", says Dr Schone. "We are more involved in policy making than day-to-day running." He goes on to argue that CCPIT is different, operating in a promotional capacity in a largely planned economy. For example, a Western chamber might work with local companies to try and overcome government restrictions or sanctions where they are seen to harm the company's interests. For its part, CCPIT will always tow the government line.

As to CCPIT's strength in organising trade fairs around the world, this too is being challenged. Not only are other state organisations encroaching on an area which used to be its preserve, but CCPIT is also criticised for being short-termist. Compared with western counterparts which market their events three to five years ahead, CCPIT has only one year's booking. This leaves insufficient time to promote its events and for foreign business people to schedule in advance.

For this reason, the conference on International Cooperations of Chinese Medium and Large Enterprises, held in Shenzhen from October 11-14, failed to attract foreign participants in the numbers one would expect of a conference featuring 200 projects seeking international cooperation.

Nor is CCFIT's image helped by its brochures, which, like corporate literature throughout China, appear verbose and imprecise to Western readers. Perhaps this is a small point, but it is symptomatic of a body that must modernise in step with overall reform in China. Otherwise, it risks being bypassed altogether.*