China's MICE business prospects will be swiftly on the mend, despite inflation concerns and the threat of a potential recession are looming over the Chinese economy.
According to a recent Deloitte global economic update, released on 28 June, China’s economy has been hit by a range of factors including the pandemic, trade wars, the war in Ukraine and rising US interest rates.
“Now, as Covid-19–related restrictions are eased, there has been hope that the economy would quickly rebound,” the update says. However, it identifies new as well as continuing headwinds impacting Chinese manufacturers," according to the report.
“First, inflation and fear of recession have weakened overall demand in the United States, Europe, and elsewhere,” the report says. “Second, as the pandemic fades, consumers are shifting away from the purchase of goods and toward the purchase of services, thereby hurting China’s export-oriented production of goods. Third, although Covid-19–related restrictions have been eased, they have not been eliminated. Thus, production in China remains suppressed.”
To what extent are these concerns weighing on the recovery of meetings and business events in the APAC region?
Julian Pullan, vice chairman and president, international, at Jack Morton, says the meetings industry is often at the vanguard of cutbacks when recessionary fears arise. However, he believes it will be different this time.
“Businesses were starved of the ability to convene customers, partners, and employees together, in-person, for so long,” he says. “Now that they can, the value and impact is so apparent, they don’t want to pull back. Lockdowns did more to prove the ROI of live meetings than any metrics we have ever seen. We are currently seeing huge growth in business globally, and that growth is particularly steep in APAC.”
He adds that clients are committing to large programmes as far ahead as 2024 and 2025.
It’s a view shared by Olinto Oliveira, general manager at MCI in Hong Kong & Macau, who says that the appetite for events in APAC is still very robust, despite the conservative approach in the region and price sensitivity.
“Clients still want to engage with their audience, and so the onus is on us as agencies to present clients with high value solutions which deliver high return on engagement while minimising risk,” he says.
While APAC in general has been more conservative in its approach to meetings compared to other regions around the globe, Oliveira does not see this as a hindrance.
“As noted in the past, due to the very high upside present, once comfort levels return, clients will once again invest heavily in APAC,” he says. “The correct approach is to continue to exercise patience while searching for the right opportunities that are still presenting themselves.”