Shanghai is banking on more international sporting events and concerts in the city this summer to revive spending to counter the blows to consumer confidence from the China-US trade war.
The city will host international equestrian, archery, triathlon and Formula E events in May and June, aiming to reel in spectators at home and abroad.
In March, Formula One racing returned to Shanghai for the Chinese Grand Prix, attracting the McLaren, Red Bull, Mercedes and Aston Martin teams as well as 220,000 fans, according to official estimates.
The city is also in discussions with Taylor Swift’s team for possible concerts later this year.
In all, Shanghai will play host to 178 sporting and other shows this year, according to the official Jiefang Daily.
While authorities hope the events will burnish Shanghai’s reputation as the mainland’s most internationalised city, they are also looking to the sports and entertainment fixtures to help put a floor under falling consumption.
A lack of demand is weighing heavily on Shanghai’s economic outlook, even though its gross domestic product of 5.39 trillion yuan (US$74 billion) last year made it the country’s biggest municipal economy, ahead of Beijing on 4.98 trillion yuan.
Retail sales in Shanghai dipped 1.1 per cent year on year between January and March to 405.7 billion yuan, with restaurant takings shrinking 3.4 per cent. The poor showing contrasted with the 4.6 per cent rise in national retail sales during the same period.
That fall was on top of a 3.1 per cent decline in consumer spending in the city last year.
Consumer sentiment is yet to shake off the malaise of Shanghai’s months-long lockdown in 2022, when retail sales dropped 9.1 per cent. Pre-Covid, the city’s consumption was robust, rising 6.5 per cent in 2019 and 7.9 per cent in 2018.
This protracted underperformance is a particular concern for Shanghai because the city is more exposed than many other Chinese urban centres to the trade frictions between China and the United States, according to a policy researcher with a Shanghai university.
“The risk is that the export engine will sputter because of Donald Trump’s tariffs and local consumption may not swiftly return to growth, losing Shanghai two economic pillars at the same time,” he warned, declining to be named.
But Bala Ramasamy, deputy director of the China Europe International Business School, said the extent of the tariff war’s impact on consumer confidence had yet to be seen.
“There are a whole range of things being done to increase consumption [like hosting big events] … I hope that consumers do not think that [the trade war] is going to be the end of the world, because it is not,” Ramasamy said.
“There is still a lot of potential in the economy itself.”
As Shanghai scrambles to find ways to resurrect consumption, the policy researcher agreed that the city should play to its strengths – its state-of-the-art venues and experience hosting international mega-events.
“It is among the very few options within the purview of Shanghai officials to whip up sentiment, and [matches and concerts] hopefully can attract visitors from outside to spend here,” he added.
Still, Shanghai will be vying with Hong Kong, Singapore, Tokyo and other regional rivals to woo A-list acts and events.
Hosting international shows in China is a complex process that involves navigating a maze of regulations, prompting some observers to call for authorities to cut restrictions on international performers.
For now, according to Shanghai media, there are signs that the mood is already lifting.
Ticket sales for this year’s Chinese Grand Prix in March were up 30 per cent over last year, its organiser was quoted as saying, and, during the ongoing Labour Day national holiday, crowds have thronged shopping malls, precincts and performance venues. Tables have also been filling up at popular restaurants over the five-day break.
