FROM THE MIGHTIEST metropolis to the smallest town, trade fairs are all the rage in China. The most successful are the biggest. They range from the huge Shanghai Industry Fair and the Beijing Automobile Fair to the second-tier Nanjing Economic Trade Fair. However, there are just as many, if not more, that simply fail to make the grade. After an initial rush, they witness declining attendance and seldom survive beyond the second event. As an old Chinese saying goes, one can succeed only if blessed by the heavens, able to make use of local advantages and unanimously supported by the people. Fairs with these advantages make it to round three. A case in point is the China (Shenzhen) Consumer Goods Procurement Fair, which began in 2002. The fair will probably become 'commercialised' - or run as a profit-making endeavour by a non-state entity - in the next two or three years, according to Hua Tao, president of the Shenzhen Retail Business Association, co-sponsors of the fair with the Shenzhen government. The decision seems a natural one, due to the fair's rapid growth. The first and second fairs attracted 12 and 20 overseas procurement groups, respectively. This year the number has soared to 80. Some of these groups will conduct their own special procurement meetings during the fair, one of which is being billed as the 'United Nations' procurement group. Many large cities such as Guangzhou, Nanjing and Chengdu have tried to emulate the Shenzhen fair, but all stopped after hosting one or two. Shenzhen's strengths cannot be imitated, according to Qin Qunli, deputy director-general of Shenzhen's bureau of trade and industry. Mr Qin says Shenzhen has four advantages: huge export volumes, accounting for about 30 per cent of the mainland's total; well-developed infrastructure; an advanced logistics industry; and a good general business environment. He says Shenzhen has naturally become a key distribution centre for consumer goods, thanks in large part to its relationship with Hong Kong. These links are growing stronger despite concerns about increasing competition between the two cities, Mr Qin says. 'Shenzhen's development is mainly based on the mainland market, while Hong Kong has wide international resources and overseas markets,' he says, adding that the consumer goods fair is a good opportunity to further develop Shenzhen's advantages. Investment in the three fairs so far is 30 million yuan, which has been largely recouped from exhibition entry fees and advertising income. The Shenzhen government will choose 'the proper time' to withdraw from the fair's organisation now that it is firmly established, Mr Qin says. 'Our past experience has proven that the market can operate best by itself.' Meanwhile, Mr Hua, who has sought advice from many international organisations, says the fair can be developed in two ways. 'The Shenzhen Retail Business Association could run the fair or we may invite some outside private investment,' he says, adding that the latter option is preferable. 'Since some private investors have deep funding and the experience of holding big exhibitions, they may be better placed to further strengthen the fair's position,' Mr Hua says. He says Hong Kong investors may be more likely candidates because they know the domestic market better. Many international exhibition companies, such as Messe Frankfurt, may be interested in investing in the Shenzhen consumer goods fair due to its rapid growth and huge potential, according to Pansy Yau, assistant chief economist for the Hong Kong Trade Development Council. However, she agrees that Hong Kong companies have strong qualifications as they have experience with international fairs as well as good relationships with potential exhibition partners on the mainland.