“One Belt One Road”: Its relevance to the European Companies

Written by Kening Zhang, Minister for Economic & Commercial affairs, Chinese Mission to the EU Chinese President Xi Jinping raised the initiative of jointly building the Silk Road Economic Belt and the 21^st Century Maritime Silk Road in September 2013, since when it has attracted close attention from all over the world. The initiative to jointly build the Belt and Road, embracing the trend towards a multi-polar world, economic globalization, cultural diversity and greater IT application, is designed to uphold the global free trade regime and the open world economy in the spirit of open regional cooperation. It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets; encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all. ——Vision and Actions on Jointly Building Silk Road Economic Belt  and 21st-Century Maritime Silk Road European companies might have doubts and bear questions in mind. What relevance does the initiative have for them? Where do the business opportunities lie? How could they participate? Hereby some observations and thoughts are to be shared in the hope that they could understand better the initiative. China-EU trade will be infused with new driving forces In consideration of the existing huge trade volume between China and the EU countries, the Belt and Road could be a further impetus to improve each other’s market access and trade facilitations. It is in line with the interests of both sides to further remove investment and trade barriers for the creation of a sound business environment in order to unleash the potential for expanded cooperation. Take the customs cooperation as an example; we could establish a “single-window” in border ports, reduce customs clearance costs, and improve customs clearance capability. And this is only an appetiser at the great banquet of “One Belt One Road”. European companies, with their advantages in management and technology, could become a positive business force in expanding the trade areas, improving the trade structure, exploring new growth areas of trade, and promoting trade balance between China and the EU. We could also expand mutual investment areas; deepen cooperation in agriculture, forestry, seawater desalination, marine bio-pharmacy, environmental protection industries, renewable energy industries, logistics, marine tourism and many other fields. Infrastructure construction will become a priority of investment Facilities connectivity is a priority area for implementing the initiative. On the basis of respecting each other’s sovereignty and security concerns, countries along the Belt and Road could improve the connectivity of their infrastructure construction plans and technical standard systems, jointly push forward the construction of international trunk passageways and form an infrastructure network connecting all sub-regions in Asia and between Asia, Europe and Africa step by step. We are fully aware of the enthusiasm behind the 57 countries that apply to become the founding members of Asia Infrastructure Investment Bank. Quite a few of them come from Europe. We both understand that there is great potential lying in the infrastructure constructions. The Eastern and Central Europe countries may need to update the transport devices and facilities. The capital and technology of Western European countries may be looking for the ideal investment projects. It is not a coincidence that Europe is also advocating “Connecting Europe” policy to close the gaps between member states transport networks, remove bottlenecks as well as overcome technical barriers such as incompatible standards for railway traffic. China and the EU happen to share the same view that the infrastructure construction would provide a vast space and promising prospects for the business communities. Various cooperation mechanisms will facilitate commercial activities The world economic integration is accelerating and regional cooperation is on the upswing. China complies with the trend and wishes to promote the bilateral and multilateral mechanisms among the Belt and Road countries to a higher level. We believe that a stable and solid cooperation system could be a strong support to the trade relations. We not only give full play to the bilateral mechanisms, encourage the building of FTA with the Belt and Road countries, we also strive to enhance the role of multilateral cooperation mechanisms, including international business forums and exhibitions at regional and sub-regional levels. Europe has rich experiences in promoting regional cooperation and integration. European companies have already benefited a lot from the EU single market which has removed most trade barriers for goods, adopted some common regulation policies and realised the free movement of capital and labor among the member states. We hope that Europe’s successful practices in this respect will contribute to the regional cooperation and integration among the Belt and Road countries so as to create more reliable business environment and abundant investment opportunities for the enterprises. With various cooperation mechanisms, the investors’ interests and activities could be safeguarded to the maximum extent. The Belt and Road Initiative intertwining with Junker’s Investment Plan will lead to a win-win situation for both Chinese and European companies At one end of the Belt and Road, the EU is striving to recover from the crisis. Junker’s Investment Plan not only invites the participation of all EU member states, but also welcomes the contribution coming from outside of the EU. At the other end of the Belt and Road, China’s economic development is entering into a “New Normal”, focusing on quality and efficiency. Chinese companies, together with the European counterparts could leverage this initiative to promote business in each other’s market and explore the great potential of markets in the countries along the Belt and Road. For the Chinese government and the EU institutions, it is high time they took a pragmatic approach and incorporate the Initiative with Junker’s Investment Plan. We will be very happy to see European companies’ involvement in achieving a win-win scenario under the framework of “One Belt One Road”. In this regard, any initiatives and proposals from the business communities will be greatly welcomed.