Asian political heavyweights gathered in Hong Kong today to discuss the city’s role in One Belt One Road (OBOR), as corporations eye the potential prize the infrastructure initiative will offer.
Hundreds of protestors outside the summit’s venue threatened to overshadow the appearance of Zhang Dejiang, China’s third in command and the minister with overall responsible for Hong Kong and Macau.
Unprecedented security saw thousands of police on the streets and occupying the mountains and sea that overlook and surround the harbour-based exhibition centre, as pro-democracy campaigners used the platform to draw attention to their cause: universal suffrage for Hong Kong, with China’s decision to parachute in approved candidates for next year’s CEO election providing the ammunition for mass rebellion in recent years.
Zhang’s address to the summit outlined the potential role for Hong Kong in the ambitious New Silk Road programme.
For some time, businesspeople and politicians in Hong Kong have viewed it as the natural transactional hub for the deals struck on OBOR, however Zhang encouraged Hong Kong to contribute more by sending students to study in OBOR countries and co-financing projects too.
He encouraged Hong Kong to “seize the major opportunities” offered by OBOR and emphasised the special administrative region’s role in China’s structural reform. He also encouraged Hong Kong to play an important part in renminbi internationalisation.
Outside the venue, protestors cried out against the Belt and Road initiative, but their voices are unlikely to be considered in the corridors of power, given the overwhelming business support for the drive.
A new survey of 144 company executives found that 63% expect OBOR to boost trade and lead to greater economic integration in Asia. However, only 26.5% of respondents had already allowed OBOR to influence their strategic decisions.
Speaking to GTR recently, Ben Simpfendorfer, director of the Silk Road Associates, encouraged companies to view OBOR through a commercial lens, rather than focusing on the vast scale and breadth of the initiative.
“Competition for talent, especially those with Chinese language skills, networks and experience, is bound to increase,” Bee Chun Boo, Baker & McKenzie
“There’s a huge amount of scepticism around it but that’s because people are focused on the strategic implications rather than the commercial implications, they tend to get to wrapped up in the big picture, perhaps rightly so given that it is spread over 60 countries,” he said.
He added: “Policymakers may not necessarily understand the markets they’re dealing with, every country is different. But the reality is we need to focus on the commercial implications: what does it mean for me as a company, for my partners, my competitors and my suppliers?”
On the other hand, the multilateral trade agreements under negotiation in the region, the US-backed Trans-Pacific Partnership (TPP) and China-supported Regional Comprehensive Economic Plan (RCEP) are being given closer consideration. 85% expect TPP and RCEP to boost trade, respectively.
Bee Chun Boo, partner at Baker and McKenzie law firm in Beijing, says that companies should start preparing now, lest OBOR opportunities pass them by.
She says: “One Belt One Road may still seem to be a distant goal for some, but the reality is that many businesses are already taking the initiative upon themselves in order to get ready for the opportunities and challenges that may arise.
“Competition for talent, especially those with Chinese language skills, networks and experience, is bound to increase, while competition among multinationals for joint venture partnership or acquisition opportunities with Chinese companies will intensify.”