Will the G7’s alternative for China’s Belt&Road Initiave work? – Harry Broadman

 

Harry Broadman

The G7 planned during its certain meeting an alternative for China’s Belt&Road Initiative, to halt the country’s international leverage, the  Build Back Better World (B3W). But former White House advisor Harry Broadman has serious doubts whether the new plan will be effective at all, he tells according to the GTReview.

GTReview:

Harry Broadman, managing director and chair of the emerging markets practice at Berkeley Research Group, said during the same broadcast it is not immediately clear how B3W will differ from existing tools available to G7 member countries.

“These are the same countries who are the main shareholders of the World Bank, the IMF, the African Development Bank, and the like, and those institutions already have instruments and investments in place with frankly pretty good governance structures,” he said. “It raises in my mind the question as to what is the ultimate aim here.

“If you look at the communique from the summit, the wording of what the B3W means is really quite vague, which suggests to me this is – at least at this juncture – more of a branding exercise than boots on the ground.”

More at the GTReview.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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EU has no choice but work with China - Shirley Ze Yu

Shirley Ze Yu

The European Union needs to cooperate with China, argues Harvard scholar Shirley Ze Yu at Bloomberg. While the EU is contracting because of the coronavirus pandemic, China is still showing positive predictions, although at a lower level than in the past. China is eager to expand it's Belt&Road Initiative, and Europe can make good use of it, she tells.

Shirley Ze Yu is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers' request form.

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Xi Jinping's Eurasian ambitions - Shirley Ze Yu

Shirley Ze Yu

SE-scholar Shirley Ze Yu discusses China president Xi Jinping's Eurasian ambitions at the Belt&Road 2.0 Initiative for the Royal Society of Asian Affairs in London, including Huawei, 5G and the digital expansion of the country. She is currently writing a book on hardware giant Huawei.

Shirley Ze Yu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Reforms are key for China's rise as a superpower - Sara Hsu

Sara Hsu

Reforms are key for China to perform in terms of economic growth and developing into a superpower, says financial analyst Sara Hsu to ABC. The Belt and Road Initiative offers great prospects for the future, but still has to prove it is working, she adds.

ABC:

Economist Sara Hsu said that while China could be described as an emerging superpower, it has also recently slowed the pace of its many reforms that have been fuelling its growth. 

Dr Hsu said the changes being made were also insufficient to transform China into a real market-based economy to compete with the US and other developed economies, while adding that China's success with its Belt and Road Initiative is also yet to unfold. 

"If China is successful in spreading its soft power to other countries by helping them build viable infrastructure, this can boost China's status, but it will take time and hard evidence that China has what it takes to foster development partnerships in the global south," she said. 

But to be recognised as a true superpower, Dr Hsu said China needed to first reach developed-country status to earn the respect of other developed nations.

More at ABC.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How the Belt&Road Initiative forgot to include Chinese characteristics - Harry Broadman

Harry Broadman

China's Belt&Road Initiative (BRI) has been praised and criticized extensively, as the massive investment program moves on. The main problem of BRI is that it fell short of the Chinese characteristics that other foreign investment initiatives characterized, says investment analyst Harry Broadman in a column in the Financial Times.

Harry Broadman:

It would be disingenuous to blame the Chinese for their extraterritorial ambitions for regional economic development, especially from a European or US vantage point. Still, the process by which Mr Xi has developed and promoted his programme has created serious problems — indeed contradictions — that need not have arisen. 

The most salient and fundamental of these — which should be obvious to Mr Xi and his comrades — is the administration’s failure to structure the BRI in a manner consistent with the way China itself has engaged in economic reform so effectively since 1978: incrementally, collaboratively and through experimentation. These are the key ingredients whose use China has mastered over the past four decades to encourage the public to believe in and support its reforms. In effect, Mr Xi’s political ambitions for the BRI are lacking in core “Chinese characteristics”. 

Indeed, if there is one lesson the Chinese have taught policymakers the world over, it is that the probability of policy success rises dramatically when reforms are built on engendering “buy-in” from those directly affected and that, as new policies enlarge in scope, they should be modified to embody what has and what has not been found to be effective. 

This has been the bedrock of Beijing’s policies almost across the board, including reform of enterprises, cities, internal migration, pensions and the social safety net, education, environmental policy and more. 

Yet, instead, with the BRI, in one fell swoop Mr Xi has rushed to enlist more than 60 partner countries and sign more than 120 transport agreements, while unilaterally barring others from participating. 

The irony of the Chinese not following their own example is supreme. The negative fallout from Mr Xi’s tactics is occurring in multiple dimensions and, unless there are fundamental modifications, it will continue to haunt him. In conjunction with the external effects of the economy’s structural weaknesses, this could well jeopardise the success of the plan itself. 

Beijing’s attempt to rebrand the BRI as the “New Silk Road” has not helped. The analogy rings hollow. The ancient Silk Road was an amalgam of decentralised routes that evolved organically at alocal level, over the course of centuries. It was not a one-way hub and spokes  network; there was considerable variation among its routes, from where they sprouted up to where they terminated. 

Moreover, while some of these networks emerged as pathways principally facilitating trade in merchandise, most notably in silk and spices but also in arms, tools and the like, perhaps more important was their role in the exchange of ideas and cultures and in human migration.

More in the FT column.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why I sold my US stocks for Chinese equity - Jim Rogers

Jim Rogers

Renowned investor Jim Rogers, author of Street Smarts: Adventures on the Road and in the Markets sold his US stocks and changed them for Chinese equities, he told at Yicai Global. For him, the Belt and Road initiative fits into his optimistic view on China' economy, he adds.

Yicai Global:

China’s market has been bottoming out, while US shares have reached a record high, Rogers said at a recent investment forum in Beijing, according to a report in China Business Journal. The billionaire investor buys on the dip, he added. 

This is not the first time that Rogers has bought into a market trough. He invested in a large number of Austrian securities in 1984 when the country’s bourse was reaching its lowest point. The market sprang back to life a year later, surging 145 percent and handing Rogers a tidy return. 

The 76-year-old, who co-founded the Quantum Fund with George Soros in 1970, has a reputation for being a visionary international investor and one of US’ most successful securities brokers. 

The Belt and Road initiative is another source of his confidence in the Chinese market. The project will be vital to anyone who wants to make money, Rogers said, adding that he will closely monitor it for business and investment opportunities.

More at Yicai Global.

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Belt and Road: not all deals are solid - Arthur Kroeber

Arthur Kroeber

Concerns have been raised about the quality of the deals closed under the wide One Belt, One Road program. Economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know, admits that some deals could be "wacky", he tells the New York Times.“It certainly is a very capacious arena for opportunists, that’s for sure,” Mr. Kroeber added.

The New York Times:

As the economy shows signs of strain, Chinese officials are sounding caution about the program, taking a closer look at the financing of deals and the number of projects underway. 

That hasn’t discouraged some companies. 

“There are wacky deals that occur under the banner of Belt and Road because this is how every entrepreneur signals that they are in line with the leadership’s political objectives,” said Arthur Kroeber, managing director of Gavekal Dragonomics, an independent economic research firm. 

“It certainly is a very capacious arena for opportunists, that’s for sure,” Mr. Kroeber added. 

In addition to the Chinese-medicine spa in the Czech Republic, there are plans for Chinese cultural centers and theme parks in Hungary, Italy, the Philippines, Russia, Serbia and Vietnam. One construction firm used the Belt and Road plan to justify a deal to build an amusement park in an Indonesian complex that includes a Trump hotel and golf course.

More at the New York Times.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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What does China want? - Shaun Rein

Shaun Rein

China is adamant when it says it does not want to replace the United States as an international player. But what does it want, asks The Diplomat Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order. " Many nations feel Western, historically ethnically white nations have an outsized say in institutions like the World Bank or IMF and feel the U.S. contains their growth."

The Diplomat:

Describe the core construct of China’s new world order. 

American policymakers need to understand China is not looking to challenge and replace the American-led world order as the Soviet Union wanted during the Cold War. President Xi wants China to have a greater say in international affairs that an economic power of China’s size deserves. Many nations feel Western, historically ethnically white nations have an outsized say in institutions like the World Bank or IMF and feel the U.S. contains their growth. 

By launching initiatives like One Belt, One Road [OBOR] and using economic carrots and sticks with other nations, China hopes to gain more influence. Worried about President Trump upending long-term alliances and relationships, many nations like the Philippines are moving closer to China’s orbit and benefiting from China’s economic largesse. However, such economic carrots come with a price — adherence to China’s political aims and loss of political independence. Like it has done with South Korea, Norway, and Mongolia, China will punish nations that cross it politically by stopping trade and by using the state-owned media to rally consumers to boycott brands. 

Explain how China’s innovation and investment strategy shapes China’s world order. 

China uses economic carrots like low interest loans and infrastructure investments to curry political favor from nations in a divide-and-conquer plan. For example, many ASEAN nations criticize China for its reclamation of islands in the South China Sea which many countries view China using as unsinkable destroyers in the event of war. 

To blunt criticism, China essentially buys support from nations like Laos and Cambodia by showering them with low interest loans and infrastructure projects. In return, Cambodia mutes criticism of China in ASEAN pronouncements. There is clearly a quid pro quo deal in place. 

China uses similar strategies in Europe with Hungary and Ethiopia in Africa. For example, earlier this month every European nation ambassador in China except for Hungary signed a letter criticizing China for not opening up projects enough for foreign firms in the One Belt, One Road initiative. Most likely China will dole out economic benefits to Hungary in the coming months in a similar to way that it opened up 12 direct flights for Ethiopian Airlines to China, just weeks after Ethiopia publicly supported China while other African nations were criticizing it, making that country’s national carrier the main hub for Africa-China flights.

More at the Diplomat.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why China wants to rebuild Syria - Sara Hsu

Sara Hsu

Rebuilding war-torn Syria might cost around US$250 billion and China raised its hand to participate. Financial analyst Sara Hsu figures out what it behind that offer, while the rest of the world tries to steer clear from Syria, for Triple Crisis. China sees some clear interests, she writes.

Sara Hsu:

China’s choice to fund Syrian reconstruction also appears to be economically motivated, in large part because Syria provides an important pathway along China’s Silk Road. On the ancient Silk Road, the city of Aleppo acted as a key market for buying and selling international goods, and the west coast of the country continues to provide access to the Mediterranean Sea. At present, Syria has the potential to be an important logistics hub. Not only that, but the construction of infrastructure itself will generate income for Chinese firms that have shown interest in taking part. This will aid Chinese firms, especially since the Asian nation is going through a period of slowing economic growth that has led to lower rates of infrastructure investment. 

In addition, serious security will help ensure that Chinese investments in the region will remain intact. Some of these are located in Egypt, Iran, Turkey, and Saudi Arabia. The region is essential to Chinese investment in energy and infrastructure, and is viewed as an important crossroads between Asia and Europe. The security of this region can help to stabilize Xinjiang, home to Uighur separatists that China views as a threat to security and an important node on China’s new belt and road. 

The U.S., Europe, and Gulf Arab allies are steering clear of funding reconstruction in Syria, as they believe that the wrong side won the Civil War. These nations have called for Assad’s departure as a precondition for receiving reconstruction aid, as they believe Assad is responsible for myriad atrocities carried out on his own people. The U.S. took the side of moderate Syrian rebels. For his part, Assad has stated he will reject aid from nations that supported the opposition during the war. Syria has received aid from Iran, Russia, and China, and will likely continue to do so. 

Despite the opposition of the West against Assad, China’s decision to support the current Syrian government does not appear to be motivated by anti-Western sentiment or the desire to compete for influence with the United States. There are those who rally around the Chinese flag due to opposition to the United States, for sure, but these include less powerful nations, like Syria or Iran, that are politically and/or ideologically opposed to U.S. hegemony in the region and in the world. 

In conclusion, China’s position of support for Assad’s Syria underscores its security and economic interests in the region. While any measure of support for a particular regime may be viewed as political, China is attempting to refrain from engaging in directly political activities in the country and in the Middle Eastern region. China’s aim is to make economic gains through One Belt One Road, employing its own firms in the construction of much-needed infrastructure, and attempting to ensure security in order to do so. While the West may dislike China’s support of the Assad regime, China’s involvement in the reconstruction process is likely to bolster its role in the Middle East and strengthen its global soft power going forward.

More at Triple Crisis.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on China's One Belt, One Road program? Do check out this list.  

China "New Belt' program ready for renovation - Harry Broadman

Harry Broadman

When China's president Xi Jinping baptized his edition of the former silk road, he called it "One Belt, One Road". That idea and its name went against the idea of the old silk road, which was an organic set of trade routes, says Harry Broadman, former PwC Emerging Markets Investment Leader, in the Gulf News. The centralized approach by Beijing does not appeal to all stakeholders, he says.

Harry Broadman:

Only after criticism was voiced by a number of countries that Beijing was looking to sign up that the OBOR labelling conveyed China’s aim for regional domination did Xi ordered the “One” to be dropped. However, by the time the change was implemented damage has been done. In May 2017, Xi held a Belt-Road gala, but less than half of the 65 partnering countries were represented by heads of state. At the close of the summit, Xi issued a “joint” communique, but it was signed by only 30 countries. Not an overwhelming endorsement. 

And in the beginning of December 2017, Pakistan, Nepal and Myanmar announced they cancelled or sidelined three major Chinese hydroelectricity Belt-Road projects worth nearly $20 billion due to unfavourable financing terms or irregularities in the sponsoring firms’ irregularities. 

As China continues to roll out its Belt-Road program it would do well to work in full collaboration from the ground up with proposed partner countries.

More in the Gulf News. Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How to make money in China - Shaun Rein

Shaun Rein

Business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order explained at the Hong Kong Foreign Correspondents Club how foreign companies become winners and losers in China. The “methodical, systematic plan” to garner support for the One Belt, One Road initiative was the result of a “divide and conquer” strategy on the part of the Chinese government, he said.

The Hong Kong Foreign Correspondents Club:

“China is no longer a cheap place to do business. The cost of doing business is crazy high,” he said at the December 12 club breakfast. 

Rein pointed out that foreign brands including KFC and Starbucks make a huge profit in China. But he warned that multinationals were increasingly adhering to the political goals of Beijing in order to operate there. Publicly backing the One Belt, One Road initiative – President Xi’s development strategy to establish trade routes between Eurasian countries – is one way of staying in favour with the Communist Party. Those who speak out against China, said Rein, risk economic punishment or outright banishment. He gave the example of the Philippines, whose mango imports to China were blocked after an international tribunal on territorial disputes ruled in favour of the Philippines. The block was lifted once Rodrigo Duterte came to power in the Philippines and declared allegiance to China over America. 

“The theme of the book is that China punishes and rewards countries,” Rein said. But he added that now China has also started punishing foreign companies for the actions of their countries’ governments, citing South Korea’s Lotte Group, which provided land in South Korea for the U.S. THAAD missile system. 

Rein said the “methodical, systematic plan” to garner support for the One Belt, One Road initiative was the result of a “divide and conquer” strategy on the part of the Chinese government. 

He predicted that multinational financial services would continue to suffer in China, but that foreign insurance companies would flourish, as would wealth management.

More at the website of the Hong Kong Foreign Correspondents Club.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Management skills needed for China's outbound investments - Shaun Rein

Shaun Rein

One of the key barriers in China's massive outbound investment programs, like One Belt, One Road (OBOR) is the lack of management talents, tells author Shaun Rein of The War for China's Wallet: Profiting from the New World Order on the Human Resources page at LinkedIn. "Private Chinese companies have the capital and will pay for consulting services, especially companies in the tech sector."

Human Resources:

Rein: China wants to raise USD 1 trillion to invest in dozens of countries under the OBOR initiative in order to grow economically and cement power. What are the odds of success? I think it will succeed but it won't be easy. Many companies Chinese companies simply don't have enough management talent to operate across dozens of different countries led by diverse ethnic and religious groups. As companies grow regionally, they will need to recruit and retain the right country heads and regional leaders.Right now too much decision-making is in the hands of CEOs and founders. Chinese companies, as well as corporations from nations like Pakistan and Malaysia that are part of OBOR, will need to rely on executive search firms to find the right talent quickly.    

LZ: What sectors are Chinese state-owned enterprises and private Chinese companies investing in the most as they expand overseas? Are there specific regions or sectors they are targeted? 

Rein: Private Chinese companies have the capital and will pay for consulting services, especially companies in the tech sector. They understand they need top talent as they expand, predominantly into Southeast Asia and Africa.    

LZ: What are the underlying reasons behind the international expansion of Chinese companies? Are they political or economic? Do Chinese firms prefer to grow organically or through mergers and acquisitions? 

Rein: Chinese companies typically look to grow abroad for three main reasons: 

1. To gain access to technology quicker than developing it organically. We have also seen examples in the construction industry where Chinese companies grow via acquisition. Zoomlion acquired Dutch crane maker Raxtar to move into the high-end hoisting sector, for example. 

2. To acquire western brands to bring back to China. Building a strong brand can take decades, so it is easier for Chinese companies to buy brands abroad. A Chinese company bought Australian condom maker Jissbon, for instance. 

3. To diversify revenue streams. Although China still enjoys strong growth, it is not at the 10% clip of years past, so Chinese companies are looking to buy assets abroad to diversify revenue streams away from China. Businesses like Alibaba and Baidu, for example, have been investing aggressively in the US, for example.    

LZ: Some criticism of China’s outbound strategy is that companies, especially SOEs, bring their own machinery and talent pool when they expand abroad and don’t source equipment and labor locally as much as local politicians expected. Do you see non-Chinese nationals being allowed into key management positions to bring strategic input to the business? 

Rein: In some cases, China companies actively support promoting non-Chinese to senior executive positions.Take Geely automotive has injected capital and connections into Volvo but kept most of the leadership in charge of the famed Swedish automaker. In another example, Alibaba hired Michael Evans, formerly of Goldman Sachs, to be its president of international operations. Chinese firms acquire assets abroad to get brands, technology and management know-how.

More at the LinkedIn page of Human Resources.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you interested in more experts on China's outbound investment? Do check out this page.

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Is the China-US tension inevitable? - Shaun Rein

Shaun Rein

That is one of the key questions Shaun Rein asks in his upcoming book The War for China's Wallet: Profiting from the New World Order. On his LinkedIn page he invites you to discuss that important questions. Some of the participants might win a digital copy of the book.

Shaun Rein:

WCW looks at how China is cementing its power through economic carrots/ initiatives like One Belt One Road and by punishing countries like South Korea & Norway and companies like Lotte that do not follow its wants politically. The book looks at how China is dealing with Southeast Asia, the Korean Peninsula, the Middle East, and how the US needs to respond. 

These are turbulent times politically, and I wrote this book to help governments and companies understand how to navigate China's rising political ambitions. Many argue a war between the US and China is inevitable -- I disagree with this notion but better understanding is key as are building economic ties.

More at Shaun Rein's LinkedIn page.



Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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The debate on One Belt, One Road - Zhang Ying

Zhang Ying

The new Marshall Plan or a sneaky way China wants to conquer the world? The opinions on China's massive One Belt, One Road program go into both directions. RSM professor Zhang Ying summarizes both views on China's investment program that is changing the world, for Friends of Europe.

Zhang Ying:

The Eurasian Silk Road was developed over a thousand years ago, and then revived by China’s President Xi Jinping in 2013 as a part of the country’s economic transition. The Belt and Road Initiative (BRI), also called the New Silk Road and the One-Belt-One-Road, seems to have been widely accepted as an initiative to facilitate trade across the Eurasian continent, as well as geo-economic integration and global prosperity. 

However, it has been interpreted in various other ways. Two points of view stand out: There are those who view it as China’s latest strategy for boosting its slowing domestic economic growth. The others see it as a means to project China’s growing influence and an alternative to existing international geo-economic relationships. As such, the initiative has elicited respect, awe and enthusiasm among those who believe that it illustrates China’s visionary view of the future. But it has also raised questions over whether it is an altruistic contribution to the world, or just another plot by an egotistical “great power” to further its own self-interest. 

There are reasons for the concerns, just as there have been over the Trans-Pacific Partnership (TPP) promoted by the other “great power”, the United States. Some thought of the TPP as a beacon for global free trade, giving the economies of the Pacific Rim their own, well-deserved trading club. Others saw it as just another instrument for the US to align its Pacific Rim allies in an exclusive economic club. With the Trump administration’s unexpected withdrawal of the US from TPP, attention has shifted to the other forward-looking initiative Asian initiative, namely the BRI. As a result, China has been catapulted into the position of “thought leader” for a new world order. 

Those who criticise the BRI are opposed to change or motivated by populism rather than a vision of collective prosperity. However, over three years’ of BRI-related framework projects across the Eurasian continent, reality is beginning to sink in. Many countries have started to support BRI, because they see its tangible advantages, both in the short term and in the long run. Others continue to beat the drum against change. Another group is torn between believing in the benefits of the new vision but still fearing ramifications that they cannot fully grasp.

More in Friends of Europe.

Zhang Ying is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on One Road, One Belt at the China Speakers Bureau. Check out this list.

Related articles

• China's Silk Road Illusions
• Under Xi, China is heading into a new era, in which it hopes to be second to none
• Trump isolationism allows China to fill Southeast Asia void
• China's Xi Jinping Era

One Belt, One Road: too big to succeed? - Sara Hsu

Sara Hsu

China's close to one trillion US dollar investment program One Belt, One Road (OBOR) is facing serious pitfalls that could stop it from succeeding, writes financial analyst Sara Hsu in the Huffington Post. Insufficient due diligence is just one of a range of potential barriers, she writes.

Sara Hsu:

The question, though, is if it will succeed. There appears to be insufficient due diligence in some cases, which carries political and financial risks. For example, work on the Colombo port project in Sri Lanka and a high-speed rail plan in Indonesia stalled due to local opposition. In other areas, like Gwadar in Pakistan, security is a major concern.

Projects funded by the Asian Infrastructure Investment Bank are more likely to be carefully weighed in terms of risk. By contrast, projects financed by the China Development Bank or the Export and Import Bank of China may undergo standard examination but, as part of an array of projects on the table, may be short-changed in full analysis and oversight. AIIB has provided $1.73 billion for nine Belt and Road projects. The overall figure for projects in the planning or implementation stages is $900 billion. 

The vast majority of funding for Belt and Road projects comes from the Export and Import Bank of China, China Development Bank and China’s commercial banks. China’s policy banks are overbooked: in 2015 alone, the China Development Bank said it had reserved $890 billion for over 900 projects. What is more, the Export-Import Bank of China stated at the beginning of 2016 that it had funded over 1,000 projects. How can these large development banks plan and oversee that many projects?

More in the Huffington Post.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on China's outbound investments at the China Speakers Bureau? Do check out this list.