The Belt and Road Initiative created by Xi Jinping some five years ago continues to form a major part of China’s international political agenda. Initially proposed as a development vehicle mainly for countries in immediate proximity to China, it now seems to encompass a much wider geographical remit. Many now claim it even has a global footprint – and in the immediate aftermath of the US-China trade war, won, some would say, by Trump, it is taking on even greater importance on the global stage.
From a European perspective the story of the BRI is a mixed bag of optimistic rhetoric and political suspicion. While in January 2017 the first-ever freight train from Yiwu in China that rolled into a siding in Barking, East London was broadly unreported, the sale of the Port of Piraeus in 2016 to the SOE China Ocean Shipping (Group) Company created political uncertainty across Europe: cash-strapped Greece allegedly had given China’s fleet access to a rail bridgehead to explore Southeast Europe. Stories of Chinese investment in everything from technology companies to football clubs have served both to excite and worry in equal measure. However, despite the sky-is-falling noises mainly from nationalistic European politicians, Chinese investment across Europe remains both sought-after and welcomed by business.
Why? Commercial pragmatism is the answer.
Businesses are less interested in political point-scoring than they are in financial gain and increased shareholder value. Through the lens of strategic economic growth, businesses across Europe see opportunities rather than systemic risk from developing relationships and commercial relationships.
Taking a UK perspective, there remain significant benefits to be realised from both the reality of BRI as well as its ‘halo’ effect.
In my hometown in Yorkshire in the North of England, the BRI is little understood. However, there is a palpable excitement around the prospect of trading with China and working to find ‘win/win’ scenarios.
We recently heard of Toshiba’s decision not to pursue a major development in Northwest England, dashing hopes of 2,000 new jobs and economic security for that part of the UK. What will replace this lost hope? We don’t know, but most local governments and business development organisations are somewhat agnostic regarding where investment comes from. “If it’s China, so be it,” a senior regional business leader commented to me recently. “Investment which takes a long-term view is to be welcomed and not stifled”.
This openness to China—despite the apparent worries of some—is to be found across the UK and Europe. Business is global, and in a digital—always on—Fintech world, consumers transcend borders, businesses seek new markets and new value lines are created all the time.
I met three local entrepreneurs earlier this week in my hometown of Harrogate, North Yorkshire UK. They were all excited to be flying by Hainan Airlines from Manchester to Beijing to meet potential distributors for their products of local water, gin and craft beer. As I briefed them on the practicalities of doing business in and with China they did not dwell upon the negatives or the possible political risks. Instead, the talk was of market opportunity, shared economic benefit and shared risk with new partners. It wasn’t BRI that drove the debate, but without the simple notion that China is ‘open for business’ these entrepreneurs wouldn’t be getting on a flight at all.
The BRI is therefore an enabler and a catalyst for local development as much as it is a series of high-level government-to-government agreements.
At the frontline of economic reality marches job creation and profitable growth. These ancient impulses have sparked a new interest and enthusiasm from grassroots business to work with China. Even given the nationalistic rhetoric emanating from certain countries, cooler heads are looking at the potential for dynamic growth. Deng’s cat would feel quite at home in Europe.
Jon Geldart is based between his office in Beijing and Harrogate N. Yorkshire in the U.K.. In China he is Executive Director Markets Development – Greater China for Grant Thornton International Ltd. In the UK he is the Chairman of the Institute of Directors Yorkshire & Humber. He has worked in and with China for the last 9 years.