B&R projects must bear market principles in mind

By Shou Huisheng Source:Global Times Published: 2018/5/9 21:08:42

Illustration: Luo Xuan/GT



 

When a project connected with the Belt and Road (B&R) initiative is being discussed, choosing the appropriate cooperation partners and jointly pursuing a sustainable future should be basic principles.

Companies can first carefully analyze their strengths and seek countries or regions with the strongest complementarity in which to invest. If obstacles or questions are encountered in the process of communication, instead of being anxious, more patience should be taken to find the proper entry point.

During the stage of project matchmaking, the leading roles of the local people and local government must be emphasized, their interests and social values should be respected, and common interests between two sides should be found clearly.

Enterprises cannot simply ask other countries to accept their own plans by following the past development model in China. A sustainable project should be controllable and beneficial in the long term by both investors and recipients. This is the law of the market.

To fulfill all these requirements, patience is needed and quick success should be avoided. Enterprises should also communicate actively with the local government and people so that their willingness to contribute to local development can be effectively conveyed. Projects that correspond closely to the development needs of the target markets are more likely to be successful.

B&R-related cooperation between China and Russia is a good example. Before the Ukraine crisis, Russia was hesitant to get involved in the B&R initiative. But after the incident, Russia gradually began to adjust its development strategy, and its attitude toward the initiative becomes more positive.

Some enterprises have seized the opportunity and managed to promote a series of well-run projects, and cooperation between China and Russia has become even closer.

According to Sputnik news, China Railway Construction will launch the first site-to-site tunnel construction project in May in Moscow. This is the first time the city and Russia as a whole have involved foreign companies in subway construction. Even in the Soviet era, it would have been rare.

If there is no consistent agreement with the development policies of the target markets, and no consideration is given to sustainable development, it will not only affect individual projects but also cause dissatisfaction and misunderstandings. The values of the B&R initiative won't be transmitted.

For example, countries such as Mongolia have a fragile ecology. Some companies that invested in mining and other resource-intensive projects in these countries caused severe environmental damage and aroused local dissatisfaction.

Another lesson is that some of the B&R-related projects relied too much on Chinese labor, which deprived local people of jobs. But this problem has greatly receded in recent years.

In a situation where the world economy isn't booming, the B&R initiative is actually a public good provided by China, which hopes to share development opportunities with other countries and regions in an open and inclusive manner and explore new cooperation forms that can bring mutual benefits.

Enterprises should firmly keep this point in mind: When developing projects, they must learn more about the development plans and policy guidelines of the target markets, make reasonable plans and pursue a win-win situation. However, companies must strike a proper balance and avoid becoming political victims.

We must realize that respecting the political system of the other country does not mean that our companies should get too involved in local politics. This not only increases risks - it also violate the original intention of the B&R initiative.

B&R-related projects are primarily commercial ventures. So although political factors, geopolitical factors and even national strategic intentions need to be taken into consideration, all these factors must be subject to the commercial and sustainable nature of the B&R initiative. Projects must respect and safeguard the capital of investors. We cannot allow these investments to be overridden by politics. Otherwise, it would be hard to ensure the continuity of capital injections.

It is also necessary to respect the interests of the target markets and be responsible for their long-term benefits. To achieve sustainable development, we must ensure that projects are acceptable.

The author is a research fellow with the National Strategy Institute of Tsinghua University. bizopinion@globaltimes.com.cn



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