China, EU must fight ignorance through B&R

By Carlos Santana Source:Global Times Published: 2018/7/11 22:23:40

Illustration: Luo Xuan/GT


Many countries are embracing the Belt and Road (B&R) initiative, from Asia to Europe, and even across South America. However, there are still many governments, institutions, companies, industries and other stakeholders in the international arena that do not understand the initiative or know what it is about. The ignorance over the B&R has been one of the major obstacles in achieving maximum capacity during the return journey of cargo trains from Europe to China. Usually the trains, developed as part of the B&R, travel full to Europe, but return to China with less frequency and fewer goods.

The B&R is not only about trains, airports and infrastructure. It is much more. The initiative includes much of what China is doing outside its borders in terms of the economy, politics, development, infrastructure and trade. China has been focusing on its internal economy for the past decades, with great results. Although it has reached a considerable level of development, going abroad is necessary in order to make it sustainable. It is a consistent plan of internationalization.

The Chinese government has been leading and organizing the development of the country since reform and opening-up. Beijing has taken the initiative and leadership, rather than leaving it in the hands of the private sector as in the US, for example. The formula (with some differences) has been applied often in many other countries such as Japan, Singapore and South Korea. China's government and its leaders have been legitimated thanks to the enormous success of the growth and wealth achieved in recent decades. This, plus the unconditional support of its people, will help Beijing apply the same formula abroad. But China understands perfectly that growth cannot be achieved unilaterally, and is therefore inviting all countries to join in its internationalization efforts.

The trade balance between Spain and China is not equal, so it is normal that the amount of cargo exchanged between the two countries is not either. This is also true with the cargo exchange via maritime logistics. However, there are many measures that could be taken in order to improve B&R operations in the direction of Europe to China.

Among governments, think tanks, political and economic experts, the B&R and its implications are well known. On the other hand, this information has perhaps not reached the companies and industries best positioned to take advantage of the train line or other B&R projects.

Institutes specializing in the B&R initiative should be created both in China and the EU to act as interlocutors and bridges between companies and institutions, as well as to identify and promote B&R projects and opportunities. The main role of these official and government-dependent institutes will be to act as a platform for all the projects and possibilities around the B&R, functioning as a bridge for the flow of information between China and the EU and also the public and private sectors. They should communicate the different opportunities of the B&R through the proper channels.

Another measure that could be taken to improve the express railway line is facilitating the entrance of European products to China. The Chinese government has a unique opportunity to approach the EU and finally open up the market. The upcoming exhibition of import products to be hosted in Shanghai in November is proof of the Chinese leadership's conviction to move in that direction. New agreements in terms of protocols will be key to making the line operate at its maximum capacity. However, it is also vital for the Chinese government to help normalize the relationship between Moscow and Brussels; otherwise the cargo headed for China from Europe will not be able to pass through Russia.

European factories and suppliers look forward to being able to reach Chinese consumers. Among fruit producers, especially, there are great expectations. But only a reefer container, which is not yet available on the express line, will make that possible. China, as one of the world's biggest players in train construction, could definitely help with this.

As the line runs between Yiwu and Madrid, there are some things Spain could do to improve operations for the returning trains. If Spanish institutions support, understand and positively view the B&R, Barcelona could and should become another stop on the line. The train could arrive from China to Spain through Catalonia, continue to Zaragoza - where companies such as Inditex, Adidas, General Motors and BSH have distribution centers - then finally arrive in Madrid.

The same route could also be done in reverse, thus increasing exports of products from Spain to central Europe and Asia, which would be beneficial for many companies since it would lower the cost of transportation. In addition, rail cargo could be consolidated in the port of Barcelona to continue by sea to the other side of the Atlantic and the north of Africa, making Spain the port of China in Europe and a hub for South America, thanks to direct connections between Barcelona and Brazil, Colombia, Argentina and Uruguay.

The author is director with the Mundiver Group and senior consultant with the Yiwu-Spain Foundation.

Posted in: INSIDER'S EYE

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