On the 2019 Annual Meeting of China Development Forum from March 23rdto 25th, Siemens AG delivered a report titled BRI 2.0: How to Follow the Call for International Triple-win Cooperation with Sustainable and High-quality Infrastructure Projects?
Infrastructure is the backbone of a country’s economic development and the base for the provision of quality services to its citizens. The development of its infrastructure also defines the competitiveness of an economy, the easiness to connect with other countries and the ability to manage future challenges. Infrastructure projects, as realized within BRI, are usually complex and go along with high-volume and long-term investments. In many countries, the decision for such a project has a deep impact on its future development. The country’s needs, plans, specifics and capabilities are to be understood and to be considered in the project definition. This requires a close dialogue with all relevant stakeholders (government, companies, citizens) right from an early stage and the economy of the country of installation is to be integrated into the project realization. An intensive integration of local companies in the design and realization of such projects creates local jobs and income, supports the increase of competencies and facilitates the project’s acceptance within the respective society.
Multi-national companies (MNCs) with long-standing international experience and local knowledge as well as a strong economic performance and technological innovation power are a key success factor for BRI. The knowledge of local markets and requirements in current and future BRI countries, gathered in decades of onsite experience, is an asset they can bring to the game. Local value creation, local sourcing, and an established collaboration with local partners is a necessary prerequisite, if Belt and Road aims at bringing tangible value to local societies, e.g. by educating local workforce through dual vocation education and training. On the other hand, naturally, a proven track record of successfully and cooperatively working with Chinese partners, in China and abroad, is just as important. In providing this scarce combination of competences and experiences, such MNCs can truly act as “Bridge Builders” between China, international suppliers, local customers and governments.
A more open cooperation platform can promote the establishment of a fair, reasonable, and transparent international economic and trade investment system, helping the international community understand and accept the Belt and Road Initiative and encouraging the active participation of major countries around the world.
At its 5thanniversary and after more than 3.000 realized projects, BRI is at an early stage by looking at the still existing enormous infrastructure needs worldwide. Implementing certain standards in infrastructure across all countries, improving the connectivity and supporting the competitiveness of economies with infrastructure will continue to generate many more infrastructure opportunities and projects in the future. This task cannot be handled by one nation and one economy alone. Cooperation on different layers (e.g. technology, finance) will become more crucial for a continued success in the realization of the BRI idea.
For facilitating this path, it is recommended:
1. Continue the intensification of the dialogue with all involved parties (governments, customers, population) for understanding and considering the various needs, positions and pain points in the planning and realization of BRI projects.
2. Increase the transparency and information on BRI projects to enable national and international companies to actively introduce their experiences and capabilities in the planning and realization of BRI projects.
3. Actively engage international partners (MNCs) with profound experiences and deep roots in the countries where BRI projects are to be realized. For a successful BRI project realization a multitude of competences is needed: knowledge of local market needs and specifics, innovative technologies, expertise for the planning and execution of long-term and complex projects, people development skills, and financing capabilities.
4. Open the bidding process on BRI projects to national and international companies to foster competition and to facilitate the optimization in solution design and resource allocation.
5. Increase the share of sustainable local value add in BRI projects by including local companies in a responsible and respectful way.
6. Increase the stake of national and international commercial banks in BRI financing to widen the capital pool, to distribute the financial risks, and to increase the financing quality of BRI projects.
(Source: China Development Forum 2019 Annual Report)