Skip to main content

UK supports the ‘Belt and Road Initiative’ behind the scenes



Among the more visible areas of involvement is finance, with British banks quick to join China’s global trade initiative

Nazvi CareemUPDATED : Thursday, 20 Sep 2018, 12:31PM

British Prime Minister Theresa May was careful to ensure that there was no official backing for China’s “Belt and Road Initiative” when she led a major trade delegation to Beijing in January.

But there is indirect support as Britain searches for strategic partners in a post-Brexit era. “For the UK, the recognition of its new status – clearly out of the European Union and most likely a hard Brexit scenario – has pushed May towards an intermediary role,” Natixis said in a report summarising May’s visit with about 50 ministers and business leaders.

The UK will become the first large advanced economy to support the initiative, if not directly. London is also identified as a key participant for financing. British and Chinese banks are invited to collaborate in financing the initiative, and the UK government has agreed to contribute to a new Asian Infrastructure Investment Bank (AIIB) fund for the same purpose.

NATIXIS REPORT

“The UK government has been trying to switch towards a more bilateral relationship with China and two major issues stand out this time.

“First, the UK will become the first large advanced economy to support the initiative, if not directly. London is also identified as a key participant for financing. British and Chinese banks are invited to collaborate in financing the initiative, and the UK government has agreed to contribute to a new Asian Infrastructure Investment Bank (AIIB) fund for the same purpose.

“Second, Theresa May has clearly pushed for London to connect to China’s capital market. The most imminent action will be a London-Shanghai Stock Connect. A bond connect is also mentioned but is clearly less immediate,” said Nataxis.

The visit ended with delegates finalising deals worth about £9 billion (HK$92.34 billion) in areas such as finance, innovation, agriculture and technology, according to China’s Ministry of Commerce.

Among the more visible areas of involvement is finance, with British banks quick to join China’s global trade initiative, led by Standard Chartered.

“It’s huge,” Standard Chartered CEO Bill Winters was quoted as saying. “The private sector capital that comes in afterwards will be really impactful, assuming it happens.

“Our job is to try and pull the different pieces together, because there will be some local financing required,” he said.

The bank has won 20 related financing deals over the past four years – including a US$515 million project financing for a power plant in Zambia, a US$200 million loan for a Bangladesh electricity plant, and a US$42 million export credit facility for a gas terminal in Sri Lanka.

A memorandum of understanding was also signed with the China Development Bank to grant loan credit of 10 billion yuan (HK$11.46 billion) to help finance such projects.

Ben Hung, Standard Chartered’s head of Greater China North Asia, and group head of retail banking, reiterated the bank’s commitment at its results announcement in February. He said it was involved in more than 50 deals related to Beijing’s plans to grow global trade.

“In reality, a lot of these projects tend to start with some form of bidding. You have to do escrow accounts and FX services before you get into project financing,” he said. “But it doesn’t matter at what stage these projects are – our footprint is ‘so belt and road’.”

Natixis outlined a number of outcomes from talks regarding the trade initiative after the UK delegation’s visit to Beijing.

The outcomes included a detailed discussion about potential aspects of cooperation in the “Belt and Road Initiative”, an agreement to implement the Belt and Road Financing Guiding Principle and promote cooperation on investment and financing under the Initiative, and an announcement by British Standard Chartered of further financing commitment to the Initiative.

A further outcome is both sides agreeing to deepen Belt and Road project identification, research and capacity building. In addition, the UK Export Finance (UKEF) is to support up to £25 billion of new business for projects along the path.

A proposal was put forward for a bilateral UK-China investment fund with an initial round of US$1 billion to invest in the UK, China and the third markets to support the Initiative.

China Development Bank and the UK will discuss the possibility of establishing investment funds for better cooperation between Chinese and British companies.

Liam Fox, the Secretary of State for International Trade, urged British businesses to embrace such projects when he spoke at the China All Party Parliamentary Group, saying that exports of British-made goods to China rose by 34.9 per cent in 2017.

Fox said that the UK’s strong reputation in services, consumer goods, and advanced manufacturing makes it perfectly suited to meet the needs of China’s dynamic economy, as well as playing a part in China’s global trade initiative.

Fox said the potential for UK companies was particularly relevant to “sustainable infrastructure, financial and legal services, innovation and technology, and public health”.

“If well implemented, the ‘Belt and Road Initiative’ could help support development and global economic growth across Asia and beyond,” he says.

“We are preparing for a new chapter, post-Brexit, in our golden era of bilateral relations,” Fox said, pointing out the attractiveness of the UK as a place to do business, and its “personal ties” with China.

Jim O’Neill, chairman of British think tank Chatham House, said last week that Belt and Road was “possibly the most important thing for the future of world trade”.




https://www.scmp.com/special-reports/business/topics/special-report-belt-and-road/article/2164842/uk-supports-belt-and

Comments

Popular posts from this blog

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

Balochistan to establish first medical university

https://www.dawn.com/news/1366135

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

The Rise of China-Europe Railways

https://www.csis.org/analysis/rise-china-europe-railways

The Rise of China-Europe RailwaysMarch 6, 2018The Dawn of a New Commercial Era?For over two millennia, technology and politics have shaped trade across the Eurasian supercontinent. The compass and domesticated camels helped the “silk routes” emerge between 200 and 400 CE, and peaceful interactions between the Han and Hellenic empires allowed overland trade to flourish. A major shift occurred in the late fifteenth century, when the invention of large ocean-going vessels and new navigation methods made maritime trade more competitive. Mercantilism and competition among Europe’s colonial powers helped pull commerce to the coastlines. Since then, commerce between Asia and Europe has traveled primarily by sea.1Against this historical backdrop, new railway services between China and Europe have emerged rapidly. Just 10 years ago, regular direct freight services from China to Europe did not exist.2 Today, they connect roughly 35 Chinese…