China Direct

EY navigates Belt & Road Opportunities with 3rd global Report

 

CBI member, EY has launched the third issue of its Belt & Road report, titled Navigator. The report focusses on the opportunities for foreign companies to partner with Chinese counterparts for ‘third-party market cooperation.’ Navigator homes in on the geo-political issues inhibiting the development of existing BRI projects, as well as the imbalance in sophistication between British, European and American firms and their Chinese counterparts.

The report features a case study examining the success of UK and Chinese businesses collaborating along the BRI. EY have identified infrastructure construction and financial cooperation between the UK and China as the two areas where the UK and China are highly complementary. According to EY, in the field of infrastructure construction, the UK has advantages in engineering design, law, consulting and management, while China is strong at construction efficiency, engineering technology innovation, cost control, supply chain management and cost performance. In financial services, Navigator identifies the UK’s tradition as an international financial centre and its long-standing trading history with many of the 3^rd markets China wishes to engage along the BRI. Moreover, the UK was the first Western applicant to join the Asian Infrastructure Investment Bank, and the first to sign the Guiding Principles on Financing the Development of the Belt and Road.

Navigator also features updates on the progress of wider multilateral BRI initiatives, such as achieving stronger policy coordination between China and BRI partners, facilities connectivity, financial integration, unimpeded trade and people-to-people exchange.

The findings of the report corroborate what the CBI Beijing office has heard from members regarding the pros and cons of cooperating with Chinese partners in 3^rd markets. That is, that niche opportunities exist for UK companies who are able to assist Chinese SOEs by underwriting projects along the BRI, as well as ensuring adequate legal frameworks are in place to reduce risk when foreign and Chinese companies cooperate in 3^rd markets.

To read the report in full, please follow the link.

Pinsent Mason powers brand along the Belt & Road

The multinational law firm and CBI member, Pinsent Masons has announced that it advised on a major $530 million Belt & Road power station deal in Pakistan. Pinsent Masons worked in cooperation with the Chinese engineering SOE, China Machinery Engineering Corporation, and provided counsel on brokerage and international trade and arbitration. This involved Pinsent Masons acting on behalf of Thar Energy Limited, one of Pakistan’s biggest power stations developers, on the ground in Pakistan.

Subsequently, Pinsent Masons managed to secure the financing of the power station, which will provide a power generation output of 300MW and will be coal-fired. The power station is positioned as an integral part of China’s Belt & Road, Pakistan Economic Corridor.

Pinsent Masons has played an active role in securing funding for initiatives involving Chinese partners along the Pakistan Economic Corridor since 2015. In the first instance, the law firm advised on the initial $700 million financing of a coal mine that was commissioned to provide resources for energy production and a $821 million power station that would take these resources and guarantee energy along the route.

The fact that Pinsent Masons was then asked to advise on a second power station highlights the fact that opportunities exist along the BRI for foreign firms which are able to provide specialist advise and support to Chinese companies operating an international setting.

The deal was negotiated and delivered by a cross border team working from Pinsent Masons’ offices in Beijing, Hong Kong, Singapore and Dubai. David Platt, lead partner said, “We are proud to have been an integral part of this project from the beginning. Not only is it extremely significant as part of the wider Belt & Road Initiative, it will help Pakistan’s energy landscape and resource.”

The transaction was signed in front of members of the China Pakistan Economic Cooperation Corridor Joint Committee. and China Machinery Engineering Corporation.

Intesa Sanpaolo 'Greater Bay Area Innovation Road' highlights European business opportunities

 

The Italian banking group, Intesa Sanpaolo has launched its Greater Bay Innovation Road initiative in partnership with fellow CBI member, Deloitte. The mission aims to partner 14 Italian technology companies that are focussed on promoting internationalisation and innovation with Chinese partners operating within the “Chinese Silicon Valley” in Guangdong province.

The Greater Bay Area Innovation Road initiative (GBA) is the latest in a series of collaborative projects involving China and European partners. On the bilateral level, China is already working with Germany, France and the UK through a series of ‘CEO Councils’ to create new synergies between companies with the potential to deliver domestic infrastructural development through business to business engagement. The CBI serves as the Secretariat of the UK CEO Council, which recently entered its second year.

The Intesa Sanpaolo GBA presents another example that is illustrative of the point that China is taking steps to demonstrate its commitment to engaging with foreign partners to bring about market access reform and opening up. Furthermore, with the Italian Intesa Sanpaolo GBA focussed on connecting companies aiming to develop financial and technological partnerships, the German CEO Council focused on commodities and heavy industry, and the UK’s own CEO Council featuring companies predominantly drawn from the manufacturing and financial services sectors, it is clear to see that China is interested in engaging with Europe across a wide-range of sectors and ambitious regarding the width and breadth of its participation in the European markets.

Moreover, the Intesa Sanpaolo GBA initiative presents a good case example for companies based in the UK and European 3^rd markets trying to gauge China’s appetite for collaboration.

The Italian delegation features companies operating in a variety of sectors, including artificial intelligence, bio-technologies and component and semi-conducting manufacturing and assembly. The delegation will meet with 81 top-ranking Chinese companies to participate in talks and receive training on best practise when investing into China and Italy and carrying out research & development. The fact that for every individual Italian member company, China is interested in promoting five demonstrates clearly the appetite in the Mainland to engage with the European business community.

China’s Greater Bay Area has become a hot-spot for European investment in China in recent years, and UK companies are particularly well positioned to benefit. This is because the Bay Area is a start point of the Belt & Road Initiative, with the UK serving as one of the BRI’s end-points.

UK – China success stories are already emerging from the Bay Area. CBI member, Clifford Chance recently reported that it had advised Bank of China on a $1.83 billion bond deal in support of the Greater Bay Area’s infrastructural development. Engineering consultants, Arup are at forefront in providing solutions for infrastructure management, and recently delivered a major overhaul of Hong Kong’s sewage system. Small and medium sized companies are reporting success within the Bay too. Nottingham-based signage manufacturer and CBI member, Pearce Signs opened an office in Hong Kong in the August of 2018 and has successfully added Asia to its portfolio.

What examples such as the Intesa Sanpaolo Greater Bay Area initiative show is that big business to small, Chinese companies are looking to engage with European – and by extension – British businesses. Please find below some helpful links from organisations which work closely with the CBI’s office in Beijing on how UK companies can engage with the Greater Bay Area and the Belt & Road Initiative.

To read more about Intesa Sanpaolo’s Greater Bay Road Initiative, click here.

China – Britain Business Council – Belt & Road Case Studies Report

The EU SME Centre – Belt & Road Opportunities and Challenges

 

Marsh launches BRI China desk in Dubai

 

CBI member, Marsh has launched a China desk in Dubai to benefit from the commercial links developing between the two countries as a result of the Belt & Road Initiative.

One of the world’s largest insurance brokers and risk advisers, Marsh aims to use its new Dubai-based China desk to act as a conduit for regional business emerging from China’s BRI. According to Christos Adamantiadis, Middle East and Africa chief executive, “Marsh has already picked up deals related to infrastructure projects [in Dubai], there is exponential growth, but it’s starting from a low base. […] Our main focus is China and Chinese contractors and principles.”

Africa and the Middle East are an important part of Chinese President Xi Jinping’s Belt & Road Initiative, which turned five in 2018 but whilst received heavy criticism. China hopes that the $126 billion initiative will bring about a network of infrastructure projects connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa.

However, at fifth-anniversary celebrations and a high-level diplomatic gathering of African leaders in Beijing in 2018, the project came under fire from both Chinese citizens and those living along the BRI alike.

Foreign companies in China are now increasingly reporting that they are finding opportunities in supporting Chinese state-owned enterprises along the BRI. These opportunities predominantly concern providing consultancy services on establishing best practise guidelines, and facilitating international cooperation in market.

HSBC, Standard Chartered and Citigroup all already have China desks in the emirate as a result.

A key factor in Marsh choosing to join these companies in Dubai, rather than establish itself in one of the other emirates, is the fact that Dubai has attracted significantly more attention than any of the other emirates within the UAE. The number of Chinese visitors to Dubai last year was up by almost 10%, and the emirate received Xi Jinping for a state visit in August.

DHL increasing China Greater Bay area investment

 

German logistics giant and CBI member, DHL announced last week that it plans to increase its investment in China.

According to DHL Express China CEO, Wu Dongming the firm hopes to benefit from the recent opening of the Hong Kong – Zhuhai – Macao Bridge and associated government-sponsored initiatives related to the Belt & Road Initiative, which has a start point in the Greater Bay Area. More specifically, the added investment will focus on expanding service facilities in Hong Kong and Guangzhou, enabling DHL to increase the capacity of their freight flight services from South China to Germany.

In addition to announcing plans to increase investment in the Zhuhai / Greater Bay area, DHL launched a new freight flight service from Guangdong to Leipzig last Friday.

Demand from Chinese manufacturers has risen to such an extent that despite the company operating flights from Shenzhen to Leipzig six times a week, the company needed to introduce a new route to boost capacity. The new Guangdong to Leipzig route will help DHL cater to the demand from Chinese manufacturers for delivery services in Zhuhai, Zhongshan, Jiangmen and Foshan in Guangdong province. The added investment will extend DHL’s lead in the China market, where the company is already the air freight market leader.

The company announced in a press release that these steps were merely the first in a plan to further DHL’s ‘Guangzhou Gateway’ and benefit from the accelerated economic integration and development taking place in the Greater Bay area.

DHL China employs over 7,000 people and offers China-connectivity to over 401 cities worldwide and domestic transportation to 128 cities within China.

Please read more here.

British Business Awards 2018 China Finalists announced!

After a rigorous vetting process of applications for the 2018 British Business Awards, finalists for each of the 9 categories of awards that are open this year were announced today.

Applications for the awards were submitted from the 7^th of June, with applications being received from British companies right across China and Chinese companies in the UK. After receiving applications, expert panels of judges across all nine categories evaluated entries and decided upon the finalists for each category.

Finalists for the 2018 British Business Awards are as follows:

Entrepreneur of the Year Award: Christopher Dobbing – Cambridge Masks Edward Peto – Outdustry Richard Craggs – Nom Nom Rupert Hoogewerf – Hurun Report Inc. Robin Dell – imondi

Sustainability Award Sponsored by Harrow: University of Nottingham Ningbo China Spiraxsarco Engineering (China) Ltd. imondi David Luke BIEA

Education Institutional Partnership of the Year Award Sponsored by British Council: University of Reading University of Edinburgh University of Birmingham NPTC Group of Colleges New College Lanarkshire

Innovation Award Sponsored by BP: TechTrek Modern Water WorldFirst Teledyne e2v Dyson Technology (Shanghai) Ltd.

Chinese Investor in the UK Award Sponsored by KPMG: BCEG Geely Ctrip

Belt and Road Award Sponsored by The University of Manchester: Standard Chartered Bank Atkins Wood ACCA LAOWAI HERE

Inspiring Women Award Sponsored by British Council: Cecilia Xu Sarah Keenlyside Rachel Pinniger Jane Sun Carrie Yu British

Company of the Year Award Sponsored by GSK: Spiraxsarco Engineering (China) Ltd. Savills Wood Nom Nom Bupa China

40 Years of Reform Award Sponsored by Geely: BP Rolls-Royce PLC Arup Savills GSK China
 
Download Announcing the Finalists of the 2018 British Business Awards

UK Season in Shandong Sept - Nov 2018

Dear CBI Members and Partners,

Please note that Sept - Nov will mark the UK Season in Shandong Province with a focus on the following key sectors/areas:

• Advanced manufacturing
• Financial services (capital markets)
• Marine sector (including maritime arbitration)
• Higher education
• Seafood
• Sport
• Tourism
• Plastic Pollution
• Gender equality (Pledge for Progress)

More details and information to follow shortly.

Many thanks

China Direct

 

Dates for Diaries: British Business Briefing Q2 Shanghai 27-07-18

Dear CBI Members and Partners,

Kindly note that there will be an update on the China International Import Expo (CIIE) and a range of other UK-China business activities scheduled for the remainder of 2018 on 27.08.18. The briefing will take place at the British Centre in Shanghai.

The event will be hosted by our partners the CBBC and the British Consulate (Shanghai). Please refer to the attached document and agenda for more information.

If you have any questions or wish to obtain further information following the Briefing please contact [email protected] or call: +86 10 85253100 next week (30.07.18) onwards.

Many thanks.

Download CBBC British Business Briefing 2018 Q2 27JUL

City Corporation puts London on the Belt and Road map

 

 

CBI Member City of London Corporation Policy Chairman Catherine McGuinness will present ‘Belt and Road: London on the Map’ to senior Chinese financial figures during a visit to China next week, where she is travelling to speak at the Lujiazui Forum in Shanghai.

The publication presents for the first time how firms from the UK financial and professional services (FPS) sector are involved in the BRI, including Standard Chartered, HSBC, Linklaters, Clifford Chance and UK Export Finance, bringing together specific examples of projects underway in countries along the initiative.

It also highlights London’s strengths as a hub for the soft infrastructure required by the BRI, with the aim being to advertise London as the ideal partner for companies involved.

Partnerships between UK and Chinese firms can support infrastructure development in the near 60 countries and regions involved in the BRI, especially collaboration on projects and initiatives in third countries where UK and Chinese strengths are complementary.

The publication, produced in English and Chinese, will be launched at a reception on Wednesday 13 June 2018 in Beijing, which will also celebrate the 10th anniversary of the City of London Corporation’s representative office in the Chinese capital.

City of London Corporation Policy Chairman, Catherine McGuinness said:

“This publication is a small but powerful advertisement for London’s involvement in the Belt and Road.

“It shows specific examples of how UK firms are already active in the Initiative, and explains clearly how we can further be involved.

“I look forward to seeing all future Belt and Road maps showing London as the natural, western hub of the Initiative.”

UK Minister of State for Asia and the Pacific, the Rt Hon Mark Field MP said:“The UK and China are global powers with a global outlook.“We welcome the potential opportunities the Belt and Road Initiative could bring as a means of driving global growth and enhancing development outcomes.“It presents another opportunity for the UK and China to work closely together under our Global Strategic Comprehensive Partnership. The City of London’s world-class expertise makes it an excellent partner for collaboration on high quality infrastructure projects in Asia.”Group Chairman of Standard Chartered, José Viñals said:

“London’s involvement in the developing Belt and Road story, much like its role in the renminbi’s internationalisation a few years ago, shows again how important the City can be to this initiative.“London’s status as a world-leading financial centre and its strong legal and regulatory framework are key factors in getting vital financing transactions across the line.”The publication is the latest undertaking by the City Corporation to promote London’s involvement in the BRI, following the organisation’s support for a Belt and Road website alongside London & Partners.

The City of London Corporation has been active in China for many years, and has had representative offices in Beijing and Shanghai since 2008. There are more than 30 Chinese institutions in the City and more are in the process of opening a representative office.

ENDS

Notes to editors

The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk

For more information contact:

Nathan Rodgers, Media Officer for Asia

City of London Corporation

[email protected]

0207 332 3451 / 07864 625086

IHG accelerates Western China Growth

CBI member InterContinental Hotels Group (IHG®), one of the world’s leading hotel companies, has today announced the signing of ten new deals under seven of its brands in Western China.

The ten hotels will span several different tiered cities and well-known destinations in Sichuan, Chongqing, Shaanxi, Yunnan, Gansu, and Guizhou Province.

Building on the momentum of its existing and successful multi-brand hotel portfolio in the area, IHG will further strengthen its leadership and tap into the large potential of this fast-growing market. Boasting distinctive natural beauty and rich cultural heritage, the western area of China has been a worldwide attraction.

Enjoying great opportunities brought by policies like the Belt and Road Initiative, the cities’ economies continue to boom with the acceleration of urbanisation, as well as the upgrading of transportation and other supporting facilities.

According to world leading hotel and tourism consultancy, Horwath HTL, market expectations for the overall performance of the hotel sector in Western China have risen significantly in recent years.

Please read more here.