The New Silk road – OBOR – an overview (4)

This will be challenging, but what we see behind the alphabet’s soup of multinational stakeholders is a determination to follow a rules-based approach that can guarantee the rights of all, ensure best practice and lean, clean and green development.

If nations are responsible and keep their eye on the prize then it is there to be won. I am an optimist. I believe it will happen.

Still it is only natural that business in the UK and elsewhere will wonder, to put it somewhat crudely, “what’s in it for us”? Who will get the contracts? Who will manage and supervise them?

It would be foolish for us to deny that there is a concern that this seemingly grand vision of the new silk roads is simply designed to absorb China’s surplus capacity; to use its reserves by recycling them into projects that will simply represent contracts for Chinese companies, using Chinese surplus production and employing Chinese labour.

If this were indeed to be China’s hidden agenda, it would fail. Governments and businesses are not so stupid as to fail to see through any such scheme. In fact, China has had to repeatedly stress that it cannot assume the full responsibility for this project. Its vision is so grandiose that the burden would be too great. China’s position, rather, is that this project will only work if it becomes every one’s project. Everybody has to play their part and do their bit. It is an orchestral performance not a virtuoso solo. And this collective rationale and approach, moreover, is on an open and inclusive basis. There is no closed list of countries that can or cannot participate. It is open to the whole world.

Of course, the new silk roads will take full advantage of China’s skills, funds, excess capacity and everything else that it has to offer. China certainly needs this but so do the countries that will benefit. And who in many cases are eagerly, even insistently, requesting it. But that is very different from entering into this project simply to maximise those features. A grand vision cannot be reduced to or realised for such comparatively trivial reasons.

Rather this project will work precisely because it will be based upon the full participation of all national governments, their procurement agencies, and on global competition based on market principles, governed by the rule of law and subject to transparent tendering, oversight, regulation and arbitration.

Perhaps over the next ten years or so, there will be an annual outlay of some $1 trillion to lay the foundations of this global transformation. Then, as the momentum increases, over 30 years or so, the spend may rise to some $40-50 trillion.

Simply put, there will be no greater contribution to world GDP growth and to development in this historical period.

How much can we in the West expect to take of this in terms of contracts awarded, exports and so on? Somewhere between 15-20% is my guess, although it will be greater in the more sophisticated added value of the latter stages of adding refined finishes to urbanisation and the various advanced and high tech products and services that characterise its lifestyle. As you journey through China, you can see that the world’s latest technologies and products still tend to be mainly Western or Japanese. China’s extensive purchase and usage of high-end Western and Japanese technologies and products will be replicated along the countries of the belt and road. 

We shall also play a significant part in legal, accounting, financial, regulatory and other professional services as well as in funding and listings.

This is a One Belt One Road for all. The ultimate win win.

I believe that it will change the world forever and leave behind empires and hegemony in favour of a community of common destiny, where the development of one nation is the precondition for the development of all nations. Back to the future. Ecumene shall return.

Thank you for listening to me.

(The article is ausorised to People's Daily Online by Stephen Perry, who gave this speech on China Development Forum at the L.S.E. 30 January 2016.)