1.6d Belt and Road (Expert Sharing by Mr Denis Depoux, Senior Partner of Roland Berger)

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Del curso dictado por The Chinese University of Hong Kong

China Strategy

19 calificaciones

The Chinese University of Hong Kong

China Strategy

19 calificaciones

Curso 2 de 4 en SpecializationDoing Business in China

This course is designed to help you, as a strategist of a foreign company, better understand how to develop your China strategy. Specifically, after studying China’s changing strategic landscape, you will focus on mastering three strategic issues: who – the major players in China, how – the entry modes, and where – the location strategy for your China business. This course is aimed to deliver updated knowledge and real experiences of developing China strategy.

De la lección

What’s New? China’s New General Environment

Evidence has shown that the contextual difference or gap between a foreign firm's home country and China is a key reason for business failure in China. This Section helps in developing a better understanding of China's context in terms of its general environmental segments, and a number of strategies to deal with new and updated contextual issues in China. How much does context matter in doing business in China? How do foreign firms deal with new and updated contextual issues in China?

1.6a Key Issue: Belt & Road1:17

1.6b Belt and Road (Expert Sharing by Dr Edward Tse, Founder & CEO of Gao Feng Advisory Company)1:26

1.6c Belt and Road (Expert Sharing by Mr Gordon Lam, Vice-Chairman and Chief Executive of Hang Seng Bank (China) Limited)3:22

1.6d Belt and Road (Expert Sharing by Mr Denis Depoux, Senior Partner of Roland Berger)6:03

Conoce a los instructores

Prof. Xufei Ma
Associate Professor, Director, Center for Entrepreneurship
Department of Management

So One Belt, One Road is one of numerous government policies

associated with the 12th, or now the 13th, five year plan.

One important thing to understand is that in China,

a lot is related to government policies.

Is it directly in this case of the One Belt, One Road policy?

Or indirectly?

So it's always very important for foreign companies, for

foreign entrepreneurs to realize how they can associate their business.

How they can pool on resources associated with this government policy.

So, One Belt, One Road, this is the Maritime Silk Road, so-called.

So investments associated with linking China,

and let's say Europe, through Southeast Asia,

Middle East and Africa for the Maritime Silk Road.

And through Central Asia for the land Silk Road.

It's therefore very important for European companies,

because the Silk Road is from China, and on the other side, there is Europe.

So everything in between is concerned, but it's also very important for

the destination countries, ie.Europe.

A big chunk of it is infrastructure investments,

infrastructure like ports, like shipping, like energy, etc.

So it's a lot of money, it's a primary objective of the initiative,

it's also meant obviously to find outlet for

large infrastructure companies in China.

With huge investments that has been, let's say, labeled One Belt, One Road.

We're talking between 4 and 8 trillion US dollars.

And just to give an idea of the magnitude, in the first four months of 2016,

let's say in the first quarter of 2016,

Chinese contractors signed close to 1,500 EPC contracts,

with a value of more than $30 billion.

This is Chinese statistics.

Chinese government statistics related to the One Belt, One Road policy.

So, huge opportunity.

Now, is it available to foreign companies, and is it meaningful?

Yes, because part of the infrastructure investment also has

to be state of the art technology.

Let's say in the field of energy.

So we're talking turbines for a hydro power plants, for thermal power plants.

We're talking also nuclear investment.

Of course, with a lot of Chinese technology, and

an increasing share of Chinese technologies, this is the objective.

But as a matter of fact, as a starting point, there is also most likely

a significant share of, I was about to say European.

So international, and hopefully some European technology underline.

The idea is that Chinese companies,

primarily state run enterprises, would cooperate with foreign enterprises,

in order to work in third party countries

anywhere along the silk road.

Couple of examples, French energy giant.

Very strong in hydro power turbines.

Providing turbines for

the Three Gorges Dam in the past, with a factory located in China.

Now using this factory to produce turbines for

third party countries as part of the One Belt, One Road initiative.

The same thing with Caterpillar, a very famous US company.

So it's across a variety of fields.

One important aspect of the One Belt, One Road policy for

foreign companies, it's a government driven initiative.

It's a policy driven initiative.

Which means that there is a high level agreement between the Chinese government,

and it's representatives, and the governments of the countries

part of the One Belt, One Road initiative.

Which, even if it's not officially said like this,

it is certainly bringing some business protection, and

political protection to any kind of contractual agreement, any kind of deals

that can be concluded as part of this policy.

So my advice to foreign enterprises in that field,

is also to accept that in this case, Chinese companies are in the lead.

Because they're bringing the opportunity,

and they also could bring some significant financing.

By the way, this is nothing new.

If you look at the history of energy financing in the last 20 or

so years, of a number of other countries have

actually implemented similar policies, probably at a smaller scale.

Japan, Korea, just to name two, that have

simply have their own industrials to go after international markets.

In partnership with American or European companies.

And bringing financing in exchange

of having their own industrials provide some equipment.

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