It’s no secret that trade flows between the east and west are shifting.
China’s ambitious Belt and Road Initiative (BRI), clearly illustrates this. BRI is seeking to rebuild China’s ancient silk routes for the twenty-fi rst century with an estimated $4 trillion of investment across 65 countries.
Even if the initiative only succeeds to a fraction of its bold ambitions its impact on global trade will be seismic.
Last year Barking in East London welcomed the first freight train from Eastern China. This symbolic arrival is why UK business needs to take note– BRI may well be one of the major shaping factors for post-Brexit Britain. In mere logistical terms, the ability to move goods from China to Europe by rail in around half the time that it takes via container ship will massively increase the volume and diversity of goods being traded via the BRI routes.
Of course, much of BRI’s focus is on trade in goods. Services are a slightly different beast. But with discussions of a ‘Digital BRI’ well underway, trade in services is likely to be a key pillar of the initiative. So how can the UK realise the opportunities offered by BRI?
BRI is one of the largest infrastructure projects that the world has ever seen. This will offer enormous opportunities for the facilitators of project delivery, from financial management experts to construction firms and the myriad of other support services required to deliver such an ambitious cross-continental initiative.
The UK is well placed to bring its knowledge of infrastructure financing, professional services and emerging market expertise to the table.
Then there are the investment streams flowing from China. Leveraging such investment to gain financing for secondary level projects at national or regional level is another benefit that BRI could offer.
Despite China putting a squeeze on its outbound FDI, Chinese investment into the UK more than doubled in one year – from $9.2 billion in 2016 to $20.8 billion in 2017. London’s Albert Dock redevelopment (attracting £1.7bn of Chinese investment) is an example of this.
Finally, there is the opportunity to open new global economic dialogues. As the world’s largest exporter of financial services, the UK can play in shaping the success of BRI as well as building new diplomatic relations with Asia as it continues to grow as an economic powerhouse.
BRI could well be the physical embodiment of a globalised world.
This is why it’s an initiative that should matter to the UK. For Britain to be global, it needs to think global and respond to a fast-changing world. BRI may just offer the opportunity for the UK to rise to such a challenge.