Asia-Pacific Report: China’s regional development strategy holds opportunities for Canadian companies
More than two years after China announced a massive regional economic development strategy that it dubbed “One Belt, One Road”, awareness of the plan remains low in the West, including in Canada, which means B.C. investors may be missing out on opportunities.
That is the conclusion of one Chinese scholar who spent much of last year in Vancouver as a visiting professor at UBC’s Institute of Asian Research.
In an interview from Beijing, Wang Yong, who is also the director of Beijing University’s Centre for International Political Economy, recalled his recent experience in engaging students and other academics in B.C. and throughout North America.
Wang said many people in the West view “One Belt, One Road” as a rival to the U.S.-led Trans-Pacific Partnership. But such an interpretation creates misconceptions about China’s goals.
“There’s certainly a competitive aspect to ‘One Belt, One Road’, but to overstate that aspect is to misjudge the intentions of the plan as a whole,” he said. “This was created to be a platform for global economic cooperation, led by China. It needs a long period of time to realize its full potential, and a lot of adjustments are still being made.”
“One Belt, One Road” was announced by Chinese President Xi Jinping in 2013 as a plan to revive the historic “Silk Road” connecting the entire Eurasian continent and Africa. Beijing hopes to invest in transportation and other infrastructure that will facilitate trade among the 65 countries along various routes, simultaneously using up China’s overproduction of steel and other construction material, as well as establish closer trade and diplomatic relations throughout the region.
Chinese officials have repeatedly noted that Canada can participate, especially as an investor or a partner in providing know-how in areas such as green technology and sustainability, but observers say Ottawa’s decision last year to not join the Asian Infrastructure Investment Bank (a Chinese-led development bank that is a component of “One Belt, One Road”) severely hampered Canadian businesses’ chances.
“You don’t actively participate; you don’t contribute. How do you expect your companies to be shortlisted when others are in the game?” said Hugh Stephens, a principal at consulting firm Trans-Pacific Connections and a distinguished fellow with the Asia Pacific Foundation.
“We have to be active, and, quite frankly, we’ve been on the outside track in not joining the Asian Infrastructure Investment Bank,” he said. “We don’t have an (free-trade agreement) with China, and with ‘One Belt, One Road’ potentially creating free-trade deals between Beijing and some of these countries along these routes, those agreements potentially give those countries preferential access (to China).”
There are concerns, however. Stephens noted that only a few actual projects have been completed under the “One Belt, One Road” banner, one being a rail line linking Kazakhstan to the western Chinese province of Xinjiang. Beijing’s plan, while well-funded, remains light on specifics, he said.
“In terms of the definition (of ‘One Belt, One Road’), nobody is really clear what it is,” Stephens said. “You have all these elaborate tabs drawn on the map, extending into Southeast Asia and Africa, across Mongolia and Central Asia, down through Myanmar and Pakistan. It’s obviously very ambitious. … I think we need to wait a little more to see exactly what it means.”
Wang said such views are not uncommon, but added he felt people in Vancouver may have more interest in the issue. He added that the potential for Canadian companies to be included in future projects in Southeast Asia or Central Asia remains, but steps need to be taken.
“‘One Belt, One Road’ is special because it’s a government initiative, so governmental support and engagement is crucial,” Wang said. “Without the Canadian government’s participation, proceeding would be more difficult. … China has traditionally viewed Canada has a reliable partner in the Western world, and Canadians are regarded in very high esteem within Chinese society. But not joining the Asian Infrastructure Investment Bank really effects Canadian companies’ business opportunities.”
He added that Ottawa should consider both Asian Infrastructure Investment Bank membership and a free-trade deal with China as priorities.
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