The Belt and Road Initiative couldnbe seen as China’s Blue Ocean Strategy for international cooperation, according to an expert.
Speaking during the Global Entrepreneurship Community Summit on Dec 13 in Kuala Lumpur, Koh King Kee, director of the China Belt and Road Desk at accountancy and advisory firm Baker Tilly Malaysia, said the China-led trade and infrastructure initiative is the country’s adoption of the Blue Ocean Strategy.
“It creates new markets and focuses on the big picture of development to promote win-win cooperation,” Koh told China Daily Asia Weekly.
Blue Ocean Strategy is a marketing theory from a 2005 book by W Chan Kim and Renee Mauborgne of the INSEAD business school, which
describes how successful businesses capture uncontested market space in “blue oceans” and render competition irrelevant.
“The Belt and Road Initiative is an economic cooperation platform, it is not an agreement or a trading bloc,” said Koh. “It is based in but not limited to countries along the Belt and Road. Everyone can be part of it.”
He said the initiative’s infrastructure programs, though mostly undertaken by Chinese State-owned enterprises, allow local and international players to participate as suppliers or service providers.
One example is a major Belt and Road infrastructure project in Malaysia, the 688-km East Coast Rail Link (ECRL). The project is expectedto benefit local contractors and engineering consulting firms through subcontracts totaling 16.5 billion ringgit ($4.1 billion), according to
Xinhua. “China prefers partner countries to partially fund their own infrastructure projects,” said Koh, referring to ECRL. “Malaysia financed 15 percent of the project cost through sukuk (Islamic bonds), which open opportunities for financial institutions and related services.” Koh said Baker Tilly is the only firm of its kind in Malaysia to establish a Belt and Road desk as it focuses on the long-term impact to be generated by the initiative.
The company is working closely with Baker Tilly China to help companies from both countries discover business opportunities through the
Belt and Road. Currently, the company is in talks with the Shanghai Stock Exchange to promote Belt and Road-related panda bonds, or yuan-denominated bonds from non-Chinese issuers, in Malaysia to encourage qualified corporations to raise funds in China.
In addition, Koh said there will be more opportunities from the technology industry as China is at the forefront of the Fourth Industrial Revolution. As Chinese companies are eager to go global, he expects more tech firms to expand their business and bring their experience along the Belt and Road, especially in countries like Malaysia that face a shortage of labor.
He said many people tend to misunderstand the initiative as something geopolitical. “China promotes the Belt and Road Initiative not
because it thinks the geopolitics come first,” said Koh. “It is more of a consequence, or a side benefit. Chinadoes not want to disrupt the existing financial or economic world. “The Belt and Road project brings benefits to everyone, and we should look at it with an open and inclusive mind.”