The new Silk Road aka BRI (Belt and Road Initiative) or OBOR (One Belt One Road) has been the burning topic ever since its announcement by the president of China Xi Jinping in 2013 in a speech to the Indonesian Parliament. The project aims at creating the fastest route between China and Europe spanning 68 countries, 65% of the world’s population, and 40% of the world’s total GDP. It will encompass land routes and maritime routes to enhance trade relationships through infrastructure investment.
With such a large project plan, the investment amount is estimated to reach more than $900 billion. China says it will ultimately lend as much as $8 trillion altogether from the participating countries (if needed).
The project has been in so many controversies ever since its announcement. The massive loans being doled out from the participating countries, especially smaller countries over and above their capacity has resulted in long term indebtedness. Now China seeks global help from private institutions seeing that the government has tightened its expenditure. The country’s USD 940 billion sovereign wealth investment fund wants global partners to invest as it is going to offer a mutual benefit to every participating country.
However, without the involvement of the private sector, the project seems to be losing its life as government alone isn’t enough to fund such a huge project.
And asserting this, several private companies have now taken their step forward to convert China’s biggest dream into reality.
But who all are they?
1COSCO (China Ocean Shipping Company)
COSCO is one of the biggest state-owned shipping and logistics service provider company headquartered in Beijing. It already has its one of the biggest investments in the Piraeus port in Greece. Despite the Piraeus Port Authority (PPA) making numerous attempts in convincing Greek government to unblock the 580-million-euro investment program, COSCO was successful in finalizing a deal to purchase a 51% share of the port in august of 2016 which is expected to increase to 67% over the next five years.
In addition to this, COSCO is going to be one of the biggest investors in funding China’s biggest infrastructural planning BRI.
China Merchants Port Holdings
China Merchant Port Holdings already has its consortium with the world’s largest player COSCO in which COSCO has bought 65% share of Turkey’s third-largest shipping container terminal for US$900 million. The acquisition will also give rise to further infrastructural development like building a new port at Bagamoyo in Tanzania which could then become Africa’s largest port.
With its investment in 29 ports worldwide, China Merchant Port Holdings continuously thrive for expansion and hence it has its next move towards the Belt and Road Initiative project where it claims to call the project as its driver of their expansion strategy.
CREC & CRCC
China Railway Group and China Railway Construction Corporation, both have been the top players in the infrastructural development of the Railways department. Ranking as the second and third at the global contractor list, both engage in a diverse set of construction across the world in building rail networks, bridges, stations, platforms, and much more.
China Railway Construction Corporation (CRCC) already has its 111 projects in process in 37 countries along the new silk road and they have also built several landmark projects in countries participating in China-proposed BRI. With such a huge potential and portfolio, the two are going to be the catalyst in the completion of the BRI project.
DP World
DP World is yet another company that is keen on the new silk road project. It has a somewhat interesting story. The DP World came into light after it constructed JAFZA (Jabel Ali Free Zone) which is a free zone facility that offers a host of attractive business benefits. Currently, JAFZA is home to 7100 companies. The new Silk Road projects aim at building one of the finest infrastructures across its network and economic corridor and hence, DP World is one such company that is going to help in achieving it.
DP World is one of the top-ranked port operators in the world and runs a network of 77 sea and inland terminals in 40 countries out of which many falls along the path of the silk road. The CEO of DP World also said that he is looking forward for expansion as it has ports along the silk road.
Dubai Chamber of Commerce and Industry has announced that it has signed a memorandum of understanding (MoU) with DP World UAE Region to collaborate on the Digital Silk Road, a Dubai 10X initiative which is expected to be launched by 2020.
DHL
DHL (Dalsey, Hillblom and Lynn) International GmbH, a German-based global market leader is all set to contribute to the achievement of Xi Jinping goal as the project is aimed to open unleashing advantages to various freight forwarders, traders, logistics service providers, port operator, container suppliers etc. The intermodal transportation routes of the new silk road spread across Europe which opens up the opportunity for courier companies like DHL as well.
Claiming that their grip over intermodal transportation services including land, water, and air, contributing in BRI would yield a mutual benefit as it would reduce the transportation cost.
HP
Hewlett Packard, an American company is one of the first bigger companies that used the COSCO-operated Piraeus port of Greece. They have also contributed handsomely to the New Silk Road’s transportation system. Being the high-tech manufacturers, they arbitrated the new rail route along the new Silk Road to connect with Chongquing, China, and to the farthest to Germany so that the company’s proceedings can reach to the farthest corners. They have come with the rail solution as they wanted to avoid any huge extra charges of transporting the merchandise and to avoid delays. The 9000 km expanse is covered in two weeks covering China and Germany.
General Electric
General Electric, headquartered in Boston, Massachusetts is one of the first international enterprises that made an entry into the Chinese market over a hundred years ago. They put forth that there is always a need for additional energy in such ventures and this opens the markets for the companies that provide energy. They took part in it with the target of achieving an increase in third-party sales to a wholesome amount of $10 billion from $1 billion per year.
Conclusion
There are still many more private big giants who are looking to invest in the project considering it as a big opportunity. China’s Belt and Road Initiative is in a motive to establish a new era of globalization and to rise above all the obstacles and diminishing funds. It will bring a golden age of commerce which will mutually benefit all. The project is estimated to complete by 2049 which coincides with the 100th anniversary of the People’s republic of China.