Original source from China People’s Daily.  View source in Chinese:  https://bit.ly/2tpLcPV

 

19 Jun 2018 —

果园港码头

Chongqing Guoyuan Port plays an important role in the multimodal transport system. The picture shows a ship unloading at the Port

In September 2017, Chongqing Connectivity Initiative’s Southern Corridor bound multi-modal transportation of rail and sea ways starting its journey from the Chongqing Railway Port

In September 2017, Chongqing Connectivity Initiative’s Southern Transport Corridor bound multi-modal transportation of rail and sea ways starting its journey from the Chongqing Railway Port

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Photo courtesy of Chongqing Gongyun ASEAN International Logistics Co., Ltd.

The first shuttle truck from Chongqing to the ASEAN roads took off from Chongqing ASEAN International Logistics Park on 28 April, 2016, the 10 standard container trucks loaded with export goods passed through Pingxiang, Guangxi, and finally arrived in Hanoi, Vietnam. The journey took about 40 hours, which was 15 days shorter than sea transport.

The trade channel is changing – starting from Singapore, via the Southern Transport Corridor, the container rail and sea transportation arrive in Chongqing in 10 days, which saves 15 days compared to the Jianghai-Channel intermodal route;

The logistics efficiency is changing – the multimodal intelligent system can find cargo information in 5 minutes, realize rapid container collection, and solve the problems of pallet configuration that has plagued the enterprise for many years;

The service industry is changing – the goods, technologies and resources are coming together. New business opportunities have given birth to a number of foreign trade services such as multimodal transport, cross-border big data platforms, and joint venture business collaborations.

Business exchanges are growing – Chongqing and Singapore’s round-trip passenger flow has increased from 45,000 in the past to 190,000 last year, there are more and more business travellers.  Flights have increased from 5 to 14 per week;

……

The changes originated from the third government-to government project between China and Singapore.

On November 7, 2015, the third inter-governmental cooperation project, the China-Singapore (Chongqing) Strategic Interconnection Demonstration Project (hereinafter referred to as ” Chongqing Connectivity Initiative (CCI)”), “settled in” Chongqing. Over the past two years, with the theme of “modern interconnection and modern service economy”, 116 key projects with a total value of approximately US$20.8 billion have taken root in Chongqing in the four major areas of financial services, aviation industry, transportation and logistics, and information and communications. “.

Southern Transport Corridor Connects International Shipping Network

On April 19th, a 40-foot container full of mold raw materials set off from Singapore. Ten days later, Yi Shen Die Technology (Chongqing) Co., Ltd. successfully received the goods.

This speed of delivery makes the company’s inventory manager Tan Yu happy.  Prior to this, importing goods from Singapore through Jianghai, first arrived in Shanghai and then entered Chongqing, which took nearly a month. “Today, the goods are sent from Singapore, first to Guangxi’s Qinzhou Port and then to “Chongqing New” Railway Sea Intermodal Class to Chongqing. The entire process takes only 10 days.”

This new line is the southbound channel of the Chongqing Connectivity Initiative (hereinafter referred to as the “Southern Transport Corridor”).

As the operation center, Chongqing has a unique geographical advantage. To the west, the Chongqing-Europe railway (YuXinOu) reaches China’s northwest, Central Asia, and Europe; towards east, it connects Shanghai to the sea via the “Golden Waterway” of the Yangtze River. To the south, more than 250 routes converge at the Singapore Port on the southeast side of the Strait of Malacca.

Through the construction of the Southern Transport Corridor, complimented by the Silk Road Economic Belt and the 21st Century Maritime Silk Road.  All three logistics infrastructure completed a perfect trade network.

In September 2017, the Changgui New Tiehai Intermodal trains are fixed as routines and marked the official operation of the Southern Transport Corridor: starting from Chongqing to Qinzhou Port in Guangxi, and connecting sea to reach the ASEAN ports, and then connecting to the international shipping network. network.

At the same time, Chongqing’s cross-border road transport and international rail transport to the Indochina peninsula are also being realized.

Cross-border highway shuttle bus line: It departs from Nanpen Chongqing and exits through border ports in Guangxi and Yunnan, leading to countries such as Vietnam, Laos, Thailand, and Myanmar.

International railway transport links: From the southwestern railway network, through Pingxiang, Hekou, Mohan, Ruili and other border ports, and the Pan-Asian railway network convergence, connecting the Indochina Peninsula.

Three lines, vertical and horizontal miles, complement each other.  Southward, the “secondary governor” of foreign trade in the western region of China was opened up; to the north, the economic and trade exchanges between Singapore and other ASEAN countries leading to western China, Central Asia, and Europe were invigorated. “This will connect most of China’s entire territory with Southeast Asia, Eurasia, and Africa, greatly increasing the speed of cargo transportation,” said Zheng Yongnian, director of the East Asian Institute of the National University of Singapore.

On April 20th, a batch of LCD screens from Vietnam took only 10 hours to reach Qinzhou Port from Vietnam, then onto Chongqing via the Southern Transport Corridor.  The LCDs went on the same day’s Chongqing-Europe railway (YuXinOu) to Poland.

“It takes only 90 minutes to complete the sea-railway transport up to customs declaration in Qinzhou Port. It takes only 70 minutes to complete the railway transit declaration at the Chongqing Railway Port, and it is very fast and efficient!” said Wang Yupei, Chairman of China-Singapore Southern Transport Corridor.   Southern Transport Corridor and Chongqing-Europe railway (YuXinOu) together have achieved seamless convergence.

Currently, the internal and external ports of the Southern Transport Corridor rail and sea transports covered 82 ports in 45 countries and regions including East Asia, Southeast Asia, Africa, the Americas, and the Middle East.

Chan Chun Sing, Minister of Trade and Industry of Singapore, interprets the goal of the Southern Transport Corridor as ‘one channel that connects China and Singapore, one rail and sea intermodal network that reaches every part of the world’.

”Innovation” –

The Chongqing Connectivity Initiative project connects China and Singapore’s strategic channels.  Unlike China-Singapore cooperation in the construction of Suzhou Industrial Park and Tianjin Eco-City, this project has no land development and park planning, and it has no physical scenes.

Han Baochang, director of the Chongqing Connectivity Initiative Management Bureau, stated that there is no precedent when carrying out this project, there are only trials and errors.

In Zheng Yongnian’s view, when there is no physical entity, the Chongqing Connectivity Initiative project will face greater challenges than the previous two Sino-Singapore cooperation projects, and it will have more important innovation significance.

To achieve a “from 0 to 1” leap, we must grasp the “golden key” of innovation. The relevant national ministries and commissions gave support to the project’s 57 innovation initiatives.  In 2017, Chongqing also proposed some new innovation measures.

Innovation begins with the working mechanism. The Joint Implementation Committee “discovered problems”, the Joint Working committee “researched issues”, and the Joint Coordination Council “solved problems.” “The three-tiered working mechanism, ‘from the bottom to the top’, opens up the blockage and promotes problem solving. This is the most attractive facet for the Chongqing Connectivity Initiative,” said Han Baochang.

Step by step, the purpose of Chongqing Connectivity Initiative is increasingly becoming more meaningful.

In March this year, Sasseur REIT was listed on the Singapore Exchange.  As the Western regions first real estate investment trust listed in the Singapore Exchange, this is of great significance for the exploration of the new cross-border financing model for enterprises in the central and western regions.

There are many more “firsts” created under the umbrella of Chongqing Connectivity Initiative: In December 2016, Loncin Holdings issued 0.8 billion yuan of overseas bonds on the Singapore Exchange, the first private corporate bond in western China. It pioneered the launch of innovative financial services such as bill-bill financing, “export double-pace” trade financing, cross-border asset transfer, and inland river carrier liability insurance.

Today, both China and Singapore sides have established diversified cross-border investment and financing channels, cumulatively completed 60 types of cross-border credit financing projects with financing amount of US$5.06 billion, and reduce financing costs by 1.15 percentage points. The cross-border financing for the provinces of Sichuan, Qinghai, Shaanxi and other provinces amounted to 2.23 billion U.S. dollars, and the successful implementation of the China-Singapore cross-border financing model radiated to neighbouring provinces.

Through cooperation with Singapore companies, Chongqing companies are also advancing in innovation. A few years ago, Ding Yan’s Chongqing Pucheng Logistics Co., Ltd. had to implement rapid consolidation through manual inquiries and telephone calls. The Singapore Huilian Group’s multimodal intelligent system requires only the input of container, departure port, and destination information, and cargo information can be found within 5 minutes. Seeing this, Ding Yan immediately agreed to the requirement of “51% stake in the company.” Last May, the two companies jointly set up a new company – Chongqing Huilian Pucheng International Logistics Co., Ltd.

Ding Yan benefited from the sophisticated management brought by innovation: from the numerous departments and the complex management level, to the development of individual assessment and profit indicators according to the branch company model; from focusing on the cost of employing personnel to the use of a comprehensive compensation system.  “The staff has increased by 1/3, but the efficiency has more than doubled.” Ding Yan said: “Even the design of the warehouse has been optimized and innovative, and the warehouse has become a double storey. The increase in cost per square meter is less than 1,000 yuan, but the area of usage has increased by twofold.”

Many small and medium-sized enterprises are not able to form a full case of transportation due to the small volume of goods. The Chongqing Connectivity Initiative has brought business opportunities for Chinese and Singaporean companies collaborations.  Fuxin Europe (Chongqing) Supply Chain Management Co., Ltd. and Singapore Huantong Logistics Group jointly established Zhongxin Huantong (Chongqing) Multimodal Transport Co., Ltd. in February last year to provide public LCL services.  Mixed pallet price is similar in shipping, but it also saves time,” said Wang Huoquan, deputy general manager of the company.

“Sharing” –

Expanding channels of “friends circle”

Chongqing Liangjiang Digital Economy Industrial Park, an office building with coffee and musk – this is the Chongqing Coffee Exchange Center.  Sun Zheng, Deputy General Manager of the center, said that before, coffee beans imported from Vietnam were shipped to Chongqing via JiangHai intermodal transport route, processed into coffee powder and sent back to Vietnam. After the launch of the Southern Transport Corridor, the time efficiencies for transportation has greatly increased, and foreign companies have set up factories in Chongqing.

As the largest coffee spot trading place in China, Chongqing Coffee Exchange Center will also sell coffee from Yunnan and Southeast Asia to Europe to form an agglomeration of the global coffee industry.

Not just for coffee commodity, after the Southern Transport Corridor and the Chongqing European Railway (Chongqing YuXinOu Railway) are seamlessly connected, the canned tuna in the Philippines, Vietnamese clothing, etc. will no longer need to be transferred from Iran. After customs declaration at the Chongqing Railway Bonded Logistics Center, the goods can board on the Chongqing European Railway the same day, depart China from Xinjiang and arrived in Germany in less than 20 days.  Onions, apples, summer vegetables, and Chinese herbal medicines in northwestern China have also begun to become “demanding goods” in Southeast Asian countries.

“The higher the amount of freight traffic aggregated on the channel, the more participants there are and the greater the economies of scale, which can reduce costs, benefit all parties including enterprises, benefit the business environment in western China, and promote investment.” Chan Chun Sing said.

As the Southern Transport Corridor continues to expand through multiplying effects, the economic values for it’s surrounding areas are enhanced.  As an operation center, Chongqing will cooperate with Guangxi, Guizhou, Gansu, and Qinghai to conduct regional cooperation and jointly discuss the establishment and sharing of the Southern Transport Corridor.  In April of this year, the Southern Transport Corridor Chinese joint meeting has invited Inner Mongolia, Sichuan, Yunnan, Shaanxi, Qinghai and Xinjiang provinces to participate.

The channel is not a simple “aisle”.  It needs continuous improvements in services. China-Singapore Smart City has launched pilot projects in five districts and counties, and cooperation in smart transportation, smart animal husbandry and smart buildings is underway. Three unattended supermarkets will be launched in Singapore during the year; the data service platform went online in April this year. The platform gathered information on corporate data from the two countries and promoted the transnational development of enterprises. The Zimwork Sino-Bilingual Talent Service Trading Platform has been officially launched as joint venture between Chongqing Zhūbājiè Network and Singapore Press Holdings Group.

Interconnection, creating new opportunities for opening up inland

Since the beginning of this year, WiseNet Asia (Chongqing) Co., Ltd. has added 10 Singaporean corporate customers who are preparing to invest in Chongqing.  Karen Wong, GM of WiseNet Asia (Chongqing), plans to recruit more talents from the neighboring provinces.  According to Karen, “Southern Transport Corridor connects Singapore with the mainland of China. Our business is getting busier.”

 

About WiseNet Asia (Chongqing) /重庆中新巍海商务咨询有限公司

Wisenet Asia (Chongqing)/重庆中新巍海商务咨询有限公司 is a wholly owned subsidiary of Wisenet Asia (S) Pte Ltd.  It is the first overseas high-end headhunter company in Chongqing’s Human Resources Industrial Park, dedicated to implementing the Chongqing Municipality’s HongYan (talent) scheme, and helping Chongqing organizations in their talent needs.  The company was also selected as one of the Talent Acquisition Service Provider for Chongqing Municipality from 2018-2019 under the HongYan (talent) policy.

Follow WisenetAsia in China through WeChat:

19 Mar 2018 –  A notable mention of WiseNet Asia by Minister in the Prime Minister’s Office Chan Chun Sing in Parliament on Monday (Mar 19), on the progress of the Chongqing Connectivity Initiative. This was in response to questions from MP Sun Xueling.

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Minister Chan Chun Sing, Minister in Prime Minister’s Office and the Secretary-General of the National Trades Union Congress (NTUC)

View Minister Chan Chun Sing’s speech transcript in Parliament:  (No 6) – https://www.mti.gov.sg/Newsroom/Parliamentary-Replies/2018/03/MinisterPMO-Chan-Chun-Sings-oral-reply-on-the-Chongqing-Connectivity-Innitiative-Project

Since its launch in Nov 2015, the China-Singapore (Chongqing) Demonstrative Initiative on Strategic Connectivity (CCI) has made good progress  in catalysing the economic development of Western China and Southeast Asia by enhancing connectivity in the areas of financial services, aviation, transport & logistics, and information and communications technology (ICT).

The key milestones to date are as follow:

  • Cross-border financing deals totalling RMB 25.3 billion (around SGD 5.2 billion) have been completed to date
  • Aviation connectivity from 5 flights to 14 flights per week
  • The CCI-Southern Transport Corridor (CCI-STC) project enhancing multi-modal connectivity between Western China, Southeast Asia and to the rest of the world. The CCI-STC has been referred to by China’s President Xi Jinping as the international land and sea corridor that connects the overland Silk Road Economic Belt with the 21st Century Maritime Silk Road
  • CCI is about enhancing connectivity in both sides.  As cross-border trade activities increase, demand for related services like finance, legal and other professional services will also increase. These in turn, create more opportunities for our businesses and our people. For instance, WiseNet Asia has also entered Chongqing to provide HR recruitment services.

–End–

 

 

 

Source: Belt and Road Portal | Updated Jan 5, 2018

 

Written by TY Chin | Updated Feb 28, 2018

Copyright © 2017 WiseNet Asia Pte Ltd.  All Rights Reserved

Bridging China

 

Belt and Road Initiative, setting South East Asia region as central Global Value Chain of the future

In 2016, China companies invested US$14.53 billion in countries along the “Belt and Road”; where the contract value for projects along the routes amounted to US$126.03 billion, with a turnover of US$75.97 billion (Source: Ministry of Commerce, China). A large part of the investment is in South East Asia countries that includes Singapore, Indonesia, Thailand and Malaysia. From 2013 to 2016, the Belt and Road Initiative has created more than 180,000 local jobs, and paid $1.1 billion in tax to local governments.

The Belt and Road Initiative (BRI) is China’s globalization project introduced by President Xi in 2013. It encompasses more than 60 countries, 4.4 billion people and up to 40% of the global GDP. The routes consist of the “21st Century Maritime Silk Road” and the “Silk Road Economic Belt”. The Belt is a land route from China’s western region through Central Asia, extending up to North of Europe. The Road consists of shipping lanes from Western Asia, through South East Asia, Africa and Europe.

The plan opens up new market opportunities for companies along the routes, but also comes with complicated risks and challenges.

Economic Belt Map

(Image Source: Maps of world 2017)

Belt and Road benefits China and the countries along the route through shared economic growth. According to the Asian Development Bank, Asia needs to invest $26 trillion by 2030 to maintain its growth momentum. Aside from Singapore, most of South East Asia countries are hampered by infrastructure deficits. China’s investments in infrastructure connectivity will fill in the gaps in economic expectations, and also the possibility of developing the South East Asia region into the centre of a future global value chain.

Asia Infrastructure Development

(Image Source:Asian Development Bank)

 

Chongqing, the Place for the Belt & Road Project

Chongqing is a key location in the Belt and Road Initiative, where much of the Belt and Road actions are happening through its land, air, water transportation hubs, logistics city and free trade zone. Chongqing is situated on the upper reaches of the Yangtze River in western China, linking China to Europe through a network of roads and rails across Central Asia. It is also connected to Southeast Asia through a highway that connects to the port city of Qinzhou in southern Guangxi. The Chongqing-Xinjiang-Europe (Yuxinou International Railway) is a 10,000-km-plus rail route stretching from Chongqing to Duisburg, Germany. As at end of 2015, the railway has handled over US $10 billion worth of freight both ways.

Map of Trans-Eurasia Railroad & Schengen Area

(Image Source: USA China Daily)

The Chongqing free trade zone connects the new Silk Road to the Yangtze River. Approved in April 2017, it aims to accelerate development in the western region and also to promote Belt and Road activities.

Chongqing is also the base of China-Singapore (Chongqing) Demonstration Initiatives on Strategic Connectivity, in short, Chongqing Connectivity Initiative (CCI). Launched in 2015, this is the third government-to-government project between Singapore and China, and a linchpin of the Belt and Road Initiative. Four areas of collaboration between the two countries are financial services, aviation, transport & logistics, and information & communications technology.

Under the CCI initiative, a total of US$3.22 billion financing deals have been signed as at the end of 2016, leading to savings of RMB 152 million for Chongqing businesses. Through Chongqing, Southeast Asian companies can expand into Western China; likewise through Singapore, Chinese companies can venture into ASEAN (Source: Ministry of National Development, Singapore)

Chongqing is positioned to be a major port for inland logistics that connect to international routes.  Under the CCI Transport and Logistics Master plan, the Chongqing Logistics Development Platform (CLDP) and the Multimodal Distribution and Connectivity Centre (DC) are rolled out in Feb 2017. The CLDP is set up to do logistics planning and develop standards for the transport and logistics industry. The DC is a logistics hub that caters to different transport modes, such as river, rail, air and road.

The Challenges

Alongside the encouraging developments thus far, there are also gaps to market entry and business growth in the form of various risks and challenges. The gaps must be addressed as failure will have a multiplying effect on the business entities and the bank that financed the project.

Economic and Political Risks
Countries along the Belt and Road are vastly diverse with various ethnics, cultures and languages. Many countries have their own risk profile. On the macroeconomic level, political controversies in some South East Asia countries have undermined investors’ confidence, prompting prolonged exchange-rate volatility. Other risk factors include volatile energy prices, natural catastrophes with flood and drought, and security with the threat of terrorism and violent demonstrations.

In foreign trade, China has implemented capital control measures earlier in 2017; however, the control is not applicable for China companies participating in the Belt and Road initiative. The projects in Belt and Road are approved by various government agencies and state enterprises. Hence, within the government offices, there should be people who are experienced with due diligence and risk assessments in international projects. The implementation of control measures starts from top down. Approval of the wrong projects could cause taxpayers money for the mistakes.

Singapore, being a global trade and financial centre, is the most stable in the region, yet it faces the problem of low birth rate whereby fertility ranks last among 224 nations in a study by the U.S. Central Intelligence Agency. This poses the risks of impending economic growth and tax revenues.

Labour Risks
Malaysia economy’s manpower needs over the past decade has been largely supported by foreign labour taking up jobs that the locals will not do. Foreign labours are consistently at a shortage. However, the government has implemented measures to reduce reliance on them, resulting in higher operational costs for companies who have to import skilled labours.

Risks face by China companies investing abroad
More than $250 billion in China’s overseas investments failed between 2005 and 2015, according to the China Global Investment Tracker.

A research report by the Centre for China and Globalization points out that for China companies expanding in the belt and road routes, their main concern is political risk whereby two thirds of the sixty over countries have debts burden classifying them below investment grades.

Other challenges encountered by Chinese enterprises investing overseas include low participation in existing international standard establishments, lack of professional managers with international experiences, miscommunication between Chinese enterprises and international Non-governmental organizations, misunderstanding of foreign trade unions, difficulties in promoting Chinese brands internationally, and low ability in facing legal and political risks.

Detrimental effects of poor investments
Poor infrastructure investments that end up as white elephant or abandoned projects cost more over the long term, incurring interest payment and underutilization cost. The risks commonly associated with megaprojects are overrun in timeline and budget. Bent Flyvbjerg, the most cited scholar in the world in megaproject management at Oxford’s business school, estimated that nine out of ten megaprojects go over budget. The cost overruns anything between 50% and 1900%. One example of failed megaproject is the 2004 Olympic Games in Athens, which became a contributing factor to Greece debt default in 2011. In such instances, governments with tax payers’ money will have to pay for the failed projects.

International Arbitration in ASEAN
With the risks associated with going global, disputes between business partners are also inevitable. Arbitration is one way to resolve high value cross border disputes. The Hong Kong International Arbitration Centre (HKIAC) and the Singapore International Arbitration Centre (SIAC) are the two most popular jurisdictions by numbers of cases handled. Other centres include The China International and Economic Trade Arbitration Commission and The Kuala Lumpur Regional Centre for Arbitration (KLRCA).

According to the International Chamber of Commerce (ICC) 2015 Report, Singapore has been the number one seat of ICC arbitration in Asia for five years running, as well as being  the fourth most preferred seat globally.  The other two dispute resolution institutions in Singapore are the Singapore International Mediation Centre (SIMC) and the Singapore International Commercial Court (SICC).

In Jan 2018, China announced the formation of three arbitration courts dedicated to settling Belt and Road disputes.  The headquarter is located in Beijing, the court in Xian would settle commercial disputes in the land routes (Belt), and the court in Shenzhen would focus on disputes in the sea routes (Road).  According to Xinhua News, the new institutions will be based on Beijing’s existing judiciary, arbitration and mediation agencies.

Despite the growing popularity, arbitration has its challenges and disadvantages. According to Matthew Gearing of Allen & Over:
– there is a propensity for court intervention in certain Asian jurisdictions;
– courts in certain jurisdictions have refused to enforce arbitral awards on grounds which go beyond the terms of the New York Convention; and
– the pool of suitably experienced arbitrators based in the region is comparatively small compared to Europe.

Navigating through the gaps of doing business in Belt and Road

The challenges are real, so are the vast market opportunities. Even though it is impossible to completely work out all the major risks with their subsets of secondary risks, it is still viable to navigate through the right framework and strategy in both government and private sectors, driven by one common agenda.

People
As a safety measure, a third party business and HR advisory with links in China and trading countries helps to shorten the learning curve. They can assemble a team together, cut through the noise on cultural gaps and cushion on tensions when it arises. An advisory body works out the teething problems in the starting phase and is part of the implementation team. Aside from facilitating cross border collaboration, their role is to minimize costs from mistakes.

Once the link is established, there needs to be human capital that can deliver long term business objectives and also contribute to social and economic growth of the area. Mega projects could take up to 10, 20 or even 30 years to build; therefore there needs to be a committed team with long term vision. Also, the steering team needs to work hand in hand with local authorities to drive social benefits for the area. This includes control of air pollution and waste management.

Best Practices
On the state level, state administrative bodies need to establish one set of common quality standards and best practices in each sector of cooperation, and monitored by a joint management body. An example of this is the Chongqing Logistics Development Platform set up to develop standards and best practices for the transport and logistics industry.

Collaborative risk management between government and private enterprises; rather than a one sided approach is more efficient as each side has their own authority and expertise that can be utilized when faced with different type of challenges.

Final Thoughts

The Belt and Road projects may mean different things to different companies; but undoubtedly, it is an economic growth engine that will develop emerging markets in Asia as centre of global value chain in the near future. As companies’ growth hit a bottleneck; there are always opportunities outside their existing market. Navigating the gaps of growth might seem challenging, but when done with the right timing, speed, agility and high standards, the rewards are priceless.

 

Sources:
Ministry Of Commerce,PRC. (2017). MOFCOM Department Official of Outward Investment and Economic Cooperation Comments on China’s Outward Investment and Cooperation in 2016 -.

James Griffiths, C. (2017). Just what is this One Belt, One Road thing anyway?. [online] CNN. Available at: http://edition.cnn.com/2017/05/11/asia/china-one-belt-one-road-explainer/index.html

App.mnd.gov.sg. (2017). Minister Lawrence Wong’s Interview with Xinhuanet Prior to Attending Belt and Road Forum for International Cooperation on 13 May 2017.

Burgess, M. and Foley, M. (2017). Belt and Road Investors See Opportunity in China Capital Limits. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-07-03/belt-and-road-investors-see-opportunity-in-china-capital-limits

O’Callaghan, J. (2017). Tiny Singapore risks economic gloom without big baby boom. [online] Reuters. Available at: http://www.reuters.com/article/uk-singapore-babies-idUSLNE87U00H20120831

Lynn, J. and Marcelo, C. (2017). IBA – Borderless Asia: international arbitration and its role in ASEAN integration – Asia Pacific Regional Forum, December 2015. [online] Ibanet.org. Available at: https://www.ibanet.org/Article/Detail.aspx?ArticleUid=f6ea87dd-b39d-4021-9cb6-e1abdeca3e17

The Economist Intelligence Unit. (2017). Prospects and challenges on China’s ‘one belt, one road’: a risk assessment report

Shi, T. (2017). Chinese Firms Wary of Political Risks on Xi’s Belt and Road. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-05-22/chinese-companies-wary-of-political-risks-on-xi-s-belt-and-road

Blue Book of Chinese Enterprise Globalization. (2017). Beijing: Center for China and Globalization, pp.3-6.

Flyvbjerg, Bent, What You Should Know About Megaprojects and Why: An Overview (April 7, 2014). Project Management Journal, April/May 2014.

ICC – International Chamber of Commerce. (2018). ICC report confirms Singapore as a leading Asia arbitration hub – ICC – International Chamber of Commerce. [online] Available at: https://iccwbo.org/media-wall/news-speeches/icc-report-confirms-singapore-as-a-leading-asia-arbitration-hub/

Chandran, N. (2018). China plans to create new international courts, and that has a lot of people worried. [online] CNBC. Available at: https://www.cnbc.com/2018/02/01/china-to-create-international-courts-for-belt-and-road-disputes.html

Nortonrosefulbright.com. (2018). Launch of the Singapore International Commercial Court. [online] Available at: http://www.nortonrosefulbright.com/knowledge/publications/127746/launch-of-the-singapore-international-commercial-court

Disclaimer: The opinions in this article are those of the authors and do not represent Wisenet Asia Pte Ltd.

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WiseNet Asia (Chongqing) Co Ltd was invited by Chongqing Provincial Human Resources and Social Security Department to attend a feedback session on 8 November 2017 to discuss on talent attraction policies & issues for Chongqing.  Attending the meeting were policy makers from the Human Resources and Social Security Department, major universities in Chongqing, state owned companies from Chongqing, local private enterprises and key human resources companies, including WiseNet Asia.

The agenda of the meeting was to discuss on ideas to attract talents to Chongqing and build Chongqing into a competitive talent city.

At the meeting, current challenges and difficulties faced by universities and enterprises in attracting talents to work in Chongqing were being raised and discussed.  Suggestions and ideas on what the government could consider were being raised up.

Karen Woong, General Manager of WiseNet Asia Chongqing Branch, shared Singapore’s international talent policy.   She also shared on the major factors affecting the decision of talents in relocating to a foreign city.  As a headhunting company which has assisted numerous companies in international talent recruitment,   Wisenet Asia understands the needs and what these talents look for, including salaries, benefits, security, spousal relocation, children’s education, quality of life in the destination city, etc.

We trust that with Chongqing’s determination, it will achieve its goal in being a talent-friendly city where talents from all over the world will be able to develop their careers and enjoy their stay.

Written by TY Chin Copyright © 2017 WiseNet Asia Pte Ltd.  All Rights Reserved In the next three years, the Chongqing aviation industry will see massive growth through the development of an Aviation Economic Demonstration Zone. The zone will house an aviation economic ecosystem that consists of aircraft manufacturing, aircraft supporting industries, logistics and various intelligent manufacturing […]

Updated 7 Oct 2018

Written by TY Chin
Copyright © 2017 WiseNet Asia Pte Ltd.  All Rights Reserved

10facts bri1

1. Objectives

For Belt and Road Initiative (BRI) or One Belt One Road (OBOR) Countries:  China led shared economic growth through joint infrastructure developments and trade connectivity.

For China:  New markets for China products; exporting of China’s engineering and technology expertise, drive growth in the hinterlands.

2. Coordinating Government Agency

National Development and Reform Commission (NDRC), China’s premier economic planning agency.

3. The Routes

Silk Road Economic Belt consist of three land routes from China’s western region through Central Asia, extending up to North of Europe.

21st Century Maritime Silk Road consists of two shipping routes from Western Asia, through South East Asia, Africa and Europe.

4. Coverage

3 continents – Asia, Europe and Africa, 68 countries, 1/3 of the world’s GDP and 62% of the global population.

5. Common Traits of Belt and Road Countries

  • Belt and Road countries in Asia are mostly emerging economies with infrastructure deficits, except Singapore.
  • Suppliers of natural resources.

6. Major Beneficiaries

Banks in ASEAN, large scale infrastructure and townships developers, construction companies, construction engineering machineries, building materials, marine projects, water and power installations.

7. Financiers

  • China Policy banks: China Development Bank (CDB) and the Export-Import Bank of China (EXIM).  Both have extended $200 billion loans in Belt and Road projects as at 2017.
  • Multilateral development banks: Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), New Development Bank (NDB). AIIB was set up specifically for funding infrastructure projects, it has a registered capital of $100 billion with 56 members countries.  ADB’s key mission is to eliminate poverty.  Southeast Asia and South Asia are major destinations for ADB’s lending.
  • Funds: Silk Road Fund. Renminbi Overseas Funds and China-Russia Development Fund.  The Silk Road Fund was launched in 2015 with $40 billion of initial capital.

8. Flagship project

The China-Pakistan Economic Corridor (CPEC) is a massive infrastructure development program in Pakistan.  Started in 2013, the CPEC is budgeted to cost USD62 billion.  The project is estimated to create 2.3 million jobs between 2015–2030, and add 2 to 2.5 percentage points to the country’s annual economic growth.

9. China Outward Direct Investment in ASEAN

(in million US$)

Year\CountryThailandMalaysiaSingaporeIndonesia
20161071.911407.776037.70354.77
2017255.151600.464483.801840.82

10. Future of Trade in ASEAN

  • Internationalisation of RMB as OBOR countries increasingly used RMB for transactions.
  • Reduce trade barriers.
  • Shifting the global economic centre of gravity.

Disclaimer:  The opinions in this article are those of the authors and do not represent Wisenet Asia Pte Ltd.

Sources:

WiseNet Asia. (2017). China Insight: Bridging the gaps between China and Foreign Investments in Belt & Road Initiative (BRI) – WiseNet Asia. [online] Available at: http://wisenetasia.com/china-insight-bridgingbri/China-trade-research.hktdc.com. (2017).

The Belt and Road Initiative | HKTDC. [online] Available at: http://china-trade-research.hktdc.com/business-news/article/The-Belt-and-Road-Initiative/The-Belt-and-Road-Initiative/obor/en/1/1X000000/1X0A36B7.htmCia.gov. (2017).

The World Factbook — Central Intelligence Agency. [online] Available at: https://www.cia.gov/library/publications/the-world-factbook/fields/2111.html

Navigating Asia Pacific, China’s One Belt & One Road Initiative. (2017). 1st ed. CIMB, p.58.

En.wikipedia.org. (2017). China–Pakistan Economic Corridor. [online] Available at: https://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor

Ft.com. (2017). China encircles the world with One Belt, One Road strategy. [online] Available at: https://www.ft.com/content/0714074a-0334-11e7-aa5b-6bb07f5c8e12

(“ASEANstats Official Web Portal”, 2018)

WiseNet Asia was present at the 2017 Western Human Resources Services Expo (2017西部人力资源服务展览会)on the 24th of August to sign a MOU with Chongqing (North) Human Resources Company. We also set up a booth at the exhibition space for HR professionals and senior management team to find out more on our HR service offerings.

Check out our photos on the 2017 HR Expo below.

hrexpo
MOU exhibition boothexhibition
exhibitionoverview
 

 

Written by TY Chin
Copyright © 2017 WiseNet Asia Pte Ltd.  All Rights Reserved

 

Chongqing, the Investment Hot Spot in China

(Image Source: China Tour Map)

 

For companies that are looking to increase market size in the same region without high investment costs, Chongqing is gaining popularity with its large market size, gateway positioning, local government incentives, bilateral trade deals and strong local infrastructure development.

Chongqing is around 4 hours of flight from major South East Asia cities.  It is a municipality under the direct control of the central government.  The other three municipalities are Beijing, Shanghai and Tianjin.  In terms of market size, Chongqing is the most populous municipality with over 30 million people.  Its gross domestic product is 11% year-on-year, the highest among Chinese cities, provinces and municipalities.  In the last few years, it has developed into a high growth engine for the western region inland market.

 

China GDP by Cities 2015

(Image Source: China Internet Watch)

 

The 13th Five-Year Plan

The Chengdu-Chongqing region is one of the city clusters identified under China’s 13th Five-Year Plan (2016 – 2020) for economic and social development. Chengdu and Chongqing are the two largest business cities in Southwest China. This city cluster consists of 11 cities and over 40 million residents.   The five year plan also includes the mandate to accelerate the development of the Wuhan and Chongqing shipping centers in the middle and upper reaches of the Yangtze.

City cluster is an urbanization growth strategy.  It is a clustered geospatial layout driven by principal cities, and supported by small and medium cities linked by commuting corridors.  By leveraging on the advantages of a combined cluster, economies of scale are created together with job opportunities. For ease of doing business, operating from city clusters enable companies to serve a larger market from a smaller location with lower operational cost.

Belt and Road Initiative (BRI)

Chongqing is a key inland transportation hub for the Belt and Road Initiative.  The Belt and Road Initiative is China’s globalization project introduced by President Xi in 2013.  It encompasses more than 60 countries, 4.4 billion people and up to 40% of the global GDP.  The routes consist of the “21st Century Maritime Silk Road” and the “Silk Road Economic Belt”.  The Belt is a land route from China’s western region through Central Asia, extending up to North of Europe.  The Road consists of shipping lanes from Western Asia, through South East Asia, Africa and Europe.

Chinese Government Economic Projects

(Image Source: 恩典在线; Translated by WiseNet Asia)

 

Geographical Advantages

Chongqing is situated on the upper reaches of the Yangtze River, the longest river in Asia.   Its location in the Yangtze River economic belt is intersectional with the transcontinental sea and land routes of the Belt and Road Initiative.  This geographical advantage has made Chongqing a major hub in Eurasian logistics and connectivity, where much of the Belt and Road actions are happening.

The China-Singapore (Chongqing) Demonstration Initiatives on Strategic Connectivity (CCI), the third government-to-government project between Singapore and China, is a major South East Asia trade deal and part of the bigger Belt and Road Initiative.  From its inception in Nov 2015 until end of 2016, a total of US$3.22 billion financing deals have been signed.  The major areas of collaboration are financial services, aviation, transport & logistics, and information & communications technology.

Chongqing is an air gateway to the world with the seventh largest airport of China.  For local transportation, the road and rail networks enable travelling time of 4 hours to the counties belonging to Chongqing, and 8 hours to the cities around Chongqing.  Chongqing is connected to Southeast Asia through a highway that connects to the port city of Qinzhou in southern Guangxi.

Chongqing Logistics City (Chongqing Western Logistics Park) aims to connect Chonqing to Asia Pacific and Europe.  It is a RMB 111.7 billion investment with 4 international routes and 5 domestic routes.  From it’s rail terminal, the Chongqing-Xinjiang-Europe (Yuxinou International Railway) is a 11,179 km rail route stretching from Chongqing to Duisburg, Germany.  It takes an average of 14 days to reach Duisburg from Chongqing, compared to the 36-day container sea transport time.  On May 2017, an extension to the Chongqing-Xinjiang-Europe route, the Chongqing-Guangxi-Singapore express was launched.  The Chongqing-Guangxi-Singapore connects inland China with coastal areas in Guangdong and Guangxi, and Southeast Asia, Australia, New Zealand, Middle East and Africa by means of combined railway and sea transport.  In the same year, a free trade zone has commenced operations in the Logistics City.  With its favourable business policies and free trade status, the free trade zone aims to be a main hub of Belt and Road activities.

Chongqing Industry Park of Human Resources Services

Chongqing Industrial Park of Human Resources

Reception Area (Image Source: 重庆晨报)

 

Aerial View HR Industry Park

Aerial View (Image Source: 重庆晨报)

 

Recognizing talents as a key driver to growth, the Chongqing’s Industry Park of Human Resources Services is a RMB 20 billion, 158 acres industrial park that aims to be the centre of human resources solution for the western region.  The industry park will be the base of human resources companies that provide talent recruitment, learning and development, expatriates work permit services and other HR services.  The park’s operating model is an internet platform that provides for various talents solutions in Chongqing.  The City Council is also in the same location, providing the public services of overseeing workers’ social security, facilitating employment and entrepreneurship, providing vocational training and so on.  Being in close proximity enables closer working ties between the State authority and private HR companies.

In 2013, the city has a total of 265 human resources service agencies, employing 8819 people, with a turnover of RMB 10.4 billion. In a short period of 3 years, as of the end of 2016, the number of human resources agencies has grown to 1042 in total, employing 20373 people, with turnover of RMB 22.54 billion.  The strong growth in the HR industry reflects economic growth that is set to continue with ongoing push factors.

Final Thoughts

For the year 2016, China’s GDP grew 6.7%, the slowest in 26 years.  On the contrary, Chongqing continue to be the fastest growing major city with year on year growth of more than 10%.

Chongqing’s economic growth engine is running strong, propelled by government policies, bilateral trade deals and geographical advantages.  In particular, it’s bilateral trade deals have given favourable trade position for companies in South East Asia.

 

This article was last edited on 22nd August 2017.

Sources:

The 13th five-year plan for economic and social development of the People’s Republic of China.
En.wikipedia.org. (2017). Chongqing.
En.wmlip.com. (2017). Welcome to Chongqing Western Logistics Park.
Cq.xinhuanet.com. (2017). 西部第一家!重庆有个辐射全国的”人才聚宝盆”.

Click to view more Belt Road Initiative News

DEVELOPMENT SUMMIT OF CHONGQING PILOT FREE TRADE ZONE

WiseNet Asia’s Executive Director, Mr Wesley Hui attended the 2017 Chongqing FTZ Development Summit held on 7 July 2017.

The summit was one of the first official event to kick-start Chongqing district government’s plans in focusing on the development of regional economic development.  For a start, the summit’s theme was centered “Questions on the Free Trade Zone”, involving a guests speakers from Singapore, Chongqing and Shanghai – as well as a panel of expertise to facilitate the discussion.

WiseNet Asia Executive Director, Mr Wesley Hui, together with event partners and speakers, at the Chongqing FTZ Development Summit

WiseNet Asia Executive Director, Mr Wesley Hui, together with event partners and [speakers, at the Chongqing FTZ Development Summit [Photo Credit: CRJ Online]

For full article details (in Chinese), click here.

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