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10 Key Facts about the 1 trillion Belt and Road Initiative

Updated 7 Oct 2018

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

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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)

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Chongqing, the Investment Hot Spot in Asia

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

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Hire more effectively! 6 Simple Recruiting Tips to Know

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

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Recruitment is an ongoing HR agenda as top talents are always in demand to drive bottom line profits. If done wrongly, recruitment could cause the company to lose money.  The function of hiring is becoming more sophisticated with continuous refinement and technology enablement.  There are fast rules for getting the best value such as buying top position advertisement space, featured advertising, choosing certain times and days of the week, etc.  However, while there are standard measures to improve the recruitment function, there are also the core fundamentals that will ensure better returns over the long run.  Here are 6 tips for employers to consider as part of their hiring best practice:

  1. Employer branding

Candidates choose ‘The Brand’ when all things are equal.  Just like when a consumer has doubt in choosing a product, they will choose the brand they have heard of and know what the brand represents. This is known as a safe choice.  “Employer branding” refers to how companies position themselves as a positive brand to work with.  It starts from within with a system of welfare encompassing individual growth opportunities, clear value path and on the job benefits.  Building good employee reputation starts from inside out.

Many companies have made a lot of effort in refining employment benefits to keep good employees and attract talents; these efforts should be made known to candidates.  Especially for Small Medium Enterprises (SMEs) who often find it hard to attract talents compared to multinationals, candidates do not know who they are and what they represent.  There are pros and cons working for SMEs and multinationals, SMEs should communicate their employer brand story more in various touch points such as Facebook, Instagram, a little goes a long way.  Eventually, when they do hire, at least candidates can see a historical pattern of priority on employee well-being.

  1. Simple and Specific Job Advertisements

Job advertisements should be straight to the point, simple and very specific.  Even though there are circumstances where the requirements need to be very detailed going up to ten pages, despite the high level of detail, good candidates are likely to be put off.

A job advertisement with a just few lines about the job and basic requirements will make it easier for candidates to find the job they desired.  If in doubt, always check out the professional head hunters’ recruitment advertisements, they are always specific with only the key elements.

  1. The Right Character

Skills can be trained, but it is hard to change an individual’s personality and character. An individual’s character can largely dictate the extent of their contribution in a team environment, affecting productivity.  Character, not academic results, should be evaluated thoroughly when choosing candidates to hire, if the work experiences are almost similar.

Some companies have realised this and placed character traits as part of their job requirements.  To ensure that people with the right character traits are hired, recruiters can run personality test during interviews, screen the candidates’ social media profiles and also ask for referrals.

  1. Engage Professional Recruiters for Senior-Level, Complex Jobs

Senior-level and complex job roles require thorough and structural process management from short listing to on-boarding. Professional recruiters have a methodical way of hiring and are unbiased as the objective party between organisations and candidates.  They are able to line up qualified and the right fit of candidates through their reputation and database of contacts.

Once the candidate is on the job, the external recruiter can still act as a mediator should differences arise between employer and the candidate.   Sourcing out C-level roles may require a high level of confidentiality, which can be easily managed by a third party professional recruiter through non-disclosure and confidentiality agreements.

  1. Social Media Recruitment

Social media is a free platform for companies to reach out to a wider pool of candidates.  The available social recruitment tools include Facebook, Instagram, Twitter, LinkedIn, Wechat and Weibo.  Live streaming in Facebook, Periscope and some live video apps enable candidates to see what it’s like working in the company, so that they can better decide whether the workplace is right for them.  A live Q&A session answers candidates’ queries on the spot about the job.  Anyone can post questions on the employer’s Facebook or LinkedIn pages and get answers available to be seen by the public.

The best approach for recruitment advertising is a combination of traditional media, professional job portals and social media because active job seekers often look into the main job seeking mediums before searching anywhere else.   Passive job seekers respond more to social media and may cost the same or more to recruit compared to active job seekers because they are not motivated job changers.  Nevertheless, social media still has the best advantage in speed of communication.

  1. Versatile Staff with Diverse Perspectives

The last tip is also the one which we concluded bring in the most value to any company:  Someone versatile with diverse perspectives and skill sets bring new ideas to the company.  Being versatile, they are able to multi-task and strive to deliver what is needed for other tasks.  They could make up for whatever is lacking in the team by becoming an all rounder.

Fast measures in recruitment such as top spot job advertisements and technology enablement help but adoption of the hiring fundamentals guarantees safe returns on investments.

Did you know? The 15FQ+™ Test

One of the well-known psychometric tools WiseNet Asia uses is the 15FQ+™, also known as Fifteen Factor Questionnaire Plus.

15FQ+™ is an advanced and comprehensive personality test which analyses the potential capabilities of an individual according to personality traits he/she possess.

Using established, quality psychometric tools has helped us in finding the right candidates for our valued clients. They are an asset to us in making strategic and highy effective recommendations of our candidates – based on their personality/motivation, together with the working culture in the hiring company.

WiseNet Asia strives to deliver quality search and value added services to our clients in many ways to achieve high success.

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