The “one belt, one road” initiative, Chinese president Xi Jinping’s (習近平) brainchild, is more about serving an internal agenda of the nation rather than anything else.
The program’s main objective is this: finding a way out for the country’s manufacturing sector which has been saddled with huge surplus capacity after decades of misplaced obsession with GDP growth.
If implemented well, the initiative can no doubt bring considerable political clout for China in countries along the so-called belt and road routes.
There has also been much talk that the program will throw up a lot of opportunities for Hong Kong.
But despite all the noise, the response from Hong Kong’s business community has been muted.
The reason: the economic viability of Beijing’s politically-charged projects looks far from convincing.
It is worth bearing in mind that in ancient China, the Silk Road and old marine routes did not come because of a supreme leader’s edict. They were actually the result of untiring efforts of numerous merchants who undertook grueling and sometimes hazardous journeys.
Hong Kong’s chief executive Leung Chun-ying has been mouthing Beijing’s belt and road platitudes, but his words have failed to move the city’s private sector.
Businesses, ultimately, are guided by profit considerations, not political factors.
“Hong Kong should proactively align itself with the belt and road strategy for its own good,” China’s No. 3 leader, Zhang Dejiang (張德江), said during a trip to Hong Kong last month.
Yet, many locals doubt if the city can respond, as there is a feeling that the cost-benefit ratio won’t suit private businesses.
The Hong Kong Economic Journal noted in an editorial that “the belt and road call upon Hongkongers sounds like going to the red planet and do business with Martians”. The comment says it all.
Hong Kong businessmen are realistic. They wouldn’t like to venture into projects in countries they do not have much knowledge about.
Now, if Beijing expects Hong Kong to merely help in fundraising, that too might not be very easy to come about.
As projects might not look attractive in terms of returns and the risks seem formidable, fundraising through commercial banks can be expensive.
That could, in fact, have been a reason behind Beijing’s decision to take the lead in establishing the Asian Infrastructure Investment Bank.
The bank will be generous with loans to fund projects in belt and road countries, something the private sector will find it hard to follow suit.
There are 64 countries, mostly in Central Asia, Middle East and Africa, where governments want China to boost development but at the same time won’t be ready to trim their ties with the West.
The nations lack versatile and professional talent, the labor force there is largely inefficient, and corruption is commonplace.
Further, if there are events like military coups and other political risks, business deals could turn sour and lead to all kinds of disputes.
Beijing may think its generosity, loans and other financial aid can help it overcome all problems in places such as Africa, but the reality could be different.
Being pragmatic, Hong Kong businesses are understandably hesitant to venture into deals involving some countries along the belt and road routes.
That said, there are some things that the city can indeed help with.
For one, Hong Kong can capitalize on its sizable number of immigrants from the belt and road countries, where people speak many languages and dialects.
The government can support language training programs or make it a prerequisite for scholarship recipients from the belt and road nations to contribute to exchange schemes.
The human resource can then be deployed to assist any company that is venturing into overseas projects.
Also, the city can explore potential opportunities that fall in Hong Kong’s area of strength.
This article appeared in the Hong Kong Economic Journal on May 25.
Translation by Frank Chen
[Chinese version 中文版]
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