On May 7, McKinsey & Company and Urban China Initiative jointly hosted the Global Infrastructure Initiative Beijing Roundtable to discuss China’s One Belt One Road (OBOR) strategy. Approximately 30 leading figures from the public, private and academic sectors participated in an engaging discussion on how to take this ambitious strategy forward.
McKinsey’s Stefan Matzinger welcomed participants and introduced the Global Infrastructure Initiative, followed by a thought provoking presentation on One Belt, One Road: From dialogue to action by Guangyu Li. The report includes practical solutions for OBOR in terms of leveraging collective wisdom, expanding capital base, cultivating outstanding leadership, enlarging skilled labor force, and advocating green growth. The content is similar to what Dominic Barton presented at the 2015 China Development Forum in March, 2015.
Next up was a panel discussion with Dongsheng ZHAI, Deputy Director of the Western Development Department of the National Development and Reform Commission; Honghui CAO, Vice President of the China Development Bank Research Center; and Ben Way, CEO of Macquarie Group Asia, moderated by Haimeng Zhang. This was followed by a roundtable discussion with all participants contributing. Some of the key comments and insights include:
- OBOR has the potential for tremendous global impact. OBOR is not only a key strategy to China, it also influences all the related countries in the fields of public transport, regional economy, international cooperation, and the development of urban agglomerations.
- OBOR has the potential to drive the development of China’s western region. With 72% of China’s territorial land and 27% of the national population, China’s western region accounts for more than half of the poorest population in China.
- OBOR includes not only the construction of roads and bridges, but also of gas pipelines, communication facilities and the like. By connecting countries in diverse ways, OBOR will stimulate the market, facilitate trade, and link people together.
- Proper assessment of project risks will be central to OBOR’s success. The greatest risks in regional projects lie not in business, but in politics of the specific country, including geopolitical issues, and security risks.
- With China exerting a greater impact on the world and an increasing number of Chinese people living overseas, it is of vital importance to establish a secure system for overseas investment. China is seeking to collaborate with other countries to establish an innovative system.
- OBOR is triggering heated debates on the global stage because China is rising to a more important position. OBOR should have a simple model, so that more counties can get involved and benefit from a rising China. Establish a transparent regulatory framework, fair procedures and a neutral arbitration body will help build trust and resolve possible conflicts.
- A tremendous opportunity exists to help deliver good bankable projects to the gate to realize the OBOR ambitions.
- Developing the talent pool to support OBOR projects is an imperative to its success.
In summary, there is no doubt that OBOR has the potential to unleash one of the most exciting eras of infrastructure development. The hosting of the 2017 GII in China will be a useful vehicle for leaders to identify opportunities and develop a marketplace for bankable OBOR projects.