Belt and Road Initiative offers huge opportunities for UK business
This week I am heading a delegation of British businesses to the Belt and Road Summit in Hong Kong. The summit will bring together leaders from across government, industry and individual businesses that have the ability to drive through China’s vision for the BRI.
Hong Kong is a thriving global hub, with strong rule of law and an open society, and over 630 UK companies are based in the market. Crucially, this means that these UK firms are ideally placed to win work on the Belt and Road Initiative alongside companies from Hong Kong and mainland China. They also embody high standards in professions such as project planning, design, implementation and operation, and have an extensive track record in delivering high profile, public infrastructure projects in Hong Kong itself.
Projects such as the HK$6 billion (US$764 million) midfield concourse at the Hong Kong International Airport (HKIA), completed by Gammon Construction, and the three-runway system, designed by Mott MacDonald, showcase the cutting-edge and high-quality design, build, engineering and construction which UK companies offer.
The iconic Murray Building in Hong Kong transformation was led by Foster & Partners, British architects that visualized the evolution of a government building into a luxury hotel. The project, led by contractors Gammon Construction, demonstrates the breadth of expertise the UK can and will offer to BRI projects.
The Belt and Road Initiative will be most successful where projects incorporate high international standards for infrastructure, delivering positive impact in the areas where host countries need it most. The ability of British business to fulfill these large-scale infrastructure projects supports economic growth and sustainable development in market; increases connectivity and trade; reduces long-term costs; and improves access to public services like education and health. This expertise makes the UK’s offer truly unique, and why we are confident that our companies can help make the BRI a true success.
We can also offer value in a range of other sectors vital to the success of the Initiative. Through our leading financial institutions, we can add real value in a way few countries can match. For example, the UK exported £64.7 billion (US$84.8 billion) worth of financial services in 2017 – making us the largest exporter of financial services in the world.
That’s why we are positioning London as the premier global center for funding and facilitating BRI projects. Year after year our financial and professional services sector has been judged to have the most impressive infrastructure, the strongest skills, and the best overall reputation. UK best practice and innovation in finance will support improved transparency and risk management of BRI projects. We also want our financial services sector to use its emerging markets expertise to ensure projects along the Belt and Road routes are economically and financially sustainable.
It is not just the Belt and Road Initiative which lies behind our optimism for future UK-China trade ties. Today, technological advancements are creating a new more seamless world with global supply chains, meaning that simple labels such as “Made in China” or “Made in the UK” are becoming redundant. We need to rethink our concepts of global trade and take advantage of the opportunities created by this change.
Both the UK and China recognize the value of globalization, as already reflected in the record levels of UK-China trade ties – currently worth more than £59 billion, with UK exports to China growing by 32.2% last year.
And there is no sign of that growth stopping; China’s middle class is expected to number 600 million by 2020 – greater than the current entire population of the European Union.
This offers fantastic potential for UK businesses looking to sell their goods and services in China, as illustrated by the £9.8 billion worth of trade deals overseen by International Trade Secretary Dr Liam Fox during the prime minister’s visit to China in January 2018. These deals covered a range of sectors, including energy, education and financial services, and included major new investments into the UK.
In March, I helped lead a delegation of 300 UK businesses and seven universities to the GREAT Festival of Innovation in Hong Kong, attended by 1,600 people. Entrepreneurs and businesses of all sizes came together for a festival that was a shop window for the best of British creativity and innovation, and a golden opportunity for British companies to create new business relationships with China.
As China rebalances and reforms its economy, I hope that this summit, alongside our continuous engagement with the Chinese market, will see British companies winning BRI contracts and stepping up their trading relations with this ever-growing market.