China is currently embarking on one of the largest infrastructure projects in human history. The Belt and Road Initiative aims to connect China economically and physically with South, Central and West Asia, Russia, Africa, and Europe, creating what many are calling a new Silk Road.
The goal of the program is to connect China with its trading partners through new transportation infrastructure, such as railroads, ports, airports and highways, while investing Chinese money in energy, manufacturing, resource procurement, agriculture and building projects throughout Eurasia and Africa.
Belt and Road is controversial. China is being accused of exploiting poorer nations by financing large scale projects in these countries, only to saddle their governments with massive debt, as well as using exclusively Chinese labour for projects, denying work to local labour forces.
Despite the opposition and push back from many quarters, a counter-argument has been made that such sweeping investments in infrastructure could improve the quality of life and economic outlook for millions of people in these regions.
Regardless of the ethics, China has many willing partners in this venture, and it’s pushing ahead at full steam with the ambitious plans.
A report from the Peterson Institute for International Economics, a Washington, D.C.-based think tank, says the US$1 trillion Belt and Road Initiative would ultimately cover over 65 countries, 60 per cent of global population and 40 per cent of global GDP.
So what does this mean for Canadian exporters?
The Asia Pacific Foundation of Canada argues that this initiative brings with it an abundance of procurement opportunities for Canadian companies to provide goods, services and consultation to projects both in China and in countries along the Belt and Road routes.
For companies already engaged in China, this is a chance to use your network of Chinese connections to break into other markets involved in Belt and Road, markets like Turkey:
For companies new to China, there are opportunities to take part in projects throughout the world that can be leveraged through the Canadian government and Canadian business associations.
Canada is a member of the China-led Asian Infrastructure Investment Bank, an organization funding infrastructure projects across Asia. This puts our government in a prime position to connect Canadian companies with lucrative procurement opportunities. The Canadian government can also leverage its membership in The World Bank, The Asian Development Bank and International Monetary Fund to similar effect.
For more information on how the Canadian government is connecting our companies with Belt and Road opportunities, consult TCS’s Beijing office, and for a broader context on the initiative, check out the Chinese government’s website.
Alongside Belt and Road, China has ambitious plans to connect Asia, Africa, Europe and even North and South America by high speed rail over the coming years. Many of these grand projects are still in the feasibility or concept stage, but those that come to fruition will bring a bevy of procurement opportunities for those connected in the Chinese market: