Con­fer­ees like Asia in­vest­ment bank idea

China Daily (Canada) - - BUSINESS - By LI JIABAO in­Ma­cao li­ji­abao@chi­nadaily.com.cn

China’s pro­posal for a mul­ti­lat­eral bank to de­velop in­fra­struc­ture projects in Asia re­ceived a “pos­i­tive re­sponse” as the coun­try called for a group of projects to boost re­gional con­nec­tiv­ity, a se­nior of­fi­cial said on Thurs­day.

“We are col­lect­ing feed­back on the pro­posed Asia In­fra­struc­ture In­vest­ment Bank. We re­ceived a good re­sponse from many Asian coun­tries,” Zhang Xiangchen, China’s as­sis­tant min­is­ter of com­merce, told China Daily dur­ing the 5th In­ter­na­tional In­fra­struc­ture In­vest­ment and Con­struc­tion Fo­rum, which is be­ing held in Ma­cao from Thurs­day to Fri­day.

Zhang added that China will ac­tively ad­vance the es­tab­lish­ment of the bank, which should have “a very big in­flu­ence on re­gional con­nec­tiv­ity as fi­nanc­ing is the most prom­i­nent bot­tle­neck in in­fra­struc­ture de­vel­op­ment”, he said.

But par­tic­i­pants have not talked about what shares of cap­i­tal will be in­jected in the bank, Zhang said.

The bank pro­posal was put forth by Chi­nese Pres­i­dent Xi Jin­ping last Oc­to­ber and echoed by Pre­mier Li Ke­qiang dur­ing the April Boao Fo­rum for Asia. The Fi­nanceMin­istry said in­March that the bank, with a man­date to fund in­fra­struc­ture projects in the re­gion, would have cap­i­tal of $50 bil­lion, paid for by its mem­bers.

“Dif­fer­ent economies can com­bine their in­di­vid­ual plans with re­gional con­nec­tiv­ity to boost co­op­er­a­tion,” Zhang said.

He also called for in­no­va­tion in fi­nanc­ing to re­solve cap­i­tal short­age in in­fra­struc­ture de­vel­op­ment.

“China’s over­seas con­tract­ing en­ter­prises are fac­ing a pe­riod of up­grad­ing from project con­struc­tors to ser­vice providers, project oper­a­tors and man­agers. ... They are fac­ing new chal­lenges such as fi­nanc­ing in economies fac­ing lend­ing ceil­ings. The pub­lic-pri­vate part­ner­ship is a good ex­plo­ration,” Zhang said.

The to­tal rev­enue of China’s over­seas con­tract­ing busi­ness rose 17.6 per­cent year-on-year to $137.14 bil­lion in 2013, while the value of newly signed con­tracts went up 9.6 per­cent to $171.6 bil­lion, ac­cord­ing to the China In­ter­na­tional Con­trac­tors As­so­ci­a­tion.

Vaughn Bar­ber, head of China Out­bound at KPMG Ad­vi­sory (China) Ltd, said that Chi­nese over­seas con­tract­ing en­ter­prises lack clear strate­gies for over­seas in­vest­ment and busi­ness up­grad­ing.

“The most im­por­tant chal­lenge for China’s over­seas con­trac­tors is im­age. They are also less de­vel­oped in risk con­trol and re­source in­te­gra­tion af­ter merg­ers and ac­qui­si­tions. In ad­di­tion, big­ger par­tic­i­pa­tion of pri­vate en­ter­prises in the coun­try’s over­seas con­tract­ing busi­ness would help en­hance lo­cal­iza­tion,” Bar­ber said.

Stephen Ham­mond, the UK’s par­lia­men­tary un­der­sec­re­tary of state for trans­port, called for closer links be­tween Chi­nese and UK in­fra­struc­ture firms to iden­tify op­por­tu­ni­ties for col­lab­o­ra­tion and ex­plore emerg­ing mar­kets.

“To­gether, we know just what it takes— with China’s far-reach­ing pres­ence and long­stand­ing ex­per­tise in con­struc­tion and the UK’s ex­per­tise in in­fra­struc­ture in­vest­ment, to achieve bet­ter out­comes in build­ing large-scale projects on the con­ti­nent,” Ham­mond said.

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