Gi­bral­tar eyes role in B&R push

China Daily (Canada) - - BUSINESS - By OSWALD CHAN in Hong Kong oswald@chi­nadai­

Gi­bral­tar’s ro­bust in­sur­ance and mar­itime in­dus­try pro­vides an im­pe­tus for China to push for­ward the Belt and Road Ini­tia­tive in Europe.

Al­bert Isola, min­is­ter for com­merce in the gov­ern­ment of Gi­bral­tar, pointed out that the United King­dom over­seas ter­ri­tory is an ideal fit for Chi­nese com­pa­nies.

“Gi­bral­tar’s rel­a­tively small size en­ables it to be nim­ble and re­spond quickly to mar­ket forces,” Isola said. “We have the abil­ity to serve Chi­nese firms bet­ter through greater trans­parency, in­for­ma­tion ex­change and bet­ter en­gage­ment than our com­peti­tors.”

Isola con­firmed that Gi­bral­tar had al­ready held talks with Chi­nese State-owned en­ter­prises.

“We have had de­tailed dis­cus­sions with China’s SOEs about the pos­si­bil­ity of Gi­bral­tar as a for­ward base and fi­nan­cial ser­vices cen­ter,” he said.

Gi­bral­tar is lo­cated on the south­ern end of the Ibe­rian Penin­sula, has a land area of 6.7 kilo­me­ters and shares its north­ern border with Spain.

Fi­nan­cial ser­vices, e-com­merce, tourism and ship­ping are the four main driv­ers of the ter­ri­tory’s econ­omy.

Isola said the “cap­tive in­sur­ance in­dus­try” and the ship­ping sec­tor in Gi­bral­tar were par­tic­u­larly rel­e­vant to the Belt and Road Ini­tia­tive.

The ini­tia­tive now cov­ers more than 60 economies across Asia, Europe and Africa, ac­count­ing for 30 per­cent of global gross do­mes­tic prod­uct or GDP.

By 2050, Belt and Road economies will con­trib­ute 80 per­cent of world­wide GDP growth, ac­cord­ing to a fore­cast by the McKin­sey Global In­sti­tute.

As Chi­nese busi­nesses con­tinue to in­vest heav­ily over­seas in in­fra­struc­ture projects and over­seas ac­qui­si­tions, in­sur­ance pro­tec­tion be­comes a pri­or­ity.

A pop­u­lar so­lu­tion is through cap­tive in­sur­ance. This al­lows the par­ent com­pany, or group, to cre­ate a li­censed in­sur­ance firm to pro- vide cover for it­self.

The main pur­pose for do­ing this is to avoid us­ing tra­di­tional com­mer­cial in­sur­ance com­pa­nies.

“With less than 10 cap­tive in­sur­ance com­pa­nies in China, we be­lieve th­ese (Chi­nese) busi­nesses could make greater use of over­seas cap­tive in­sur­ers,” Isola said.

“This will pro­vide lo­cal risk man­age­ment to pro­tect over­seas in­vest­ments. (They will also be able to) op­er­ate in lo­cal time zones, es­tab­lish re­la­tion­ships with lo­cal rein­sur­ance com­pa­nies and lo­cal reg­u­la­tors,” he added.

Gi­bral­tar is a major off­shore cap­tive in­sur­ance hub and also has thriv­ing ship­ping ser­vices.

It can of­fer China safe har­bors for in­ter­na­tional trade un­der the Belt and Road Ini­tia­tive.

“With 100,000 ships sail­ing through the Straits of Gi­bral­tar ev­ery year and China’s share of world trade in­creas­ing, it makes a lot of sense for Chi­nese ship man­age­ment com­pa­nies to use Gi­bral­tar as a base for bunker­ing, hull clean­ing, pro­vi­sion of stores and spares,” Isola said.

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