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Bonus: One Belt, One Road, Part 4 · Trumponomics

• 0:18
  Speaker 1: Hello everybody. I'm David Tweed. I'm a government reporter of
• 0:21
  Speaker 1: Boomberg here in Hong Kong. And with me is Tom mackenzie,
• 0:24
  Speaker 1: who's just completed the fourth of our series on the
• 0:28
  Speaker 1: Belton Road Initiative. And this is a series that actually
• 0:31
  Speaker 1: looks very closely the Belton Road Initiative and how it's
• 0:34
  Speaker 1: doing in Europe. And I have to say it's got
• 0:36
  Speaker 1: some mega personalities on it. It's a really good looking program.
• 0:40
  Speaker 1: And you started Athens, Tom, I was particularly interested in
• 0:45
  Speaker 1: in in how China apparently describes prayer support in Athens
• 0:50
  Speaker 1: as a dragon's head. What what what is that all about? Yeah,
• 0:54
  Speaker 1: I'm never short of colorful phrasing the Chinese when it
• 0:58
  Speaker 1: comes to things like this, they say, and they've just
• 1:00
  Speaker 1: drived as being a link for their overland and maritime
• 1:03
  Speaker 1: routes that of course are the Belton Road Initiative, and
• 1:07
  Speaker 1: they are very proud of the operations that they have
• 1:11
  Speaker 1: in place in careers. It is run now by Costco,
• 1:15
  Speaker 1: China's majing major shipping arm and they run it and
• 1:20
  Speaker 1: have done in the last few years. They took over
• 1:22
  Speaker 1: the concession in fully running this port and they've had
• 1:27
  Speaker 1: quite a lot of success. In fact, they've recently reported
• 1:30
  Speaker 1: their profits for the first half of the year that
• 1:32
  Speaker 1: we're up around from the last time in seventeen. So
• 1:37
  Speaker 1: they see it as as a as a key test
• 1:40
  Speaker 1: that they can show an example, a case study they
• 1:42
  Speaker 1: can show to others of success in terms of their
• 1:46
  Speaker 1: ability to take over a port and make it work
• 1:49
  Speaker 1: and integrated into their Belt and Road initiative, and and
• 1:52
  Speaker 1: and so tell us what's the response been like on
• 1:54
  Speaker 1: the ground to this, What do the Greek businesses think? Well,
• 1:58
  Speaker 1: that was interesting. We we went there and we spent
• 2:00
  Speaker 1: some time in and around Peireers, which is a fairly
• 2:04
  Speaker 1: deprived part of Athens, and we were expecting to find people,
• 2:09
  Speaker 1: their businesses and residents who had issues with the Chinese
• 2:14
  Speaker 1: running of this port. There had initially been some complaints,
• 2:18
  Speaker 1: particularly from the unions, when China and Costco took over
• 2:22
  Speaker 1: the running of the port, But in fact what we
• 2:24
  Speaker 1: found was, I guess you could describe it as a
• 2:26
  Speaker 1: kind of reluctant acceptance amongst businesses there, that in fact
• 2:30
  Speaker 1: the Chinese were running it very well, that it had
• 2:33
  Speaker 1: increased trade flows, that careers have benefited from that, and
• 2:37
  Speaker 1: that their benefits that their benners businesses were benefiting from
• 2:40
  Speaker 1: it as well, and they were looking to take advantage
• 2:43
  Speaker 1: of the opportunities. There are still concerns and those were
• 2:45
  Speaker 1: voiced by some of the business leaders that we met
• 2:47
  Speaker 1: there around whether or not Chinese firms are going to
• 2:50
  Speaker 1: start to eat up some of the opportunities, particularly around
• 2:52
  Speaker 1: the logistics side of the business that spin off from
• 2:56
  Speaker 1: the broader port. But generally the sentiment that we got
• 2:59
  Speaker 1: was was positive. Johmmy Tom, what about in terms of
• 3:03
  Speaker 1: employing locals at the port? Are there are there more
• 3:05
  Speaker 1: people being employed? Well? This was a key question when
• 3:08
  Speaker 1: Costco took over the running up press, and it was
• 3:10
  Speaker 1: a key concern of course for the unions as well.
• 3:12
  Speaker 1: When we went there, all the workers on the ground,
• 3:14
  Speaker 1: all the workers using the Falklick lift trucks shifting the
• 3:18
  Speaker 1: cargo off these huge tankers, they were all Greek. And
• 3:21
  Speaker 1: you go into the main office where the head of
• 3:25
  Speaker 1: the ports sits with his Greek counterparts. The managers are Chinese,
• 3:30
  Speaker 1: but they work alongside Greek management as well, and you know,
• 3:33
  Speaker 1: you've got the Chinese flag flying, the Greek flag flying.
• 3:36
  Speaker 1: You got pictures of the Great Wall of Chinese got
• 3:37
  Speaker 1: pictures of the aproperlex next to each other, so they
• 3:41
  Speaker 1: would say this is a really good example of the
• 3:42
  Speaker 1: two sides working together. So they are continuing to the
• 3:45
  Speaker 1: majority of employees there are Greek in short answer, and
• 3:48
  Speaker 1: they've been adding headcounts as the ports operations have grown,
• 3:52
  Speaker 1: though of course automation is playing an increasing role in
• 3:55
  Speaker 1: his port, as it is in ports all over the world. Well, yeah,
• 3:58
  Speaker 1: I thought it was interesting actually that you mentioned and
• 4:00
  Speaker 1: we actually saw you had an interview with the Chinese
• 4:03
  Speaker 1: manager of the port, because in some of our other programs,
• 4:06
  Speaker 1: particularly in the in the one in East Africa, the
• 4:11
  Speaker 1: Chinese actually were very careful not to be sort of
• 4:14
  Speaker 1: shown on the screen. But in this case you you
• 4:17
  Speaker 1: you spoke to the to the manager, what was his take?
• 4:21
  Speaker 1: I think you're right. I think it points to a
• 4:22
  Speaker 1: level of confidence in their operations there they open their
• 4:26
  Speaker 1: door to us. We spent time, as you say, talking
• 4:28
  Speaker 1: to the manager Young and Ming. We got access pretty
• 4:31
  Speaker 1: good access to the board and its operations, which again
• 4:33
  Speaker 1: I think shows that they are at least trying to
• 4:35
  Speaker 1: be transparent and are confident and relaxed about bringing foreign
• 4:39
  Speaker 1: journalists in to poke around a bit. He said that, look,
• 4:42
  Speaker 1: we're benefiting more broadly from the from the Belton Road initiative.
• 4:45
  Speaker 1: He said that we didn't and they are not getting
• 4:47
  Speaker 1: funds direct financing from the central government for this as
• 4:50
  Speaker 1: part of this initiative. But they're benefiting because of the
• 4:52
  Speaker 1: thick up and pick up in trade flows, and that
• 4:55
  Speaker 1: they're working to expand the operations there. They've got the
• 4:57
  Speaker 1: container terminal, they've also got the car to comin on
• 5:00
  Speaker 1: and a ship repairs part of the business as well
• 5:02
  Speaker 1: that they're investing in. So they continue to increase investment
• 5:05
  Speaker 1: in the ports and they continue to see opportunities there.
• 5:08
  Speaker 1: On the other place that you you went, well, one
• 5:10
  Speaker 1: of the other places you went to look like you
• 5:12
  Speaker 1: traveled all over over all over Europe. It looked lovely.
• 5:16
  Speaker 1: Actually in the middle of the summer, I can't think
• 5:18
  Speaker 1: of anything more pleasant, although here it was pretty hot.
• 5:21
  Speaker 1: But one of the other places you went was Duisburg, right,
• 5:25
  Speaker 1: another town, a German town, which is looks to be
• 5:30
  Speaker 1: benefiting from the entire initiative. Right, Yeah, again, this is
• 5:35
  Speaker 1: this kind of forlorn China, I should say, this is
• 5:38
  Speaker 1: the kind of forlorn German city. That was once a
• 5:41
  Speaker 1: part of the industrial economy there, so cole and steel
• 5:45
  Speaker 1: was really the driving force of the economy of Louisburg
• 5:49
  Speaker 1: a couple of decades ago. That of course, has all changed.
• 5:52
  Speaker 1: There's pretty high levels of unemployment there and the economy
• 5:56
  Speaker 1: has struggled in recent years. But certainly the port there,
• 6:00
  Speaker 1: which is the largest overland port in Europe, and the
• 6:04
  Speaker 1: access the connections to China and Chinese trade flows have
• 6:08
  Speaker 1: helped to change the prospects for the city. There are
• 6:11
  Speaker 1: still problems there, but they are seeing a take up
• 6:13
  Speaker 1: in trains coming from cities like chong Ching and Evil
• 6:16
  Speaker 1: in China, bringing those goods, particularly I T equipment, computers, laptops,
• 6:21
  Speaker 1: that kind of thing, as well as clothes and toys,
• 6:24
  Speaker 1: bringing it into Duisburg and then funneling it out to
• 6:27
  Speaker 1: the rest of the European Union and the town. Your
• 6:31
  Speaker 1: metrics was, I think you said there was thirty trains
• 6:34
  Speaker 1: a weaker arriving and that's going to rise to fifty
• 6:37
  Speaker 1: by twenties, so it deserved significant growth. I suppose. Yeah.
• 6:41
  Speaker 1: I mean, look, someone say that that's an overly ambitious target,
• 6:44
  Speaker 1: but the numbers now are around thirty, and yes, they've
• 6:48
  Speaker 1: they've signaled they want to get it up to fifty.
• 6:50
  Speaker 1: There's an element of caution around that number for various reasons.
• 6:53
  Speaker 1: They also want to cut down the time as well,
• 6:55
  Speaker 1: that it takes currently takes about twelve days to go
• 6:57
  Speaker 1: from a city like chong Ching to Duisburg, and they
• 7:00
  Speaker 1: want to cut that town, of course, because it makes
• 7:01
  Speaker 1: in a more attractive proposition. They're trying to position themselves
• 7:03
  Speaker 1: between between freight overseas freight and airline freight. So that's
• 7:10
  Speaker 1: the proposition they're aiming for. Tom, you were also in Brussels, Um,
• 7:16
  Speaker 1: what does the EU stance on this b r I initiative.
• 7:21
  Speaker 1: I mean, are they concerned about the geopolitical implications, Yes,
• 7:26
  Speaker 1: I think those concerns frankly there. And the concerns that
• 7:30
  Speaker 1: they really push at this point at this stage are
• 7:33
  Speaker 1: concerns around transparency the bidding process of these Belton Road initiatives,
• 7:38
  Speaker 1: around sustainability, financial sustainability, fiscal sustainability, the environment as well
• 7:44
  Speaker 1: environmental sustainability. These are all issues they say that simply
• 7:47
  Speaker 1: are lacking in terms of being baked into Belton Row projects.
• 7:51
  Speaker 1: They say that they they want to be involved from
• 7:54
  Speaker 1: the European perspective. But China needs to do a better
• 7:56
  Speaker 1: job of baking some of these these norms into this
• 8:00
  Speaker 1: initiative in order for the European Union to really get
• 8:02
  Speaker 1: on board. And is there some document or anything that
• 8:06
  Speaker 1: the European Union actually needs to approve or to sign
• 8:11
  Speaker 1: off on in order to for disintegration to deepen, Well,
• 8:16
  Speaker 1: there was. There was a Belton Road summit held in Beijing,
• 8:19
  Speaker 1: the first one last year, and the Chinese made an
• 8:22
  Speaker 1: effort to try to strong arm the Europeans into signing
• 8:25
  Speaker 1: off on the Belton Road initiative, and the Europeans pushed
• 8:28
  Speaker 1: back pretty strongly, and it caused something of a something
• 8:31
  Speaker 1: of a something of a sore point, or at least
• 8:34
  Speaker 1: a point of tension between the two sides, because simply
• 8:37
  Speaker 1: these these pledges around again around the bidding process and
• 8:42
  Speaker 1: around environmental standards and economic standards and fiscal stands weren't
• 8:47
  Speaker 1: there as far as the Europeans were concerned. So they
• 8:48
  Speaker 1: haven't signed onto it um and that the Chinese would
• 8:51
  Speaker 1: dearly love them to do that. We are still it
• 8:54
  Speaker 1: seems a fair distance away from that happening. The Europeans
• 8:57
  Speaker 1: are put forward their own proposals around infrastructure. They've got
• 9:01
  Speaker 1: a connectivity plan that they help will be will be
• 9:04
  Speaker 1: able to be in addition to, or will complement the
• 9:06
  Speaker 1: Belton Road initiative, and they want the Chinese to embrace that.
• 9:09
  Speaker 1: So that's kind of where we're at at this stage.
• 9:11
  Speaker 1: If the two sides can come together and if you
• 9:13
  Speaker 1: can have that connectivity plan that the Europeans have afford
• 9:16
  Speaker 1: baked into the Belton Road initiative, then you're going to
• 9:18
  Speaker 1: see much more enthusiasm from the Europeans. The geopolitical there
• 9:22
  Speaker 1: was a case another set of concerns Tom There was
• 9:24
  Speaker 1: a case recently or was it last year, and it
• 9:27
  Speaker 1: was a case of Greece and I think another country,
• 9:30
  Speaker 1: was it Hungary? Was that that had had had voted
• 9:34
  Speaker 1: against um some decision that needed unanimity on the European Union.
• 9:42
  Speaker 1: Is there still a sense that China we'll trying to
• 9:45
  Speaker 1: attempt to peel off just one country, like we've sort
• 9:49
  Speaker 1: of seen with China's approach to the South China, see
• 9:52
  Speaker 1: where it gets in the way of as you end
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  Speaker 1: unity by pressuring loud or Cambodia not to sign up
• 10:00
  Speaker 1: two statements that need unanimity. Is is there a concern
• 10:04
  Speaker 1: about that strategy playing out in in the European Union. Yeah,
• 10:09
  Speaker 1: there is that concern, and we spoke to Paul Henley
• 10:11
  Speaker 1: from the Carnegie E. Tinghai Institute. He's a former member
• 10:13
  Speaker 1: of the National Security Council for the White House in Washington.
• 10:17
  Speaker 1: We spoke to also Foncois Gourdemore from the European Council
• 10:20
  Speaker 1: on Foreign Relations, and they both pointed to this concern
• 10:22
  Speaker 1: that China was using this dividing conquer approach visa v.
• 10:26
  Speaker 1: The Belton Road, and it's just visa its investments in
• 10:28
  Speaker 1: Europe and particularly trying to leverage those investments when it
• 10:31
  Speaker 1: comes to countries that need that fiscal support, so countries
• 10:35
  Speaker 1: like Greece and Hungry, and you pointed to that example.
• 10:37
  Speaker 1: There was an example as well of the European Union
• 10:40
  Speaker 1: trying to put out a statement in relation to the
• 10:42
  Speaker 1: South China Sea and the Greeks and Hungarians watering that
• 10:46
  Speaker 1: statement down, and that was seen as an example of
• 10:50
  Speaker 1: China's leverage in that regard. So that is a concern
• 10:54
  Speaker 1: as well, clearly amongst the Europeans. Now you spoke to
• 10:57
  Speaker 1: Joe Kaiser, who is the chief executive of Siemens, which
• 11:01
  Speaker 1: is uh, you know, Siemens has been investing in having
• 11:05
  Speaker 1: business in China since at first exported a power generation
• 11:09
  Speaker 1: a hundred and fifty years ago or something. Um. So
• 11:14
  Speaker 1: what did Joe Kaiser did? Did he did he respond
• 11:16
  Speaker 1: to any of these sorts of concerns about transparency that
• 11:20
  Speaker 1: the European Union has? He did? He said, I put
• 11:24
  Speaker 1: it to him. You know, you're at risk of tarnishing
• 11:26
  Speaker 1: the brand, the Siemens brand by associating yourself with companies
• 11:31
  Speaker 1: with state owned enterprises and initiatives that don't have the
• 11:34
  Speaker 1: same levels of corporate governance and transparency that maybe a
• 11:38
  Speaker 1: company like Siemens does. And he pushed back on that said, look,
• 11:41
  Speaker 1: we simply will not work on projects where there are
• 11:43
  Speaker 1: concerns around graft for example, or where the bidding process
• 11:47
  Speaker 1: hasn't been transparent. But effectively, his point was, this is
• 11:50
  Speaker 1: such a vast project, um and you know you can
• 11:54
  Speaker 1: take issue with it, but it is going to happen
• 11:56
  Speaker 1: and you need to get involved and steer it in
• 11:59
  Speaker 1: the right direction. He said, A company like Seems can
• 12:02
  Speaker 1: bring our expertise, as he would say, to the table
• 12:05
  Speaker 1: and help to shape these projects so that they meet
• 12:08
  Speaker 1: the norms that the Europeans, but others like the US
• 12:11
  Speaker 1: and Australians want to see as well. So that was
• 12:14
  Speaker 1: his position, as he certainly sees it as obviously an
• 12:16
  Speaker 1: opportunity of seems at a time when the business is
• 12:18
  Speaker 1: struggling in some areas, and he said it could end
• 12:21
  Speaker 1: up replacing the w t O. And I don't think
• 12:23
  Speaker 1: it's a fairly strong statement from him, but he was saying.
• 12:27
  Speaker 1: You know, his point really was if you don't get
• 12:29
  Speaker 1: on board, then you risk missing out on this opportunity
• 12:34
  Speaker 1: there's involving ninety countries, as he put it in about
• 12:36
  Speaker 1: the world's population. Yeah, that comment that he had about
• 12:40
  Speaker 1: the b r I eventually or partially possibly replacing the
• 12:44
  Speaker 1: w t O very very interesting. But also look, I
• 12:47
  Speaker 1: was more interested in the fact that you actually got
• 12:49
  Speaker 1: him on a factory floor. How did you get him
• 12:51
  Speaker 1: out of his offers? Well, I think that goes to
• 12:53
  Speaker 1: show the extent to which Siemens wants to be affiliated
• 12:56
  Speaker 1: with this initiative. That we obviously contacted them so would
• 12:59
  Speaker 1: do this show on the Belton Road initiatives. They said,
• 13:01
  Speaker 1: we're fine, we want to be involved. They've got an
• 13:03
  Speaker 1: office in Beijing dedicated to the Belton Road initiative. They've
• 13:06
  Speaker 1: signed something like ten memorians of understanding. They really want
• 13:10
  Speaker 1: to be a leading force from the corporate side in
• 13:13
  Speaker 1: in this initiative and in shaping some of these some
• 13:16
  Speaker 1: of the opportunities, and they think that they can bring
• 13:19
  Speaker 1: a lot to play. So that's that's I think an
• 13:21
  Speaker 1: example of just their willingness to show that they are
• 13:24
  Speaker 1: signing up to this even if the European Union itself isn't.
• 13:27
  Speaker 1: So got him inside one of these massive turbine factories
• 13:31
  Speaker 1: where they design and build and put together some of
• 13:33
  Speaker 1: these huge turbines, and we and you know, he gave
• 13:36
  Speaker 1: a pretty forthright set of views on the implications of
• 13:40
  Speaker 1: this initiative, which he said is are not perfect. It
• 13:42
  Speaker 1: is not perfect, he said, but the idea of ignoring
• 13:44
  Speaker 1: it is is not something that should be should be considered. Well,
• 13:50
  Speaker 1: I think that anecdote that you just told about how
• 13:53
  Speaker 1: Siemens has got an office not dedicated to Belton Road
• 13:56
  Speaker 1: in Beijing pretty much shows ex actly what European business
• 14:01
  Speaker 1: thinks about the whole initiative and how seriously they're taking it. Tom.
• 14:06
  Speaker 1: Thank you very much, um and and everyone you know,
• 14:10
  Speaker 1: thanks for listening. It's been a great series. I'm David
• 14:12
  Speaker 1: Tweed in Hong Kong. I've been speaking with Tom mackenzie
• 14:15
  Speaker 1: and Beijing