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Deloitte Invited to the Belt and Road Forum for International Cooperation

Interview with Norman Sze, Deloitte: Milestones achieved for the Belt and Road Initiative (Video source: CBN TV)

The Belt and Road Forum for International Cooperation was held in Beijing on May 14. Chinese President Xi Jinping attended the opening ceremony and delivered a keynote speech. The forum, attended by 29 foreign heads of state and government leaders, is by far the most important event of the year on the Belt and Road Initiative since President Xi first raised the concept in 2013. Deloitte was invited to the opening ceremony and the following Plenary Session addressed by Chinese Vice Premier Zhang Gaoli and attended by more than 1,500 delegates from over 100 nations. In the afternoon of the same day, Deloitte also participated in the panel discussion on Promoting Financial Integration jointly hosted by the Ministry of Finance and the People's Bank of China.

The forum highlighted the achievements of the initiative over the past 3 years and summarized references for the next stage of development. It also showed the direction for the future and expanded consensus. Regarding the initiative's future development, President Xi called on all parties involved to build the Belt and Road into a road of peace, prosperity, opening up, innovation, and a road connecting different civilizations. He said that China will scale up financing support for the Belt and Road Initiative by contributing an additional RMB 100 billion to the Silk Road Fund and encourage financial institutions to conduct overseas RMB fund business with an estimated amount of about RMB 300 ; and the China Development Bank and the Export-Import Bank of China will set up special lending schemes respectively worth RMB 250 billion equivalent and RMB 130 billion equivalent to support Belt and Road cooperation on infrastructure, industrial capacity and financing.

China has witnessed the number of its Fortune Global 500 companies increasing remarkably from 23 to 110 during the decade between 2006 and 2016, and the overseas investment up from USD16.1 billion to USD170.1 billion. In particular, China stepped up overseas investment with the implementation of the Belt and Road Initiative. In 2015 alone, China invested USD18.93 billion in the nations along the Belt and Road, representing a YoY growth of 38.6% and twice of the growth in its global investment.

On May 9, Deloitte Belt and Road Global Managing Partner and Deloitte China Government Affairs Unit Managing Partner Norman Sze was interviewed by CBN TV on the achievements and outlook of the Belt and Road Initiative.

Deloitte has been assisting Chinese enterprises in implementing the Belt and Road Initiative by leveraging its multi-disciplinary professional service capabilities and a globally connected network of member firms in more than 150 countries ever since the Belt and Road Initiative was first brought forward, and provided financial advisory, tax advisory, consulting and other professional services for the Belt and Road projects of more than 100 large central enterprises and SOEs over the past three years. Deloitte China conducted researches and published the white paper SOEs Going Global Leveraging the Belt and Road Initiative and 2017 Outbound Investment Guide for Chinese Businesses, participated in compiling the Report on the Belt and Road Layout and Risk Prevention and Control of Central Enterprises: the End to the Time of Uncertainties - a reference book for the implementation of the Belt and Road Initiative published by the State-owned Assets Supervision and Administration Commission, and worked jointly with the Investment Promotion Agency of the Ministry of Commerce to publish the Investment Promotion Report on Railway Industry and a series of practical reports on the implementation of the Belt and Road Initiative.

The Belt and Road has unfolded its blueprint for the future. Based on surveys on executives of Chinese enterprises and takeaways in assisting Chinese enterprises pursuing the Belt and Road Initiative over the past three years, Deloitte brings the following insights to enterprises in furthering their participation in the Belt and Road Initiative:

  • As the Belt and Road should be built into a road of prosperity, enterprises pursuing the Belt and Road Initiative should also consider their layouts along the Belt and Road in combination with their long- and mid-term strategies. Consider whether the industries, regions and other aspects enterprises engage in are in line with their long-term development strategy when making decisions - seize the momentum instead of following suit.    
  • As the Belt and Road should be built into a road of innovation, enterprises also need to innovate and build diversified channels for investment and financing, in an effort to make funding a catalyst, rather than an obstacle, for their participation in the Belt and Road Initiative. In the panel discussion on Promoting Financial Integration held on the afternoon of May 14, the Ministry of Finance of China signed the Guiding Principles on Financing the Development of the Belt and Road with the finance departments of relevant countries, and memorandum of understanding on cooperation in relevant fields with a number of multilateral development banks including the Asian Infrastructure Investment Bank, the(BRICS) New Development Bank, and the World Bank. In addition to the funding support measures by the Chinese government, enterprises should also proactively make use of the support for the Belt and Road from the above foreign governments and international financial institutions to expand funding channels and reduce financing cost.   
  • As the Belt and Road should be built into a road connecting different civilizations to promote people-to-people connectivity, enterprises should also build a system to recruit, develop, motivate and restrict global talents. Enterprises needs to ensure successful implementation of the Belt and Road projects and during the same process to enhance mutual understanding, respect, and trust among people from different countries through exchange and communication.     
  • Enterprises should attach more importance to due diligence and risk management in pursuing the Belt and Road Initiative. Neither overstate risks and become hesitant, nor ignore them and blindly rush forward. Enterprises should identify risks in a dynamic manner, proactively manage them, and make plans for response mechanism and countermeasures.  

Deloitte’s invitation to the Forum serves as a recognition of its contributions to Chinese enterprises in pursuing the Belt and Road Initiative over the years. Deloitte will continue to render full support to enterprises over the world, working in joint efforts for a new chapter of the Belt and Road!

Deloitte Belt and Road Global Managing Partner and Deloitte China Government Affairs Unit Managing Partner Norman Sze at the Belt and Road Forum for International Cooperation
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