The New Silk Road Group-Roundtable I


NEW SILK ROAD GROUP- THE FIRST ROUNDTABLE DISCUSSION

THEME: THE ROLE OF THE NETHERLANDS IN THE BELT ROAD INITIATIVE *1 A discussion with Stakeholders, Scholars, Industrial Players, and Government Officials

www.new-silk-road.org

Date Friday, 19 October 2018
Time 13:30 - 16:30 (GMT +02:00)
Location Rotterdam School of Management, Erasmus University
Theil Building, CT-1, Burgemeester Oudlaan 50, 3062 PA Rotterdam, the Netherlands

Program:

As part of a series of monthly roundtable discussions, this event will explore the role of the Netherlands in the Belt & Road Initiative (BRI). The aim of this public roundtable is to bring together researchers, companies and government officials to discuss how the Netherlands should position itself with regard to the Belt & Road Initiative (BRI). The discussion will include examining the short- as well as long-term prospects of the BRI and their relevance to the Netherlands.

13:30 Opening and welcome by the Chair: Zhang Ying (RSM) 13:40-13:50 Round of introductions by panel members

13:50-14:00 Introduction: Implications and opportunities of rail freight transport between China and the Netherlands, Chris Wensink (Panteia)

14:00-14:40 Statements by the panelists: What role for the Netherlands in BRI?

14:14-15:00 Q&A with the audience 15:00-15:15 Break
15:15-16:30 Debate on the following questions 16:30 End of program

Summary of the 1st NSRG Roundtable Discussion

Summary of presentation from Panteia

In short, the BRI offers a huge growth potential, yet there are a lot of gaps in the infrastructure. For example, brake and gauge & transshipment at Malaszewicze / Brest and Dostyk / Alashankou, Kogros. The European transport economy shall be mildly affected. For example, the port of Rotterdam shall be affected more than the port of Trieste. The negative impact shall be offset by the positive impact for example by Tilburg, Duisburg, Łódź and Minsk might become strategic hubs due to their position.Europe should be aware of the impact of BRI with the EU, and a proactive approach is necessary in order to achieve reciprocity and an equal playing field. For example by setting up infrastructure funding guidelines and monitoring Chinese investments for compliance purposes.

Summary of the Panel Discussion

Panelists:
Edo de Ronde (Rotterdam Partners)
Cui Rong (China Telecom)
Jin Weihuang (ICBC)
Chris Wensink (Panteia)
Ewout Stunnphius (Loyens & Loeff) Mohammadbagher Forough (Leiden University) Frans-Paul van der Putten (Clingendael) Moderator: professor Ying Zhang

From a historical perspective, China and the Netherlands have a long-standing relationship in trade. From the 17th century onwards, the Dutch-East India Company traded amongst others with China. Nowadays both countries are strong investment partners of each other. The Netherlands is third strongest EU-partner.

After the announcement of President of China (Xi Jing Ping) of the New Silk Road ambition (Belt and Road Initiative – hereafter: BRI) Rotterdam, but also the Netherlands in general, was not fully prepared for the weekly visits of Chinese delegation. Since early 2000, the Chinese advertised about the ‘Eurasia land bridge’ (= now known as: BRI) and therefore were already aware of the aforementioned plans, while the Netherlands had been made aware since 2015 onwards. This in stark contrast now, where Chinese delegations are met and informed by their Dutch counterparts. However, this process took quite some time.

The media-attention on the BRI focussed mainly on rail freight. This aspect of the BRI is the most specific manifestation for the Dutch media of the BRI. More media-attention is warranted on other aspects of BRI, e.g. maritime Silk Road, digitization, monetization of the Yuan. This is in stark contrast to their Chinese business, which are fully aware of the BRI due to the Chinese media-exposure and amongst its diaspora. one important extract of BRI in the future will be the cooperation will be also in the air-transportation.

China has taken over several companies, due to the Go-Out Policy from early 2000 onwards. This has been met with less resistance at that time. Recently, Germany has blocked a takeover of a German manufacturer of semi-conductor by a Chinese firm due to national security. Recently, the European member states, mainly the Netherlands, are focussing on enhancing protective (legal) measures in order to prevent takeover certain companies that operate in vital markets ( e.g. communication, finance) by foreign companies. For example, América Movíl (affiliated with Carlos Slim) could not take over the Dutch KPN due to protective measures.

China is already investing hugely within and at the periphery of the EU. For example, acquiring a significant amount of shares in the Piraeus Container Terminal PCT S.A., i.e. the harbour of Piraeus. In addition, it is focussing on building a high-speed rail from Belgrade (Serbia) to Budapest (Hungary). Now, this project has encountered some difficulties. However, it is expected that the project will finalized in the upcoming decade. It has been remarked that the EU and its member states should examine whether the investments are reciprocal. Examples of Hambantota Port (Sri Lanka) was used for illustration purposes, which currently is leased to China for free for a period 99-year in order to pay off the BRI debt.

There were some questions relating to compliance to EU and mainly Dutch law. Especially, in relation to data. According to Dutch and EU-law, telecom companies are burdened with extra administrative tasks. This works is regarded as cumbersome, since it requires extra work. However, Chinese companies are willing to comply and respect in order to do business within the Netherlands.

Questions were raised regarding the perception of China. For example, Djibouti is a country with a lot of foreign military basis of the United States, France, Great Britain and Saudi Arabia. Mostly, they are located there to protect trade vessels from local pirates. Yet, certain countries become concerned when China is planning to open a military base for the same reason. *) Now, India is planning to open a military base in Djibouti. These plans are not met with the same anxious feelings in comparison with Chinese base.

The monetization of the Yuan could bring China the necessary economic power that could rival with the vested powers. However, China lacks the military power that is similar to the US. The latter spends approximately 50 per cent of its annual budget on its military power. Therefore, it is still a long way before China may rival the vested powers outside the economic realm.

As one, the audience member has pointed out that countries rally heavily on electronic devices, such as GPS, and need to look into on how to protect themselves. Some panelists concur with this idea. However, everyone agreed that the Sino-Dutch relationship should be based on reciprocity in order to flourish.

The generic notion is that the Netherlands should be cautiously optimistic. It should be open for trade opportunities. However, it must not forget that reciprocity is key in order to strengthen the aforementioned relationship and for creating an equal playing field.

TO BE CONTINUE...