China’s Belt & Road Initiative (BRI) presents immense economic opportunities for US businesses, which should take advantage of them by participating in the international effort, experts said.
“The Belt & Road Initiative is a gigantic project, and while Chinese companies, and especially Chinese state-owned companies are taking the lead in many respects on this, there are opportunities for American and other partners to participate,” said Clayton Dube, Executive Director of the US-China Institute at the University of Southern California.
He spoke at the annual luncheon of the Long Beach-Qingdao Sister Cities Association (LBQA), at which government officials, business representatives and scholars from both countries discussed opportunities and challenges presented by China’s BRI for Southern California companies.
The BRI, proposed by President Xi Jinping in 2013, aims to build a trade and infrastructure network to seek common development and prosperity.
Dube noted that some American companies, including local corporations, have participated in infrastructure projects within China, “and now potentially in other places”, he added.
Trimble, a Sunnyvale, California-based company, helped to build Beijing’s New Airport Project and Chengdu’s new airport, Dube said. Other big US companies involved in the initiative include Los Angeles-based AECOM, Deerfield, Illinois-based Caterpillar, as well as General Electric, which is headquartered in Boston, Massachusetts.
Dube pointed to the Chinese environmental technologies market as an area in which he sees major potential for collaboration between China and California, which is the US leader in clean energy.
“The Chinese government said that the environmental market, the market for environmental technologies in China is $77 billion. That’s gigantic”
“There are a lot of opportunities, and California happens to be a place with some of these technologies, so this is a very important part of the discussion,” Dube added.
Brian Peck, director of USC’s Center for Transnational Law and Business, said a number of important trade partnerships in the East Pacific region, including the Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership (RCEP) as well as the BRI “are moving forward without very much US participation”, he said.
He said American companies are going to be put at a disadvantage, “unless the US changes its policy and becomes more involved, or more engaged on a regional basis”.
Joining the BRI will create a number of long-term benefits for the US, including economic development, investment opportunities for US companies and the expansion of markets, Peck said.
He also counted a number of short-term advantages, including clean technologies, infrastructure development, and engineering and logistic services. However, he warned that even the near-term BRI opportunities are clouded by the current trade tensions between the US and China.
David Griffith, a lawyer and the immediate past chair of LBQA, said he would like to see opportunities in the BRI for smaller companies, too.
“We are interested here for Southern California companies and being able to participate, because they are talking about billions and billions (of dollars’ worth) of projects being awarded for bridges and highways and ports and e-commerce, communication, et cetera,” he said.
“I’ve been very interested in the B&R initiative for several years now. I think it’s a very impressive program that the Chinese have created,” Griffith added.
“There are certain challenges with American companies and their views about China, being able to do business in China, or being involved with Chinese projects in terms of being treated fairly. I think that from my perspective, the Chinese government and the Chinese companies have always treated the American companies fairly,” he said.
“I just think that there is a certain mistrust that has to be overcome, but I think it is being overcome, the problem is now with the trade war, you made a lot of progress, and then you come back. So you have to start up that progress again,” he added.
Zhang Ping, the Chinese consul general in Los Angeles, who made the keynote speech at the luncheon, said the BRI does not only focus on infrastructure building, but also on trade and investment facilitation, financial cooperation, and cultural and people-to-people ties.
China just hosted the second China International Import Expo in Shanghai, the envoy said. The number of US companies participating increased by 18 percent over 2018. The American businesses’ exhibition floor space also ranked first among all participating countries.
“The BRI originates in China; its opportunities and benefits belong to the world. While the US government takes a negative view on the BRI, many US companies are taking an active part in its projects,” Zhang said.
“We will enhance trilateral cooperation and encourage cooperation among all participating countries. This will provide companies in California with lots of opportunities to collaborate with B&R countries. We believe by working together, the BRI can achieve win-win results for all,” he said.