With the construction of the New Silk Road, China shows its influence as the world's largest trading power—also towards Europe. In addition to Africa and Asia, the Silk Road passes through European countries and is intended to create new trade routes. Is it therefore an opportunity, a risk or even a danger for European companies?
“One Belt, One Road” (OBOR) is the name of the initiative to build the New Silk Road. The Chinese government is thus planning to further expand trade flows between Asia, Europe and Africa. New trade routes by road, rail and sea shall be created. Many European companies are skeptical about China's plans. At the same time, however, new sales markets are opening up—and thus new opportunities for Europe?
With the construction of the Silk Road, China is not shying away from investments:
China is thus also investing in the trade routes of European countries along the Silk Road. The projects include, for example, the construction of a high-speed rail link from Moscow to Kazan. In the future, the expansion of the transport and energy infrastructure is to be driven forward even further. Moreover, dozens of bilateral intergovernmental agreements have been concluded.
China's investments in European trade routes will have to be repaid by the countries involved. Can Europe's economy and the logistics sector benefit from it anyway?
The OBOR initiative explicitly invites foreign companies to participate in tenders for Silk Road construction projects, as they shall be preferred in contracting. In reality, the majority of construction projects are nevertheless carried out by Chinese companies. The figures from studies show poor prospects for Europe:
Andreas Breinbauer, Rector of the University of Applied Sciences of the Vocational Training Institute (BFI) in Vienna and Head of the Logistics and Transport Management Department also points out:
“The financing of Silk Road projects is only partly carried out by multilateral banks such as the AIIB, namely about 10 percent of the projects. There is a good diversification of investments in these projects. Only one third of the project partners are Chinese companies. Approximately 90 percent of the main lenders are Chinese state-owned or state-related banks, which preferably support Chinese companies, especially those close to the state.”
The chance of European companies to get construction projects is therefore very small. This contradicts the Chinese intentions of the new Silk Road to create networking and financial integrity. Are there still economic benefits for Europe?
Many companies in Europe also see opportunities in the New Silk Road, despite the weak participation in construction projects. Confidence is particularly high in Austria. According to a study of the University of Applied Sciences of the BFI Vienna (Logistics and Transport Management Department), 90 percent of the Austrian companies surveyed believe that the initiative will have a positive impact on Austria in the next ten years. A survey conducted by the Chamber of Foreign Trade in China showed that 35 percent of the China-based German companies assess the effects as positive.
The reason for the positive reactions: China is one of the most important trading partners for many European countries, not least because of the growing online trade. Many European companies would thus benefit economically from an expansion of the transport possibilities.
The construction of the New Silk Road offers the following advantages and opportunities for Europe:
As Europe's largest railway port, the Port of Hamburg also sees opportunities in the “One Belt, One Road” initiative: “The New Silk Road strengthens the good connections between Hamburg and its trading partner China,” says Axel Mattern, CEO of Hafen Hamburg Marketing e.V.
His organization manages several EU research projects in rail hinterland traffic. “There are already 235 weekly train connections between Hamburg and China from numerous providers, which can be expanded further.”
Further information on the Silk Road can be found in this press release .
The OBOR initiative also plays an important role in our conference program.