May 7, 2015, Beijing – The Urban China Initiative and McKinsey’s Global Infrastructure Initiative jointly hosted the Urban Leaders Roundtable to discuss China’s “One Belt One Road” strategy on May 7 in Beijing. Dongsheng ZHAI, Deputy Director of the Western Development Department of the National Development and Reform Commission; Honghui CAO, Vice President of the China Development Bank Research Center; and Ben Way, CEO of Macquarie Group Asia shared their insights with 30 leading figures from the public, private and academic sectors.
McKinsey Director Stefan Matzinger welcomed participants and introduced the Global Infrastructure Initiative (GII). Since 2012, GII has convened the world’s most senior leaders in infrastructure to identify tangible actions to improve infrastructure delivery. “We hope to leverage GII as a vehicle to join hands with all governments, companies and think-tanks to contribute more thoughts on how best to take this grand One Belt One Road strategy forward,” Matzinger said.
Guangyu LI, Director of McKinsey & Company, presented some of the strategy suggestions in the latest McKinsey report -One Belt, One Road: From dialogue to action. The report includes practical solutions for OBOR in terms of leveraging collective wisdom, expanding capital base, cultivating outstanding leadership, enlarging skilled labor force, and advocating green growth. Recently, at the 2015 China Development Forum, McKinsey’s Managing Director Dominic Barton delivered a keynote speech on this topic. This report will be presented to Premier LI Keqiang by the Forum organizer.
OBOR has the potential for tremendous global impact. UCI’s Director of Research ZHANG Gengtian argued that OBOR is not only a key strategy to China, it also influences all the related countries in the fields of public transport, regional economy, international cooperation, and the development of urban agglomerations.
Dongsheng ZHAI, Deputy Director of the Western Development Department of the National Development and Reform Commission (NDRC) hopes that OBOR will drive the development of China’s western region. With 72% of China’s territorial land and 27% of the national population, China’s western region accounts for more than half of the poorest population in China. “We hope OBOR will bring the under-developed region to the forefront of opening-up,” said ZHAI.
As to infrastructure construction, ZHAI pointed out that OBOR includes not only the construction of roads and bridges, but also of gas pipelines, communication facilities and the like. “By connecting countries in diverse ways, OBOR stimulates the market, facilitate trades, and links people together,” ZHAI said.
Proper assessment of project risks is the basis of OBOR’s win-win strategy. Honghui CAO, Vice President of the China Development Bank Research Center, argued that the greatest risks in regional projects lie not in business, but in politics. He said the risks come from each project country, as well as geopolitical issues, and security risks could be incurred as a result.
“China is exerting a greater impact on the world and there are more and more Chinese people living overseas. Therefore, it is of vital importance to establish a secure system for overseas investment. We hope to join hands with other countries in establishing an innovative system,” said CAO.
Ben Way, CEO of Macquarie Group Asia, pointed out that OBOR is triggering heated debates on the global stage because China is rising to a more important position. He suggested that OBOR should have a simple model, so that more counties can get involved and benefit from a rising China. “Also, OBOR needs to establish a transparent regulatory framework, fair procedures and a neutral arbitration body to prevent and resolve possible conflicts,” said Way.
McKinsey & Company’s Global Infrastructure Initiative (GII) was created as a vehicle to help unlock the recurring infrastructure bottlenecks, explore new frontiers, and drive change in the industry. Since 2012, GII has brought together the world’s most senior leaders in infrastructure from across the value chain - ministers, governors, mayors, investors, board chairs and CEOs - for an unrivaled discussion about the future of infrastructure.
The Urban Leaders Roundtable Series is UCI’s quarterly flagship event. Invitation-only, it brings ministers, government directors, corporate senior executives, top academic theorists and NGO leaders together to examine pressing urban issues in China.