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Grand China plan will open doors for WA trade

China’s push for One Belt, One Road will potentially cover 65 per cent of the world’s population, a third of the world’s GDP and 25 per cent of goods the world moves, according to McKinsey research.

Chinese President Xi Jinping’s grand plan is for the belt – a road – to run from China through Eastern and Western Europe to Venice, while the road – a maritime route – would see goods shipped from Venice around eastern Africa to China.

CCI Chief Economist Rick Newnham says completion of the massive project may be decades away but WA businesses should plan now for the opportunities it will bring.

He will discuss the initiative at the One Belt, One Road business breakfast at CCI on March 14.

“What China plans to do is link Europe in the same way the Silk Road trading route of Eurasia used to be connected,” he says.

“Even though the maritime route won’t touch our borders, it presents vast supply chain opportunities for business.”

Even though it’s early days, Newnham says it’s clear the Chinese Government is making One Belt, One Road a high priority and has established funding and loans for countries to build infrastructure.

Many countries are in discussions with China about the initiative. The Kathmandu-based Nepal China CCI said this week it would open up opportunities for Nepal in trade, infrastructure, tourism and investment.

Newnham says WA businesses should know what’s on the horizon so they can gear up their workforces and strategies.

“If a business knows they are going to have an opportunity to start exporting those goods more cheaply, they can reconfigure their business plan to be hitting that target in a few years’ time,” he says.

“The opportunities initially will be in infrastructure, but once that supply chain is built up, the cost of getting WA products into those countries will be much less and that’s the whole point, that you get this really smooth supply chain.

“The time to move goods, a shipping container from Beijing to Europe for example, will be one quarter or less than the time it now takes.”

 

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