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Belt & Road is a Chinese affair says new report

[ October 26, 2018   //   ]

China’s Belt and Road Initiative (BRI) or New Silk Road to develop trade between Europe, Asia and Africa is a massive undertaking but there is little chance of companies outside the country getting a look in, says a new report by logistics firm Militzer & Münch.

It says that Chinese enterprises are commissioned 80% of logistics services within the scope of BRI.

A team of students from the St. Gallen University of Applied Sciences and the Shanghai University carried out interviews with decision makers from the Chinese logistics sector.

China has invested about US$1.1 trillion in BRI to date.

M&M chief executive Dr Lothar Thoma observed: “Today, logistics is mostly decided upon in Europe and the USA. In the future, these decisions will come increasingly from China, as big Chinese enterprises are gradually conquering the world market and developing their own supply chains.”

He added: that while is little chance for European logistics companies in China directly, there were opportunities elsewhere “ especially in those countries where China is not yet or only scarcely active”, adding: “We profit from these opportunities in Kazakhstan and in Central Asia, for instance.”

To be awarded a contract in China, companies must make a 10% down-payment on the contract sum, the share capital of the logistics firm is scrutinised as are business reports and credit rating. The size of the company and the cost of the service are taken into account, too.

Developing partnerships with state-owned enterprises in China or with Chinese enterprises that are networked with state-owned entities is also crucial.

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