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UK maritime services sector welcomes China’s One Belt, One Road plan

UK maritime services sector welcomes China’s One Belt, One Road plan
The UK maritime sector’s positive response to China’s 21st Century Maritime Silk Road and Economic Belt development vision was confirmed by a strong turnout of high-level speakers and attendees at a half-day conference on the subject during London International Shipping Week.

‘All maritime roads lead to London’ commented moderator Doug Barrow, chief executive of promotional body Maritime London, organiser of the One Belt, One Road (OBOR) event.

That message was reiterated in the introduction by Maritime London chairman Lord Mountevans, who is due to take over as Mayor of the City of London later this year and has pledged to prioritise advancing business links between the UK and Shanghai.

Li Maochun, md of the investment arm of China Merchants (CM) Group, said there had been a good international response to the One Belt, One Road plan from ‘a world thirsty for a growth-driven, sustainability building policy,’ which he described as a ‘global outreach programme’ in the spirit of Marco Polo and Zheng He.

CM Group, China’s largest public ports operator with stakes in a total of 28 ports in 15 different countries, as well as one of the world’s largest tanker fleets and interests in other transport areas such as logistics and toll roads, was “fully embracing” the policy, he said, and had signed an MOU with container giant CMA CGM Group to explore investment opportunities arising from OBOR.

Michael Parker, chairman of CMA CGM (UK), confirmed his group’s view that this was an ‘exciting’ plan with ‘huge ramifications for the shipping industry generally.’ CMA CGM operates some 465 vessels and is the second largest container carrier from China to North Europe, one of its laden vessels leaving China every three hours.

ShiCheng Yang, chief executive of Cosco (UK), pointed out that one likely effect of the development of OBOR on the liner trade would be that “trading patterns will be different, for example in Africa and southeast Asia, and the[route] network will be more complex.”

Martin Stopford, president of Clarkson Research Services, pointed out that the modern-day version of the Maritime Silk Road was already a vital transport route for China’s imports of oil, gas and other natural resources, as well as for its manufactured exports. Shipping generally would benefit from better port and inland infrastructure in Asia generally, as well as economic development spread more evenly across non-OECD countries, leading to improved transport services.

Citigroup head of global shipping and logistics Michael Parker agreed with his namesake’s earlier comments as on the potential of the plan, pointing to an Ince & Co report published the same week that described OBOR as “the most important economic event of the 21st century,” while Norton Rose Fulbright’s global head of transport Harry Theochari chimed that it was a “phenomenal project.”

Nigel Anton, md and head of global shipping finance at Standard Chartered Bank, pointed out that the OBOR route would touch 65 countries with 4.4bn population, nearly two thirds of the global population, and coincide nicely with the predicted rapid growth across Asia of a consumer-rich middle class.

Speakers from Shangahi included Ben Zhang, promoter of the new Maritime and Finance Excellence (MFE) Centre there, who enumerated that some $8trn to $10trn investment in OBOR-related infrastructure was expected over the next 8-10 years; Ma Hongqi, head of Shipping Services for Pudong New Area, who outlined how the city was opening up to the implantation of overseas shipping businesses; and Ling Zhou of CMB Financial Leasing, who described how Chinese banks such as her own were steadily moving into shipping-related investment projects beyond merely financing ships built in China.

The relevance of all this to the maritime services sector of the UK was summed up by the COSCO (UK) boss, also known by his English sobriquet Simon Young. “What do we need for what I call Belt and Road?” he asked. “Money, where London has abundant resources, and a legal framework, where London is the only place that can advise on different [countries’] legal frameworks and systems.

“London also has insurance,” the necessary failsafe against projects going wrong, making it “one of the best places to do shipping or shipping-related projects,” he concluded - a comment which could serve to encapsulate LISW as a whole.