27 Mar 2017
The One Belt One Road (OBOR) initiative is essential to propelling the next stage of not only China’s but global economic growth.
That was the message delivered by Professor Wang Wen, the Executive Dean of the Chongyang Institute of Financial Studies at the Renmin University of China in his compelling opening keynote address to the RICS World Built Environment Forum in Shanghai.
Globally, infrastructure is in short supply. It is estimated that some 57-67 trillion US dollars of infrastructure investment will be required by 2030, with roads, power, and telecoms as the sectors in need of the most investment.
To create wealth – first build a road
Already OBOR has begun to meet these demands. In just three short years following its announcement in 2013, Professor Wang noted that Chinese companies had already undertaken 38 large-scale transportation infrastructure projects across 26 countries to deliver 8445 kilometres of high-speed rail and 3700 kilometres of other rail lines. Over the same period, China constructed 17 hydropower projects abroad with a total capacity of almost 10 million kilowatts.
Construction on this scale requires a remarkable degree of coordination, both within and across borders. Professor Wang noted that large infrastructure projects often take years, if not decades, to produce returns. This generally is significantly longer than the investment horizon for a private organization, so governments must play a leading role.
Dr Zhu Min, former Deputy Managing Director of the International Monetary Fund (IMF) and President of the National Institute of Financial Research at Tsinghua University echoed this sentiment in a panel discussion following Professor Wang’s remarks, highlighting that the greater degree of economic interconnectivity between nations requires international bodies that can take a global perspective to manage and contain financial risks.
Dr Zhu noted that already the New Silk Road and increased interconnectivity has begun shifting the balance of power from multinationals to SMEs, and from producer to consumer. Professor Wen added that behind OBOR, the forces driving increased globalization have shifted to emerging markets amid heightened political and economic uncertainty in developed economies.
Engagement important to break through nationalism
Nick Brooke, ABAC Strategic Advisor for the APEC Policy Partnership on Science, Technology and Innovation (PPSTI), and past President of RICS called this a “wake up call for us all.” However, he added that initiatives such as One Belt One Road run the risk of being intrusive for local populations, which highlights the importance of public engagement for both private and public bodies.
Sustainable investment key
The panellists all identified sustainability of investments as being a key pillar to such engagement. Although this represents a broad category of investment, it also represents a tremendous opportunity for innovation within the built environment.
With this in mind, Professor Wang called for the built environment to make greater use of green financial tools, invest more in green infrastructure, and support multilateral cooperation on green infrastructure. He noted that China has already taken steps towards this, with the G20 Hangzhou Summit including green financing on the agenda for the first time.
Image shows: Nick Brooke, Dr Zhu Min and Professor Wang Wen
What is the World Built Environment Forum?
The World Built Environment Forum is the global network of built environment professionals and their stakeholders aimed at combining knowledge, skills and resources to create and manage the built environment that global populations need.
What is the Annual Summit?
The Annual Summit offers a regular meeting place for the World Built Environment Forum to discuss the most pressing challenges and identify practical solutions, and to network with international peers. Held in a different urban hub every year, the first two editions of the Annual Summit took place in Washington DC in 2016 and in Shanghai in 2017. The next Annual Summit will be in London on 23-24 April 2018.
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