27 Mar 2017
Is the world on the brink of a new economic era, prompted by historically high levels of populism and wealth disparity? Is the global economy locked into low growth, while carrying risks from a strong dollar, rising interest rates and currency volatility? And how will we cope as productivity fails to keep pace with a shrinking working age population in the developed economies? These were just some of the globally significant challenges put to 700 participants on the first day of the Annual Summit of the World Built Environment Forum in Shanghai.
One approach is to invest heavily in infrastructure, as China is doing through the One Belt, One Road (OBOR) initiative, widely seen as a revival of the Silk Road, or as Professor Wang Wen put it “an ancient solution to a very modern problem”. Participants welcomed the opportunities for the Belt and Road to increase trade and help emerging economies develop further.
Interactive map: Discover the incredible infrastructure developments that form part of the New Silk Road
The Belt and Road would rely on a pipeline of projects that investors were willing to finance; however, summit speakers were concerned that current approaches to investment risk were inadequate. They called for greater transparency, risk allocation, regular risk reviews, effective governance and a culture of risk management. For example, it was too easy for state-owned enterprises to assume that the state would underwrite losses. The Asian Infrastructure Investment Bank (AIIB) — the leading source of finding for OBOR — had adopted guiding principles of “lean, clean and green”. Increasingly the Chinese Government saw OBOR as a “Green Silk Road” with low carbon technology, a means of competitive edge and a foundation stone of Chinese diplomacy.
Professor Wang Wen: OBOR is essential to propelling the next stage of not only China’s, but global economic growth.
Professor Wang Wen, Executive Dean of the Chongyang Institute of Financial Studies at the Renmin University of China at WBEF
Within ten years there will be 500 cities with more than one million inhabitants, accounting for 80% of all carbon emissions. Cities can expect to undergo three forms of change: technology, behavioural and urban evolution. They will need to compete to attract talent and investment, as hubs for technology, travel and services/industry. Successful cities would be cohesive, resilient and have a vibrant employment market. The best would meet citizens’ demands to be “liveable” rather than merely habitable, including affordability, agility, amenity, security and opportunity.
Real estate would have to adapt to a future workforce that is more distributed and flexible, and to companies wanting to work more collaboratively and innovatively.
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There will be greater focus on strategic management of built assets, with running costs accounting for 85% of a building’s total cost. This would mean new skills for facility management professionals and a need to bridge the gap between technologists and managers.
On day two, the Summit will explore how cities can be resilient and will compare the conditions for attracting foreign investment into China and securing Chinese outward investment.
Find out more about the World Built Environment Forum
The World Built Environment Forum
Across the two days of this Annual Summit, key decision-makers from across the industry and from around the globe discussed how global trends are likely to affect us all, and looked at best practice from the world’s leading gateway cities.
Key global challenges, such as how to ensure a project is investible, how China’s cities can attract foreign direct investment, how cities outside China will attract Chinese investors, and how cities outside Asia will attract Asian investors, were brought to the table, triggering original and thought-provoking discussions.
The next World Built Environment Forum Annual Summit takes place in London between 23–24 April 2018. Register your interest to participate here.
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