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BELT & ROAD INITIATIVE;

CHINA PAKISTAN ECONOMIC CORRIDOR

Kamesh De Silva 10449279 2 Belt & Road Initiative: ChPEC


Table of Contents
Executive Summary........................................................................................................................................ 4
1. Introduction ................................................................................................................................................. 5
1.1 Introducing Georgiou (Western Australian Construction firm) ............................................................. 5
1.2 China Pakistan Economic Corridor. ............................................................................................................ 6
1.3 The Involvement Of Georgiou Group In ChPEC (China-Pakistan Economic Corridor) ................... 6
2. What is Belt & Road Initiative ? ............................................................................................................. 8
3. Importance Of China Pakistan Economic Corridor. ....................................................................... 9
4. How Does OB OR Work? ........................................................................................................................ 10
5. Guanxi : How Business Is Done In China ......................................................................................... 12
6. Business Customs Etiquette In China ............................................................................................... 13
7. Advantages of One Belt One Road for Georgiou Group Australia........................................... 14
8. Disadvantages of One Belt One Road for Georgiou Group Australia..................................... 15
9. Recommendations for BRI Market Entry ........................................................................................ 16
10. Conclusion .............................................................................................................................................. 18
11. References ............................................................................................................................................... 19

Kamesh De Silva 10449279 3 Belt & Road Initiative: ChPEC


Executive Summary
On the 28 March 2015 China presented One Belt, One Road (OBOR) initiative, which isnt just
another new Silk Road project, well determined Eurasian strategy of a growing power which is
rather consistent. The One belt and one road initiative is based on planned linkages from various
regions and existence of China concerning the outside world. Reinforced by large financial donations,
better expressed than other similar projects. Therefore, Georgiou Group Western Australian
Construction firm aims to present the strengths and implementation challenges for China-Pakistan
Economic corridor. We took into account several levels on analysis: introduction to Georgiou Group
and ChPEC, the involvement of in ChPEC , guanxi, business customs in china , advantages and
disadvantages for Georgiou Group from BRI. Finally, we offer several suggestions concern BRI
market entering, in order to be perceived as a responsible power on the international arena.

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1. Introduction
The Chinese government bounces its economy in order to gain its assert of responsible world market
power. Which belt and road initiative project combines nations with OBOR, improving the Eurasian
exchange and by network connectivity across southern Asia, westren Asia and central parts of Asia,
touching out east and north Africa as well as Middle east. The New Silk Road is wider in its scope
than its procedure, for an example construction of Silk Roads, dating back to the Han Dynasty and the
launch of policy Go Out was introduced by the Chinese government in 1999. And the original silk
roads that embody land and ocean routes connecting Xian to Rome primarily through southern
corridors, crossing Turkey and Asian country, the Belt and road initiative ought to additionally cross
central Asia, Russia, and Eastern Europe. (Amighini, 2017)

1.1 Introducing Georgiou (Western Australian Construction firm)

Started in 1977, Georgiou synergy of six business units offers whole of package capability. With
Georgiou Project Management, Infrastructure, Engineering, Building, Mining Services, and Pre Cast.
Georgiou operates an in-house pre cast concrete manufacture facility and dedicated plant department
servicing over 250 pieces of our plant and equipment with a 7 year LTI FREE record. Georgiou head
office in Western Australia and it expanded in to Queensland, Victoria, and New South Wales means
Georgiou continues to explore new business opportunities with sustains stability to ensure stronger
and a brighter future for our people.
The vision is to work with the best people and Georgiou values
-Safety
-Teamwork
-Excellence
-Pride; with guides our interactions and decisions, which shakes the Georgiou culture. Georgiou has
shared LWP visions and commitment in building up prestigious neighbor hood at Elmbrook and has
shared the journey building 14 year relationship another project built on successful partnership is the
remediation of the old midland railway work shops. Under early contractor involvement with the
midland redevelopment authority. Georgiou understanding of construction in pipelines and pumping
stations has laid us to cater maunders population growth .VPS partnership engage Georgiou to build a
new DN1400 pipeline from Harvey sterling trunk main to the north Mantry tank with an extensive
studies carried out to the flora fauna soil and heritage of the area.

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Georgiou building has established it self with a reputable builder securing projects number of diverse
developments. Georgiou with preen architects designed and developed and construct residential
apartment using preens pod technology. Which incorporate with stackable housing system with
energy efficient green energy principles. Using Georgiou in house pre cast facility we decided to
innovate steel mold that enables a pod to be cast in one piece guaranteeing a high quality product.

Georgiou also provide marine and port construction solutions. Road and bridge construction large-
scale concrete structures and crevice installation for the mining and LMG industries.
As an important upgrade to Perth public transportation network Georgiou has recently completed the
design and the construction the new Perth arena bus bridge for the public transport authority. This
improvement, launched bridge replace as an act grade bus way and won a CCFWA EARTH award.
We have perceived as the strongest and survived for over 30 years in the Australian market.

1.2 China Pakistan Economic Corridor.


In the 21st Century between land routes in Gwadar deep-sea port of Gwadar, Kashgar in
western china to Pakistan it also includes a major chapter of sea-based Maritime Silk Route that will
be easily and cost-effectively connecting China through Gwadar to the broader Indian Ocean, the Gulf
states and East Africa, all the way to Mediterranean via Red Sea, thus with north Africa and Europe. It
firstly announced by the Chinese President Xi Jinping when he visited Asia and South Asia in 2013.
The new transit and trade facilities will not only upgrade and expand the existing Pakistani
infrastructure, but it will also provide China win an alternate transit and trade route in a cost-effective
manner to broader global regions. (Ahmad & Mi, 2017)

1.3 The Involvement Of Georgiou Group In ChPEC (China-Pakistan Economic


Corridor)
The Belt and Road Initiative is a considerable potential interest to Georgiou Group Australia,
considering a number of perspectives getting into an BRI Project is crucial for the survival of the
company, including opportunities for Australian businesses arising from infrastructure and other
projects in countries which are formally on the Belt or the Road, and Chinese involvement in
infrastructure projects in Australia which may complement various aspects of the Belt and Road
initiative.
The Government of the Islamic Republic of Pakistan (GoP) through its National Highway
Authority intends to accelerate National highway, motorway, tunnel and bridge development through
increased private sector participation thereby promoting economic growth and reducing poverty.
(Ministry of Communications Government of Pakistan, 2009)

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Transportation is an important sector of Pakistans economy, making up 10% of the GDP and
over 17% of Gross Capital Formation. The sector consumes 35% of the total energy annually and is
the recipient of substantial portion of the annual federal public sector development program. (Ministry
of Communications Government of Pakistan, 2009)

An efficient transport system is a pre-requisite for Pakistan to become globally competitive,


and the growth in capacity must be achieved while increasing service levels and decreasing costs.The
transport sector covers roads, road transport, railways, ports and shipping, and aviation. The sector has
direct and indirect linkages with all important sectors of the economy which influence economic and
social development. (Ministry of Communications Government of Pakistan, 2009)

Georgiou Group have considerable expertise in areas such as the design, construction,
financing, and management of infrastructure projects and operations for which there are likely to be
profitable opportunities arising from Belt and Road projects in Asia and Europe.

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2. What is Belt & Road Initiative ?

Currently chinas economic diplomacy has become the centerpiece if chinas BRI. The focus is on
chinas integration into the world economy along much depth avenues and beyond its trade and flows
of investment than ever before. Though the government of china legitimately prefers to call it an
initiative, as the new opening up strategy it should be deemed, and the change in domestic and
international should be developed in response to its circumstances. the myth in the name of the
initiative explained by Mr. Yuan Li the BRI pursues multidimensional economic and political
objectives.
(Amighini, 2017)
President of Peoples Republic of China Xi Jinping declared in 13th September 2013 the Silk Road
economic belt in Kazakstan and afterward dilated the program to incorporate the maritime Silk Road
in February 2014. Belt and road initiative platform aims to reveal the large trade potential bolster
economic development to the alleged belt, connecting western china and central Asia to the middle
east by land route, similarly on the therefore referred to as road; around south east Asia the Persian
Gulf and also the horn of Africa that connect by sea route. (Amighini, 2017)

Currently chinas economic diplomacy has become the focus if chinas BRI. The main target is on
chinas incorporation into the planet economy on abundant depth avenues and on the far side its trade
and flows of investment than ever before. Though the government of china legitimately prefers to call
it an initiative, because the new gap up strategy it ought to be deemed, and also the modification in
domestic and international ought to be developed in response to its circumstances. the parable within
the name of the initiative explained by Mr. Yuan Li the BRI pursues four-dimensional economic and
political objectives. Commented [CK1]: Paragraph repeated ???

(Amighini, 2017)

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3. Importance Of China Pakistan Economic
Corridor.
Chinese Government is trying to utilize the entire necessary supporting role to enabling the
environment for the open economic system and logistic system in the regional vision of CPEC. Apart
from china and Pakistan surrounding countries will benefit from CPEC. CPEC is the correct initiative
for both countries and also play a major role of importance for them. Pakistan will increase its
economic growth through this project, and it is the right initiative for both countries China and
Pakistan. Peace, prosperity, and development is intended by CPEC. Although the CPEC will face a lot
of challenges, have significant potentials of promising future. Lack of right decision and inadequate
opportunities has affected the people of Pakistan many a times in the past. How ever with the
involvement of the CEPC in terms of state transformation the prosperity of the people will increase.
With the Chinese commitment of $46 billion following the president visit inn2015 CPEC was able to
grab the world attention in terms of growth of economy and new development, which in its essence is
the true prosperity between the two nations.
(Henny & Kiran, 2017)

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4. How Does OB OR Work?

Promotions of Relations between citizens


There will be a focus on promoting interaction between citizens in relations upon executing this
initiative, allowing for extensive cultural and academic exchanges. Such endeavors will help to
strengthen public support, and deepen bilateral and multilateral cooperation. These aim to increase
personnel exchange and cooperation between countries along the Belt and Road. (BDO Advisory Pte
Ltd, 2015)

There will be focus on relations upon executing this initiative, letting cultural and academic
exchanges. Such undertakings will facilitate to reinforce public support and deepen mutual and
multilateral cooperation. These aim to increase personal exchange and cooperation between countries
on the Belt and Road. (BDO Advisory Pte Ltd, 2015)

Financial Integration
A vital part of implementing the Belt and Road initiative would be to enhance financial integration
between countries. Planning to build a financing system. There will Additionally make different
monetary activities in the pipeline for the extending for fiscal collaboration. Fiscal foundations for
example, such that the Asian infrastructure Investment bank Furthermore BRICS New Development
bank need aid made to extend those degree of multilateral financial participation. Also, monetary
regulation cooperation is tended to through Expanded cross-boarder return between credit rating
institutions and systems. (BDO Advisory Pte Ltd, 2015)

Boosting monetary integration between countries is a result implementing the belt and road initative.
There are plans to create a currency stability system, investment and finance system, and credit data
system in Asia. there'll even be alternative monetary initiatives within the pipeline for the deepening
of economic cooperation. monetary establishments like the Asian Infrastructure Investment Bank and
BRICS New Development Bank are established to expand the scope of triangular monetary
cooperation. Also, monetary regulation cooperation is self-addressed through accumulated cross-
border exchange and cooperation between credit rating establishments and systems. (BDO Advisory
Pte Ltd, 2015)

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Trade and Investment Facilitation Measures
Development in trade & investment assistance through those evacuation of investment Also trade
restraints to those streamlining of the possibility to stretched cooperation will make made could
reasonably be expected for this initiative. Nations along the belt Furthermore road might investigate
new development ranges from trade and move forward trade structure. Negotiations once reciprocal
investment and trade and promote high investment.(BDO Advisory Pte Ltd, 2015)

Infrastructure Development
Countries along the Belt and Road would be able to improve the connectivity of their infrastructure
construction plans and form an infrastructure network, bringing together all sub-regions in Asia,
Europe and Africa, taking into account of each others security and sovereignty concerns. Key
transportation passageways will be improved on, in order to realize international transport facilitation
for the different countries through the following areas:
Railways and highways;
Sea ports;
Aviation;
Energy Oil and gas pipelines, power supply; and
Communications Optical networks

(BDO Advisory Pte Ltd, 2015)

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5. Guanxi : How Business Is Done In China
The Chinese culture, by contrast, need encouraged an alternate practices from claiming
benefits of the business over the millenniums. The standards for guanxi oversee business ethics (and
every last bit other particular interactions, for that matter). Guanxi puts the good commitments that
stem from individual connections most importantly other considerations, including a employer's set of
principles even laws. These obligations, moreover, often transcend the time and distance. Those idea
that tolerant employment with a company, especially a foreign company, Might some way or another
override one's obligations will individuals with whom you quit offering on that one need long term
relationship idea under the concept of guanxi. On fact, executing or neglecting An organization's
interests ahead from claiming personal commitments might be viewed as unethical. From this cultural
perspective, An Chinese national employed in a Western organization might perceive it Similarly as
much alternately his or her obligation on steer business should a long-term friend's company, in any
case of cost alternately personal satisfaction. Though a relationship obliges that gifts make given in
exchange for certain favors, guanxi similarly endorses the return. Those acts is viewed as not just
moral as well as lawful. (Scott, 2017).

Still, guanxi need its limits; it is not a license to steal. Like other principles of Chinese culture,
those guideline is in view of control. Over the top guanxi violates both moral also legitimate
standards. In the Claiborne case, those gifts that the two Chinese intelligence officers provided for
their initiate and the ulterior motives behind them crossed those lines for control Furthermore
under that domain of unlawful abundance.
(Scott, 2017).

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6. Business Customs Etiquette In China
Relationships and communication
According to a research the Chinese don't like doing business with companies they don't know, so
working through an intermediary is crucial. This could be an individual or an organization who can
make a formal introduction and vouch for the reliability of your company. (Commisceo Global
Consultancy)
Before arriving in China send materials (written in Chinese) that describe your company, its history,
and literature about your products and services. The Chinese often use intermediaries to ask questions
that they would prefer not to make directly. Business relationships are built formally after the Chinese
get to know you. Be very patient. It takes a considerable amount of time and is bound up with
enormous bureaucracy. The Chinese see foreigners as representatives of their company rather than as
individuals. Rank is extremely important in business relationships and you must keep rank differences
in mind when communicating. Never lose sight of the fact that communication is official, especially in
dealing with someone of higher rank. Treating them too informally, especially in front of their peers,
may well ruin a potential deal. The Chinese prefer face-to-face meetings rather than written or
telephonic communication.
Meals and social events are not the place for business discussions. There is a demarcation between
business and socializing in China, so try to be careful not to intertwine the two. Appointments are
necessary and, if possible, should be made between one-to-two months in advance, preferably in
writing. If you do not have a contact within the company, use an intermediary to arrange a formal
introduction. Once the introduction has been made, you should provide the company with information
about your company and what you want to accomplish at the meeting. You should arrive at meetings
on time or slightly early. The Chinese view punctuality as a virtue. Arriving late is an insult and could
negatively affect your business relationship Each participant will take an opportunity to dominate the
floor for lengthy periods without appearing to say very much of anything that actually contributes to
the meeting. Be patient and listen. There could be subtle messages being transmitted that would assist
you in allaying fears of on-going association. (Commisceo Global Consultancy)

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7. Advantages of One Belt One Road for
Georgiou Group Australia

From BRI Project there are many boundless opportunities for Georgiou Group, which is able to
broaden to the overseas market and Georgiou has the opportunity to quickly climb the construction
curve. (Lumsden, Knight, & Daveson, 2015)

Complex construction projects enabled Georgiou to gain confidence in project delivery and develop
world best practices in project planning and financial forecasting, talent and risk management.
(Lumsden, Knight, & Daveson, 2015)

While Australia does not fall on the One Belt One Road map, it nonetheless presents Georgiou Group
company has the opportunity to gain from the spreading of economic development. (Lumsden,
Knight, & Daveson, 2015)

China clearly understands the benefits that the Australian services sector has to offer China under
ChAFTA (The China Australia Free Trade Agreement). (Lumsden, Knight, & Daveson, 2015)

Acquisition is not the only option for China in securing the skills of Australian construction firms.
The One Belt One Road Initiative, together with ChAFTA presents, opportunities for Australian
companies to joint venture with Chinese companies in providing construction services
(Lumsden, Knight, & Daveson, 2015)

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8. Disadvantages of One Belt One Road for
Georgiou Group Australia
Interconnectivity and Credit Risk
Chinese companies operating abroad will face a series of challenges consequent to the enactment of
this initiative. Firstly, as companies expand their global operations, there would be a rise in the risk of
disruption in a particular country. This may affect the quality control or working capital issues. Credit
risk would be the next concern as foreign customers may operate on different credit and payment
terms. Chinese companies would then have to insure against such credit risks and counterparty
defaults, participating in insurance programmes. (BDO Advisory Pte Ltd, 2015)

Political Risk
With the increase in cross-border activities, there will be a rise in political uncertainty, relating to
trade embargos, infrastructure impediment and corruption, especially amongst the developing nations.
Countries along the Belt and Road would then have to consciously work together to prevent such risks
and organize a well-planned insurance program. (BDO Advisory Pte Ltd, 2015)

Social Implications
As China shifts its overcapacity to the countries along the Belt and Road, there would be a reduction
in jobs, and the closing down of plants and factories in affected countries. This might lead to social
implications amongst the large proportion of people in export related industries. The China Labor
Bulletin reported earlier in 2015 that worker strikes and labour unrest in China increased significantly
in 2014 as compared to the previous year, with the increase linked to the economic slowdown.
(BDO Advisory Pte Ltd, 2015)

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9. Recommendations for BRI Market Entry

1 Know your Market: First of all perform a market research internally and externally of the focus
sector.
Timing: identify the perfect time to enter the Chinese market?
Market structure: who are the stakeholders (customers/ competitors/ intermediaries)
Price levels: how are the tenders formulated.
Evolution: the market evolvement coming in the future years.
Government and social environment: present and future changes which will impact on the
market. And out line the business model that will explain the strategy.
2 Define your Business Model: Second step is to define the business model, where as the
organizations should explore ideas that differ from their domestic model. Considering the following
criteria
The product does my product or service differentiates from other similar products?
Price does my price match for the product or service that I offer?
Customers how can I reach my target customers?
Partner is a partner local partner? What kind of distributor or partner do I need? What would
be their ideal profile? What are this partners interests in the venture?
Structure should I make use of my workforce or can I use another organization do I need my
own people on the ground or can I use other organizations to represent my company?
Growth if it's the case that the business is growing successfully, what to do next.
Plan B other alternatives if the approach doesn't work (EU SME CENTER, 2015)
3 Looking for a Partner: Doing your homework make you identify the market and the role of the
partner should become clear to start discussions with selected partner or supplier:
identify your partners strengths and weaknesses.
identify goals and objectives;
identify interests.

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3.1 The Search for a Distributor/Partner: Going to trade fairs is a substantial best approach to
attract business partners, and recommended. The manifestation of the booths, those standards of
presentations, and communication skills will all help o present the good first impression. However,
these impressions can misdirect, dont neglect those need about getting should know your accomplice
alternately leading fundamental due diligence. (EU SME CENTER, 2015)
4 Characteristics of the Construction Sector: Should be obvious there would a few disasters and
risks when it come to the construction sector. Chinese partners may not practice the western codes of
direct. Accomplices don't fundamentally take after those Western methods of doing business. This
issue needs should be plainly tended throughout partnership negotiations. An impartial source data on
the partner is determinedly proposed clinched alongside whatever case, to guarantee a full
understanding of the condition. (EU SME CENTER, 2015).
5 Implementation and Follow-up: It includes setting dependent upon reporting weight systems,
seeing how those accomplice works, negotiating issues that need not been elucidated beforehand,
negotiating issues, training, get ready advertising materials, checking translations, Furthermore setting
limits around the thing that can be make sold also what can't. Experiences with accomplices in
different nations will absolutely assistance for actualizing those organizations. Transitory supporting
to this period might additionally make tried from consultancies. (EU SME CENTER, 2015).
6. Due to political instability in certain countries, Chinese joint venture Australian companies must
consider whether there will be significant changes in foreign investment policies or industry entry
requirements there if the ruling government changes.
7. Be comfortable dealing with officials You will Figure yourself working nearly for
legislature officials, Also you might face a considerable measure of formality when applying to
permits and approvals. You could start finishing benefits of the business sooner Toward
guaranteeing that you bring a robust understanding from claiming whats needed. (ANZ
Busines, 2017)
8.Partnerships are key: each entrepreneur in china runs their business clinched alongside close
affiliation to know their stakeholders. These incorporate partners, suppliers, government, he
community and backers. It is an essential factor that you ensure that all parties are included in a major
gathering (ANZ Busines, 2017)

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10. Conclusion

In conclusion, belt and road initiative might brings more venture opportunities to Chinese to extend
there business to overseas, and also to provide benefits to those nations. The belt and road where it is a
great opportunity provider for many surrounding countries in terms of construction and agriculture
etc. (BDO Advisory Pte Ltd, 2015) However, such chances might achieve alongside with risks and
challengers confronted eventually faced by significant parties. The thing that it important is that for
china, with have those accurate governance also schema should help these organizations and nations
explore through the uneven worldwide landscape.

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11. References
o Ahmad, R., & Mi, H. (2017). China-Pakistan Economic Corridor and Its Social Implication
on Pakistan: How Will CPEC Boost Pakistan s Infrastructures and Overcome the
Challenges? Arts and Social Sciences Journal , 8 (2), 1.

o Amighini, A. (2017). China's Belt and Road; a Game changer? Milano, Italy: ISPI.

o ANZ Busines. (2017). Challenges of doing business in China. Retrieved 8 22, 2017, from
ANZ Business: http://www.anzbusiness.com/

o BDO Advisory Pte Ltd. (2015). One belt ,one Road. Merchant Road: BDO Advisory Pte Ltd.

o Commisceo Global Consultancy. (n.d.). China Guide. Retrieved 8 20, 2017, from
Commisceo Global: http://www.commisceo-global.com/

o EU SME CENTER. (2015). The constructions sector in china. Beijing: EU SME Center.

o Henny, S., & Kiran, S. (2017, 05 12). China takes project of the century to Pakistan.
Financial Times . Karachi, India.

o Lumsden, A., Knight, L., & Daveson, S. (2015, 2015 20). CHINAS ONE BELT ONE ROAD - A
NEW OPPORTUNITY FOR AUSTRALIAN EXPERTISE. Retrieved 8 22, 2017, from Corrs
Chambers Westgarth: http://www.corrs.com.au/

o Ministry of Communications Government of Pakistan. (2009). Private sector participation


inn national highways motorways tunnels and bridges in pakistan. Ministry of
Communications Government of Pakistan, National Highway Authority, Mauve Area.

o Scott, S. (2017, 04 27). Guanxi: How Business Is Done in China. Retrieved 08 22, 2017,
from Stratfor Worldwide: worldview.stratfor.com

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