Source: China Daily Published: 2017-6-30
Companies that invest in countries involved in the Belt and Road Initiative should build risk evaluation systems and understand the differences between countries before investment, said He Yafei, former vice-minister of foreign affairs.
"Cultural differences bring risks, so companies should communicate with the local people to learn more about their cultures and win people`s support," He said on the sidelines of the first summit of the Silk Road International Association, held in Hangzhou, Zhejiang province.
He Yafei, former vice-minister of foreign affairs, encourages the new generation to gain international perspective and gain skills to seize the opportunity. Provided to China Daily
SRIA, an independent international think tank started by the International Finance Forum, was established on June 17.More than 50 financial and political leaders around the world have joined the association to share their experience, aiming to help achieve the Belt and Road goals.
Chinese enterprises have invested more than $51.1 billion (45.7 billion euros; ￡40.1 billion) in countries participating in the Belt and Road Initiative since it was proposed by President Xi Jinping in 2013. The total amount in trade with those countries exceeded $1 trillion last year, accounting for nearly one-third of the total foreign trade volume of China, according to the International Finance Forum.
"It`s for sure that in the era of Belt and Road, more people with abilities are needed, which provides an opportunity for individuals at home and abroad," said He, encouraging the new generation to gain international perspective and gain skills to seize the opportunity.
During the summit, experts agreed that the initiative brings great potential, but they also urged Chinese companies to study the investment risks.
"The Belt and Road runs through Europe and Africa, connecting dynamic East Asia economic entities with developed economic entities in Europe, which means great economic potential," said Zhou Yanli, vice-chairman of the China Insurance Regulatory Commission.
However, companies should be aware when investing in Belt and Road countries that risks exist due to countries` different political, economic, cultural, social and legal environments, according to Zhou Hanmin, IFF board member and vice-chairman of the Shanghai committee of the Chinese People`s Political Consultative Conference.
"Some countries don`t have clear regulations on nationalization of international investments. Some countries haven`t made the necessary adjustments in economic structures, as they have yet to revive from the world`s financial crisis in 2008," Zhou says.
In 2016, China`s foreign investment reached $183 billion, with a growth rate of 44.1 percent, ranking second in the world.
He Yafei is a senior fellow of Chongyang Institute for Financial Studies, Renmin University of China.