8 risks to the Silk Road Fund
- By Wang Tianling
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E-mail China.org.cn, November 24, 2014
We must enhance analysis and prediction of the political and economic situations in major projects' host countries. A method should also be put in place to raise funds and run projects in case of sudden changes brought on by political shifts.
Third, China should avoid the risks of political turbulence in some particular regions.
The turbulence caused by competition between big powers always leads to economic losses for enterprises. For example, many transnational enterprises, including Chinese ones, suffered great losses during the United States' invasion of Iraq in 2003.
Over the next few years, political turbulence is highly likely to occur in the Middle East, Southeast Asia, Eastern Europe and Northeast Asia, posing a great challenge to the Belt and Road strategy.
Fourth, China should avoid the risks posed by terrorism, which will present a major threat to Chinese enterprises operating overseas.
Chinese enterprises have already become targets for many local terrorist groups. For example, in 2004, 11 Chinese railway workers were killed by terrorists in Had Bakhshi, Afghanistan. In 2007, nine Chinese oilfield workers were killed by terrorists in the Ogaden region of Ethiopia.
China's promotion of the Belt and Road strategy will inevitably harm the interests of some foreign and local interest groups. In order to minimize the risks of terrorist attacks on Chinese enterprises, we must therefore enhance intergovernmental cooperation to combat terrorism, strengthen Chinese workers' understanding of terrorism and how to combat it, take precautions that align with common international practice and develop sound emergency plans.
Fifth, China must avoid risks brought about by an unwise choice of foreign partners.
Previous experiences have shown that choosing foreign partners is one of the most important decisions to make when initiating a project, yet it is often the most difficult decision. The recent setback suffered by a Chinese enterprise bidding for a high speed railway project in Mexico was due to one of its Mexican partners being sued, and the event triggered a domestic political storm.
Such problems can be solved by communication and cooperation between Chinese and foreign governments and between trade unions and industrial associations, as well as through aid from professional consulting firms.
Sixth, China must avoid the risks of economic nationalism.
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