Opening the first ever Asian focused seminar at Nor-Shipping on Wednesday the chairman of BW Group Andreas Sohmen-Pao set the tone, giving the audience an insight into how China continues to drive the market for many years to come pushed by the 21st-century updated version of the Silk Road, better known as the One Belt, One Road (OBOR) initiative.
The OBOR policy, as laid out by Chinese president Xi Jinping, is set to redefine trade patterns between Asia and Europe with enormous impact on the maritime sector.
The Asian Development Bank estimates that Asia needs to spend $26trn in infrastructure by 2030 if it wants to reduce its shortage of ports, railways, power stations and roads.
Sohmen-Pao made three quick points on how OBOR and shipping are intertwined. Shipping depends on the world economy, the world economy depends on China and China depends on OBOR to succeed, Sohmen-Pao said, pointing out that China now accounts for 30% of world trade growth.
Sohmen-Pao went on to explain that OBOR covers an area that constitutes two thirds of the world’s population and around one third of world GDP.
The BW chairman said that in the last two years China had signed 26 trade agreements, creating 56 new economic trading zones in 21 nations, figures he said were likely to double within a couple of years.
Sohmen-Pao quoted a former EU diplomat in China who maintained that for Beijing OBOR was a domestic policy with geopolitical consequences rather than a foreign policy. China must handle overcapacity in many sectors, he said, and when it shifts to be a service economy it needs international outlets to ship its materials, goods and engineering capacity and services out of the country.
Sohmen-Pao was adamant that for the shipping community the OBOR policy was an enormous opportunity.
“We should wish them luck,” Sohmen-Pao concluded.