Enterprises charter the maritime silk route

Chinese enterprises wanting to capitalize on opportunities afforded by the Maritime Silk Route (MSR) have had a rocky start to the new year.

The new Greek government reviewed the sale of a majority stake in the port of Piraeus to China's COSCO Group last month, while an exhibition center project in Mexico backed by Chinese investment was halted.

Chinese enterprises eyeing overseas expansion are concerned that these developments may be signs of things to come.

Despite this, it is not all bad news. Another Chinese enterprise, China Communications Construction Co. Ltd, managed to secure a 1.4 billion U.S. dollar port city project in Sri Lanka's capital Colombo a few days ago after the government threatened cancellation.

SMOOTH SAILING

Companies will be key to ensuring interconnectivity among the countries along the route, said Sameh El-Shahat, CEO of China-i Ltd., a risk management and public diplomacy advisory firm, at an international seminar on the development of the 21st Century Marine Silk Route in southeastern Quanzhou City, where the route will start.

However, are Chinese firms ready to sail through the route's unchartered business waters?

They need to be prepared for more than financial or operational challenges, as social acceptance will be paramount to success, Sameh said.

Unstable investment environment; a lack of sufficient research; inefficient business partners; exclusive competition; and trade and investment barriers will be major hurdles in the key trade and investment destinations along the maritime route, said Xu Ningning, executive president of the China-ASEAN business council.

TIDE IT OVER

When talking about the Colombo project, Zhang Baozhong, executive president of the overseas business department of China Communications Construction Co. Ltd. emphasized that mutual growth and prosperity were integral principles in any overseas project.

It is estimated that the port city program will create 83,000 jobs and 13 billion U.S. dollars of foreign direct investment over the next decade.

China's State Council on Wednesday urged all sectors to improve product and service quality to earn international recognition, which would aid Chinese firms in their quest to "go global".

"The approval of our project is a result of our strict adherence to legal, environmental, social and financial [regulations] to demonstrate feasibility and credibility regardless of the relationship with the local government," Zhang said.

"We are not doing business with government officials, but doing good for society," Zhang added.