Belt and Road Initiative – Collaboration for Success

This paper employs the gravity model to investigate how the growth of China’s textile and clothing (T&C) exports is dominating the exports of other Asian developing countries over the 1990–2015 period. Aggregate analyses were undertaken, and the endogeneity of Chinese exports were accounted by applying instrumental variables with country fixed effects. It was found that there was a negative impact of China’s emergence on T&C exports on other Asian developing countries. We further explored whether such displacement effect varies across Asian countries and the results showed that a more pronounced effect was found in low-income countries than high-income ones. Our findings suggest that the export competitiveness of China’s neighbors, i.e. both more and less developed Asian countries, are affected by the emergence of China in T&C Trade. However, China’s Belt and Road Initiative (BRI) warrants further research to suggest that once the Initiative goes into full force, collaborative opportunities are available between China and other Asian developing counties. The implications of China’s BRI are also discussed.

Is Hong Kong best suited for the “super-connector” role in the Belt and Road Initiative (BRI), forging stronger links among partnering countries to deepen multilateral economic cooperation? Taking clothing industry as a case in point, this study examines how Hong Kong can play that role by leveraging its strengths to enhance sustainable clothing trade and economic development of some Belt and Road (B&R) countries in Asia. This study applies an extended gravity model to analyse clothing exports from Bangladesh, Cambodia, India, Indonesia, Malaysia, Pakistan, the Philippines, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam to Hong Kong from 2000 to 2017. The panel data regression result shows that among the 11 factors examined in the model, logistics performance of exporting countries is the most influential predictor of bilateral clothing trade, whereas wages and supply of female labour have relatively lower predictive power than the value-adding factor. Serving as middlemen connecting developing countries to global clothing markets, Hong Kong clothing companies would benefit from investing in the B&R countries, transferring technology to them and trading with them. Through better coordination of production and export logistics and provision of high value-added services such as new product and process development for clothing supply chains, Hong Kong companies could contribute to the sustainable development of B&R economies.

The Belt and Road Initiative is a very ambitious project started by the Chinese Government with a partnership of 152 countries. The countries associated with the project are benefited at various levels with lots of challenges in terms of funds. The present study selected a sample of five countries in Asia associated with the project and has strategic importance. Five countries such as China, Taiwan, South Korea, Japan and Hong Kong were considered as samples for collection of data on perceived opportunities, perceived capabilities, fear of failure and entrepreneurial intentions after the year 2013, when The Belt & Road Initiative was announced. The results indicate that perceived opportunities and perceived capabilities affect entrepreneurial intentions positively, whereas fear of failure affects entrepreneurial intentions negatively.

The global supply chains in the Textile and Clothing (T&C) industry have been shaped by various forces, among them the economic development policy is one of the strongest. Amid the rollout of the Chinese’s new national development strategy—the Belt and Road Initiative (BRI), major T&C companies see both opportunities and challenges in optimizing and restructuring the networks of their production facilities. One notable and growing trend associated with the BRI is the relocation of T&C manufacturing from China to ASEAN countries and the establishment of new factories along the Belt and Road (B&R). Much has been examined about the BRI at the national level, yet little is known about how companies in the T&C industry have responded to this grand economic development plan. This study aims to explore from industrial stakeholders’ perspectives, the factors that drive and hinder synergistic, mutually beneficial development of T&C production and trade among the B&R countries. To achieve this aim, it addresses the following questions: what are the challenges and opportunities faced by T&C companies establishing or relocating production to B&R countries, and what tangible actions have been taken by them? In-depth interviews were carried out with ten industry professionals from Hong Kong-based companies and government institutions involved with T&C trade in the Asian B&R countries, such as Bangladesh, Cambodia, Indonesia and Myanmar. The findings of this study highlight the importance of pursuing sustainable development. On one hand, there is full of potential for T&C companies to achieve cost-effective production along the B&R countries through harnessing economic policy and transport infrastructure that facilitate trade. On the other hand, T&C companies see challenges in managing culturally diversity in the workplace as opportunities for pursuing corporate development in a socially responsible manner. In sum, this study reveals mutual supportiveness of economic and social aspects of T&C production and trade.

Belt and Road (B&R) is an ambitious collaborative infrastructure development initiative launched by the Chinese government in 2013, covering over 60 countries with about two-third of world population and one-third of global GDP at the time, which has now extended to over 100 countries. This makes it an unprecedented plan for long-term economic growth with a lasting impact on the fortunes of the individual partner countries and the global economy as a whole. The overall time-scale for the project has been set at roughly 35 years and the total investment value in excess of US$10 trillion. The B&R initiative aims to build a shared cross-border infrastructure to facilitate foreign policy through economic cooperation and minimization of any conflict risk. However, B&R involves significantly weaker cross-border integration than an economic union like European Union by focusing on creating shared transport links among the partner countries and China but not doing anything with the production infrastructure in each country. The public response to B&R has been rather mixed across the various partner countries because people are still not sure about how this would benefit or harm their individual and national interests. In view of the uncertainty about the potential outcomes of a huge initiative like B&R, we aim to explore how it is perceived by the managers in both China and all the B&R partner countries. In this chapter, we aim to explore the nature and extent of ‘B&R-Readiness’, which we define as the ability of the managers working in China and B&R partner countries, to meaningfully engage with each other in order to face the challenges and tap the opportunities offered by the B&R initiative. Next, we introduce a self-administered structured questionnaire to help these managers and their employers to assess their level of B&R-Readiness. We also explore the impact of psychic distance (differences in cultural values and business practices) and cultural familiarity between managers in China and the B&R countries. Finally, we identify and discuss the ways in which Hong Kong government and businesses can play a strategic role to prepare the managers in China and the B&R countries to be B&R-ready.

Belt and road initiative (BRI) is considered one of the most important global development strategies ever made by the Chinese government. It is estimated that the worth of the belt and road is around USD 1 trillion comprised of approximately 1700 different projects. It has been stated that China is the biggest beneficiary of this initiative. This chapter is unique in the sense that it unpacks the fundamental reasons behind this potential series of projects from the economic, social and political perspectives of China only. It examines as to how China will be benefited from this initiative specially in the terms of business of its textile and clothing industries. Also, it explores the various opportunities that the country can utilize with the help of one belt and road initiative. However, with a global acclaim on one side, the belt and road initiative has been panned by the opponents who have expressed concerns about the expected problems for China while carrying out this massive initiative. This discussion and opinion based chapter examines these challenges and issues which can jeopardize situation of China and the collaborating nations and then relevant recommendations for policy makers and future researchers are made.