On July 26, The People’s Daily hosted the 2016 “One Belt, One Road” Regional Cooperation Summit in Beijing, where Chairman Wang Jianlin delivered a speech.
Wanda Group’s Chairman Wang laid out Wanda’s practices, discussing the entrepreneurial opportunities of the “One Belt, One Road” initiative. The Chairman pointed out that within the initiative’s framework, there is opportunity for China’s enterprises to innovate, to grasp the individual characteristics of the participating nations and to seek development opportunities within the services and infrastructure sectors.
The Chairman’s speech is as follows:
The Business Opportunities of “One Belt, One Road”
The People’s Daily came up with the topic, calling on me to speak on the opportunities for business strategies of the “One Belt, One Road.” This topic is rather large, so I wanted to combine Wanda’s practice and simply discuss a few points from my own views on “One Belt, One Road.”
“One Belt, One Road” is one of President Xi Jinping’s critical national policies. It is our country’s political, diplomatic and economic initiative, encompassing the nation’s overall strategy. I think this is also a guiding philosophy for Chinese enterprises’ multinational expansion. Under the “One Belt, One Road” framework, there are vast development opportunities for Chinese companies. I’ll focus on the three main ones:
1. Opportunities are within innovative thinking
For “One Belt, One Road” multinational development, companies firstly must follow specific conditions of partner countries and integrate their own national characteristics, generally adopting a uniform policy for each country, each city or each municipality. We cannot copy and apply our own existing, ready-made business practices.
We’ll use Wanda’s investment in India as an example. I traveled to India one time per year for five years. At the time, I thought, India is the world’s second most populous country with a rapidly growing economy and we think that India will be the next China. There are vast market opportunities, so we should treat this as a focal point of investment. After going, Wanda followed business models for a mature Chinese domestic market, aiming to open a Wanda Plaza, with the thinking that if China could open a few hundred Wanda Plazas in China, it could open 100 in India. So we followed this idea for our India projects and set up an India division, having endless discussions, and the final result in that five years was that we did not carry out a single project.
Where did problems emerge? It’s extremely difficult to find space in India’s urban areas. There’s space in the suburbs, but there’s a serious problem in lacking infrastructure. This put limitations on our ideas, leaving no way to implement them. Workers thought it over and over and finally they came up with a new idea that would integrate the reality of India’s land scarcity and lacking infrastructure into a modern Chinese model along the outskirts of a new development zone. As soon as the concept changed, the opportunity came. Through nearly two years of negotiations with India’s Haryana, the two sides reached consensus. The location is India’s equivalent of China’s Hebei province. India’s Delhi and Beijing are different, with Beijing having more than 10,000 square kilometers, while Delhi is very small, having probably no more than 300 square kilometers. Next to Delhi, in a very good location, we signed a 30 square kilometer new district, with a first stage of almost 12 kilometers, that will have the name Wanda New City.
India is currently facing a...
On July 26, The People’s Daily hosted the 2016 “One Belt, One Road” Regional Cooperation Summit in Beijing, where Chairman Wang Jianlin delivered a speech.
Wanda Group’s Chairman Wang laid out Wanda’s practices, discussing the entrepreneurial opportunities of the “One Belt, One Road” initiative. The Chairman pointed out that within the initiative’s framework, there is opportunity for China’s enterprises to innovate, to grasp the individual characteristics of the participating nations and to seek development opportunities within the services and infrastructure sectors.
The Chairman’s speech is as follows:
The Business Opportunities of “One Belt, One Road”
The People’s Daily came up with the topic, calling on me to speak on the opportunities for business strategies of the “One Belt, One Road.” This topic is rather large, so I wanted to combine Wanda’s practice and simply discuss a few points from my own views on “One Belt, One Road.”
“One Belt, One Road” is one of President Xi Jinping’s critical national policies. It is our country’s political, diplomatic and economic initiative, encompassing the nation’s overall strategy. I think this is also a guiding philosophy for Chinese enterprises’ multinational expansion. Under the “One Belt, One Road” framework, there are vast development opportunities for Chinese companies. I’ll focus on the three main ones:
1. Opportunities are within innovative thinking
For “One Belt, One Road” multinational development, companies firstly must follow specific conditions of partner countries and integrate their own national characteristics, generally adopting a uniform policy for each country, each city or each municipality. We cannot copy and apply our own existing, ready-made business practices.
We’ll use Wanda’s investment in India as an example. I traveled to India one time per year for five years. At the time, I thought, India is the world’s second most populous country with a rapidly growing economy and we think that India will be the next China. There are vast market opportunities, so we should treat this as a focal point of investment. After going, Wanda followed business models for a mature Chinese domestic market, aiming to open a Wanda Plaza, with the thinking that if China could open a few hundred Wanda Plazas in China, it could open 100 in India. So we followed this idea for our India projects and set up an India division, having endless discussions, and the final result in that five years was that we did not carry out a single project.
Where did problems emerge? It’s extremely difficult to find space in India’s urban areas. There’s space in the suburbs, but there’s a serious problem in lacking infrastructure. This put limitations on our ideas, leaving no way to implement them. Workers thought it over and over and finally they came up with a new idea that would integrate the reality of India’s land scarcity and lacking infrastructure into a modern Chinese model along the outskirts of a new development zone. As soon as the concept changed, the opportunity came. Through nearly two years of negotiations with India’s Haryana, the two sides reached consensus. The location is India’s equivalent of China’s Hebei province. India’s Delhi and Beijing are different, with Beijing having more than 10,000 square kilometers, while Delhi is very small, having probably no more than 300 square kilometers. Next to Delhi, in a very good location, we signed a 30 square kilometer new district, with a first stage of almost 12 kilometers, that will have the name Wanda New City.
India is currently facing a state of economic scarcity, while China’s manufacturing industry is well developed, with few commodities in shortage. But in India, the situation is the opposite, with housing supply falling short of demand. In the downtowns of Delhi and Bombay, property prices exceed RMB 100,000 per square meter.
In general, the development levels of India mimic the China of two decades ago, with under-established markets and severely insufficient infrastructure. Electricity supply can’t be guaranteed. In Bombay or Delhi, the power may go off during a meeting at a five-star hotel and then resume 10 or 20 seconds later. Why? Every hotel is equipped with an electric generator, as blackouts are frequent. In our projects, we are planning for large tourism facilities. To secure production, three-way electricity is arranged. So we needed to start this project from the very beginning, with electricity, water supply, running water, sewage treatment and telecommunications
The project’s infrastructure requires investment of $2 billion to $3 billion, and the planned investment for the new industry city surpasses $10 billion. This --for years to come--is expected to be the largest signed and binding project in India. The Indian government announced just one month ago that it would accept the project's land proposal, using the so-called Switzerland bid method, but that didn’t solve all the problems in one go. After completing the infrastructure, we’ll be able to acquire the land. When developing large commercial projects in India, like our Wanda Cultural Tourism City, it’s difficult to find even a square kilometer of land and create such a huge project. And this is a large plot of land in which tens of billions of RMB have been invested and diluted on infrastructure, but the land acquisition, support and facility costs have been lower than our expectations.
India’s Prime Minister Modi has proposed to shore up the country’s manufacturing industry. To comply with this initiative, our project is planned to include more than 60% of industrial and manufacturing zones, with the rest for tourism and residential. Considering that the land price is competitive, the Indian government offered many green lights for this project, marking tens of firsts for India. For example, it was the first case in which a foreign enterprise has developed first-tier land.
To conclude, the examples I’ve given of existing success could be applied to companies facing frustration when dealing with various countries in the “One Belt, One Road” initiative. Enterprises must consider local country conditions and local city features, consider specific cases and apply innovative thinking.
2. Opportunity in infrastructure
Most of the countries and regions of "One Belt, One Road", excluding a few developed countries, are less economically developed than China, especially in infrastructure.
China’s success model put infrastructure before economic development. Based on China’s economic level, infrastructure development has been relatively advanced in various aspects, such as high-speed rail, highways and telecommunications facilities. Yet most infrastructure of the countries involved in the “One Belt, One Road” initiative is lagging.
Apart from the afore-mentioned India with its population of over 1.3 billion, Indonesia, another large Asian country with population of over 300 million, has no closed expressway system, only roads running in parallel, with no interchanges. The two countries have no high-speed railways. The main countries of the “One Belt, One Road” initiative include four to five that have a population of more than 100 million, opening tens of billions of RMB in opportunities for infrastructure construction.
Infrastructure is not simply underground projects. It also includes other aspects, such as
