China's Belt and Road Initiative brings opportunities and challenges to UK construction
The construction community and policymakers need to understand the opportunities and challenges which will arise from the largest infrastructure project the world has ever seen, argues Eddie Hughes MP.
A brand new study, launched earlier this week in Beijing, from global economic consultants Cebr and sponsored by the Chartered Institute of Building (CIOB), provides a comprehensive and detailed look at the global economic impact of China’s Belt and Road Initiative (BRI). The study, out now in a report entitled From Silk Road to Silicon Road, How the Belt and Road Initiative Will Transform the Global Economy, lays out the likely impact on the global economy, on the economy of each region and on more than 20 leading economies.
The BRI is regarded as the centrepiece of China’s international economic policy and is the world’s largest infrastructure project, attempting to rebuild and expand the old Silk Road between Europe and China.
The UK is forecast to be among the top 10 beneficiaries of the project, sitting seventh in the table of nations that will see the largest economic impact.
Among the other headlines in the new report:
- In terms of macroeconomic benefit, the UK is the largest projected beneficiary of the BRI in Europe (more than twice the projected benefit toward Germany, and more than three times that of France).
- Regarding microeconomic benefit, while there are currently no identified projects planned for the UK (despite the ongoing debate around the proposed Huawei deal and 5G infrastructure), there are significant opportunities for British firms to play a part in the BRI and take a share in the economic benefits. For example, there are major advantages for China to partner with regionally based construction professionals such as engineering consultants, project managers, and other professionals who are familiar with European and international design standards. UK firms have the expertise in these areas that China needs and is looking to deploy.
- The BRI is likely to boost world GDP by 2040 by US$7.1 trillion per annum. This raises world GDP by 4.2% of likely GDP in 2040 (or 8.3% of GDP in 2019).
- GDP is likely to be boosted in Western Europe by 5%.
- It is also entirely possible that it will result in very significant investment, in the longer-term, in upgraded infrastructure for road, rail and ferry routes along the east cost of the UK. The BRI includes plans to reach Rotterdam, Europe’s largest port, and enhance links between north-western continental Europe, Scandinavia and the UK. An understanding of the plans as they develop will be critical for both government and industry in making the case for UK expertise to be deployed and play a part in the development of the projects being discussed, and the return this could generate.
The CIOB’s President, Chris Soffe FCIOB, has said: “This report is a fascinating look at plans to build what is effectively a road halfway round the world, with impact way beyond its boundaries. The Belt and Road initiative is the most significant global infrastructure initiative ever seen. Looking at the potential outcomes for the global economy and the opportunities for our industry - and the future of our industry - is something we should all be interested in.”
We have the opportunity to showcase the very best that the UK construction industry has to offer and to influence international construction and development, while at the same time delivering opportunities to participate in European and national projects which will have an impact on the way we travel and trade for generations to come. The BRI can give the UK a significant competitive advantage at this critical time of preparing to leave the European Union.
But in order to raise the profile of the need for engagement in this project at an early stage, I want to see policymakers, parliamentarians, and business leaders – those who should understand the importance of the construction industry – to support UK construction, moving built environment issues higher up the policy agenda to place us in a position to turn this huge opportunity into reality.
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