EPC companies gather "One Belt and One Road" industrial ecology

The “Source China Global Meeting” 2016 “One Belt and One Road” Leaders Summit was jointly organized by GE and Caixin Media in Beijing. Nearly 1,000 representatives of the Engineering Procurement Construction (EPC) industry at home and abroad have gathered resources for the implementation of technology, policies, services, and engineering projects on a global scale, and built a "Belt and Road" ecosystem to communicate. The conference sub-forum invited a number of industry experts to further discuss and share more specifically the market ecology of Europe, Africa, Middle East and North Africa, Turkey, and the ASEAN region, as well as the implementation of power generation, renewable energy, and oil and gas business.

Sharing economic growth

The “One Belt and One Road” will enable China and countries along the route to share the fruits of economic growth: While upgrading the level of industrial infrastructure in countries along the route, injecting economic growth drivers, and improving the lives of the people along the route, China will also benefit from it, and promote the equipment manufacturing industry to the industrial chain. Upstream upgrades provide the impetus for economic restructuring.

According to statistics, in the first 8 months of this year, China EPC signed nearly 4,000 project contracts in 61 countries along the “Belt and Road” route, amounting to USD 69.82 billion. By 2020, China’s overseas investment along the “Belt and Road” will reach trillions of dollars.

At the meeting, GE Vice Chairman Zhuang Ruisi said: "China's 'One Belt and One Road' initiative has brought real win-win results to the transformation and upgrading of China's manufacturing industry and the economic growth and improvement of people's livelihood in the countries along the route."

At the same time, this initiative has linked the globalization of Chinese companies with the transformation and upgrading of the local equipment manufacturing industry: China became the world's largest exporter of manufacturing in 2009 and currently accounts for nearly one-third of the world's equipment manufacturing output. The “Belt and Road Initiative” has opened up space and opportunities for “Made in China” to enter the international market. With the signing of numerous infrastructure projects along the “Belt and Road” initiative, China’s heavy equipment manufacturing industry will gain important opportunities for upgrading and transformation.

An obvious case is that in recent years, GE has participated in China's EPC projects and the proportion of "Made in China" equipment has continuously increased. For example, GE North Heavy Industries and GE Wuhan Boiler Plant will provide core equipment and assembly services at the first coal-fired power plant in the Middle East in Hassyan - ultra-supercritical will use steam generators and boiler technology. In September 2016, GE and China Power Construction Group Co., Ltd. have won the Kafuxia Hydropower Project under Zambia. The core equipment of the project, five sets of 150MW Francis turbine units and auxiliary equipment, will be produced by GE Tianjin Hydropower Base. Similar cooperation projects are emerging in the Middle East, Africa, and Southeast Asia.

Not only that, the “Belt and Road Initiative” has also provided new opportunities for GE and Chinese partners to jointly develop third-party infrastructure markets.

“GE is active in 60 countries along the Belt and Road. There are dozens of projects in these countries and there are a lot of follow-up projects and opportunities. Many of these opportunities and projects are working with Chinese companies.” Zhuang Ruisi Said that "GE supports China's 'Belt and Road Initiative' and promises to fully invest in technology, services and global resources for this purpose, and become the most powerful partner in the Chinese "Belt and Road Initiative."

Focus on "Belt and Road" Industrial Ecology

Chinese EPC companies need to face fierce international competition and many uncertainties in regional markets along with the “One Belt, One Road” approach, such as geopolitics, corruption, taxation, and regional culture.

In this regard, participants considered that EPC will no longer be the monopolization of a small number of companies. It is necessary to rely on the cooperation model advocated by the “Belt and Road Initiative” to create suppliers, contractors, builders, distributors, and operational maintenance services along the line market. The eco-spheres that the suppliers participate in, such as through the industrial chain, connect with each other and complement each other in their respective fields to achieve a win-win situation.

Xiao Liankui of the Strategic Planning Department of China Export-Import Bank stated that “as the Chinese economy shifts from investment and export-driven to innovation-driven collaboration, the 'One Belt and One Road' will bring new economic development models to China. This initiative will guide China through interoperability. We will grow together with all economies in the world in an open, inclusive, peaceful and mutually beneficial way."

Duan Xiaoyi, Senior Vice President of GE Global and President and CEO of GE China stated: "Successfully winning and implementing overseas infrastructure projects requires Chinese EPC companies to operate on an international platform that spans geographical and cultural boundaries, as well as technology, technology, operations, and talent. The full range of capabilities such as management is an opportunity for Chinese companies to go international, and it is also a catalyst for China's industrial transformation and upgrading."

Delegates said that as a strategic and open regional cooperation initiative, the “Belt and Road Initiative” focuses on multidimensional and broadest cooperation. Various organizations in the region can achieve functional cooperation and institutional cooperation. A variety of cooperation modes. As far as Chinese companies are concerned, based on a series of inter-governmental cooperation, it is obviously the best policy to carry out the “clustered mission” in an orderly manner.