Source: Global Times    Published: 2015-10-26

The "One Belt, One Road" (B&R) initiative proposed by China was on the lips of executives, scholars, think tank researchers and government officials from European and Central Asian countries at the Fourth Eurasian Forum held on Thursday in Verona, Italy.

Often simply calling the initiative the "Silk Road," speakers at the forum concluded that opportunities are emerging in the eastern part of the Eurasian continent, and they stressed the importance of watching these new areas of growth to prop up Europe`s slack economy.

Formally called the Silk Road Economic Belt and the 21st Century Maritime Silk Road, the B&R initiative is a massive development plan aimed at boosting connectivity via infrastructure investment such as the construction of railways, roads and ports and cultural and economic exchanges along the routes.

Gian Maria Gros-Pietro, chairman of the management board at Italian banking group Intesa Sanpaolo, noted that China has the largest population in the world and its economy is growing and undergoing structural improvement.

"The quality of demand from China, both in terms of consumption and investment items, is increasing, so there is space for cooperation for Italian firms, both in terms of producing in Italy and selling in China and producing in China and selling in Europe," Gros-Pietro told the Global Times Thursday on the sidelines of the forum.

Gros-Pietro said Intesa Sanpaolo had already established offices in Shanghai, Hong Kong and Beijing and plans to increase its presence to seize growing opportunities in China.

"In this new `Silk Road`, China wants to spend, consume and cooperate," Ge Ming, an independent director with Ping An Insurance (Group) Co of China, said during his speech at the conference Thursday. Ge noted that Italian companies can gain market access in China by cooperation with Chinese counterparts.

More Chinese companies are beginning to leverage professional services, such as those offered by overseas Chinese communities, foreign accounting firms and law firms, to get deals done, Ge noted.

China reported third-quarter GDP growth of 6.9 percent on October 19, the lowest figure in almost 25 years.

"GDP growth in Italy is below 1 percent and China`s near 7 percent growth rate is (many times) higher. I don`t think the slowing down of the Chinese economy will cause a big slowdown in exports of Italian tool machines," Enrico Annacondia, a manager at UCIMU-Sistemi per produrre, told the Global Times Thursday.

"The huge size of the Chinese market also makes selling goods easier," said Annacondia, who is a manager of the Italian association that represents manufacturers of machine tools, robots and automation systems.

The need to acquire more advanced technology, gain market access and cope with a weakening euro have led to more and more cross-border deals between firms in China and Italy.

For example, Shanghai Electric Group Co, which makes mechanical and electrical equipment, completed the purchase of a 40 percent stake in Genoa-based Italian gas turbine maker Ansaldo Energia in December 2014.

And on November 27, 2014, State Grid Corp of China completed its 2.1 billion euro ($2.32 billion) purchase of a 35 percent stake in a vehicle under Italian state lender Cassa Depositi e Prestiti that controls Italy`s energy grids.

In July this year, China National Chemical Corp (ChemChina) secured EU antitrust approval for its 7.1 billion euro bid for Italian tire maker Pirelli, a supplier for Ferrari. The deal came as Pirelli`s rivals, tire producer Michelin SCA and vehicle parts supplier Continental AG, were also scouting for growth opportunities in Asia.

Igor Sechin, chairman of the management board of Russian oil giant Rosneft OAO, said the partnership of Rosneft, Pirelli and ChemChina was an example of integral cooperation in Eurasia. Rosneft is a shareholder of Pirelli.

"The Pirelli (deal) demonstrated a model approach to risk minimization and the use of synergy potential of Eurasian cooperation. What happened is actually a large-scale launch of European tire technologies in the largest Asia-Pacific markets with the use of the resource potential of Russia and financial capability of China," Sechin was quoted as saying in a press release e-mailed to the Global Times on Friday.

In terms of primary energy consumption, Asia`s share has been expanding at the expense of Europe since 1990, Sechin noted.

John Zhang, secretary-general of the Beijing-based International Technology Transfer Network, said that in the Southeast and South Asian markets, cooperation takes the form of Chinese companies exporting whole sets of equipment, such as high-speed railway systems. In Europe, the cooperation methods are different with technology transfer coming into play.

"European countries have great technologies, but they often face a saturated market. China`s market offers significant growth potential," Zhang told the Global Times Thursday. "In China, the technology of European firms can be converted into products and get into the market faster."  

Zhang said the sixth Italy-China innovation forum, to be held this November, will have a venue in Southwest China`s Chongqing Municipality, due to the growing success of a 10,000 kilometer railway linking Chongqing, Northwest China`s Xinjiang Uygur Autonomous Region and Europe. The venue will provide a chance to discuss more opportunities in manufacturing sectors.

Several other Chinese cities, including Yiwu in East China`s Zhejiang Province and Harbin in Northeast China`s Heilongjiang Province, have launched similar international freight train services to Europe.

"Wisdom from both sides and global coordination are both needed to tackle the issue of trade imbalances along those railways," Zhang said, noting that an increasing number of Chinese stakeholders in Italian firms could help address the bilateral trade imbalances.