Globalizing China's Economy: OBOR Initiative Benefits and Challenges

1. OBOR and Cultural Exchanges Danyang Xie • Professor of Economics, HKUST • Dean, Economics and Management School of Wuhan University

2. One Belt, One Road An Initiative Proposed by China

3. Global Positioning of the Chinese Economy

4. For developing countries, keep Opening up is a pre-requisite for catching up and sustainable growth • One Belt, One Road is an initiative that contains a set of strategies that counter the increasingly protectionist thinking

5. Catching up is not automatic

6. Opening Up is a pre-requisite Lucas: Trade and Diffusion of the Industrial Revolution, NBER August 2007

7. Benefits of One Belt, One Road • Strengthen connections across countries • Freer movement of goods and talents • Learning more advanced and efficient management know-how • Broader markets for all, which will lead to finer specialization and higher efficiency • Open and fair competition will enhance efficiency • Returns to capital to be improved

8. Challenges of One Belt, One Road • One Road: Oceangoing “21 Century Maritime Silk Road” • Infrastructure: Convention of the High Seas • Freedom of Navigation • High Seas as a public good is well maintained and protected world-wide • One Belt: The land-based “Silk Road Economic Belt” • Infrastructure: to be constructed • Territorial disputes and Religious diversity • Hold-up problems (change of governments) • Rise of China (mistrust from the West)

9. To respond to the challenges • Multiple Belts • North Belt, Central Belt and South Belt • Joint Financing: Asian Infrastructure Investment Bank (expanded to include European countries) • Think outside the box • Need OBOR countries to make institutional arrangements to secure access to the trade routes • Need to improve understanding between people across countries through cultural exchanges in general, and exchanges and collaborations in education of business and laws in particular

10. OBOR and Factor Mobility • OBOR is not just for the liberalization of the flow of goods, services, capital and skilled labor. It should also bring the liberalization of human capital through mutually accepted college and professional training degrees, through joint degree programs, through exchange of students and faculty members

11. OBOR and Cultural Co-existence • The world is often described as confrontational • Clash of Civilizations (Samuel Huntington, 1997) • OBOR aims at Cultural Coexistence • Das zusammenleben der Kulturen: ein Gegenentwurf zu Huntington(Harald Müller, 1998)

12. Exchanges and Collaborations in Education of Business and Law (1) • Hong Kong • A natural stepping-off point for Maritime Silk Road • Hong Kong – Shenzhen cooperation in Qianhai Free Trade Zone which will help attract enterprises from other OBOR countries to Qianhai • Hong Kong University of Science and Technology • In 2013, HKUST Business School and Saudi Aramco Joined Forces to Offer MBA Program in Saudi Arabia • HKUST leadership is thinking about broadening a similar program to other OBOR countries.

13. Exchanges and Collaborations in Education of Business and Law (2) • Wuhan • Hub of China’s High Speed Rail system • It reaches 80% of China’s population within 4-5 hours of high speed travel • “Switzerland in the East” • Number 1 in China (Forbes Talent Index) • 1.2 million college enrollment • Wuhan University: Strong in Business Education (EQUIS) and Law • 1141 International students from 45 OBOR countries • 190 International students in Economics and Management School from 35 OBOR countries such as Kazakhstan, Vietnam, Thailand, Pakistan, Indonesia, Malaysia, Turkey, etc. • Our EMBA programs for example contain courses such as China-Western Culture, Confucianism & Enterprising Spirits, and Arabian Culture and Middle East Issues

14. High Speed Rail Network

15. Remember to Invest in Wuhan …… First Stop for Visitors from Overseas Attraction to Global Talents

16. See you in Wuhan!