The Global Advisory Council appointed by CMIG. Concerning his new role, Mr. Prodi believes the Global Advisory Council is of great importance to CMIG’s overseas arrangements. In his opinion, the job of the Council is not making decisions, but instead, providing consultation services. As a result, Council members should express their convictions and voice their insightful suggestions in the most open and free way, as well as in a constructive manner.
At the beginning of this year, Mr. Prodi expressed his opinion on Chinese enterprises during an address he made at the CMIG Global Advisory Council meeting. He said given that the development of Chinese enterprises was currently at a historical juncture, their globalization has become an inevitable step. The establishment of CMIG is well-timed. As the first strategic tool of China, CMIG is bound to become a large-scale enterprise that can truly represent China’s economic strength on the global stage.
Mr. Prodi proposed that CMIG can directly utilize the huge private capital conglomeration, (i.e. the capital accumulated by Chinese private sectors during the past several decades) and bring the strength of the private capital to a new era. "This act is a full response to the call from the Chinese government that China will be more open to the world. A specific and clear goal is to establish the Silk Road Economic Belt and the 21st Century Maritime Silk Road ‘(One Belt One Road)’."
As a representative of Chinese private capital, CMIG has been making frequent movements overseas recently and making investment arrangements for the global market. For example, CMIG has established its regional headquarters in Singapore and Hong Kong by planning the "One Belt One Road" industrial park in Indonesia in March, and by establishing the "CMISIM European Investment Fund" on 15 June 2015 in London.
During the interview, Mr. Prodi expressed his opinion on the vision laid out by CMIG. He said that CMIG’s latest arrangements are becoming more and more international, and they have always followed the strategy of "Going Global". "Choosing Europe as the first stop of its overseas arrangements is a good decision, since Europe is still the world largest manufacturer and a huge import & export platform with abundant exciting investment opportunities," as he put it.
However, he also expressed concerns about the Greek debt crisis, or in his words, "Although Greece is not a major economy given that its GDP accounts for only 2% of the total GDP of Europe, the Greek debt crisis can still negatively affect the European economy." He hopes that an economic or political consensus among European countries can be quickly reached to solve the Greek debt crisis.
In Mr. Prodi’s opinion, Chinese investments in Europe won’t be hit hard by the Greek debt crisis, given the bullish European economic prediction on the whole. Also, it is also normal for the European economy to experience some short-term fluctuations.
Opportunity presented to the private capital by the "One Belt One Road" initiative
Mr. Prodi is committed to the development of the Sino-EU relationship. After he had assumed his post as the President of the European Commission, he came to China to attend the EU-China Summit in 1999, 2000 and 2003.
The "One Belt One Road" strategy proposed by the Chinese government in 2014 has changed the development of the economic ties between China and Europe. Mr. Prodi suggested that this enormous project is a highlight among all Chinese policies in recent years, since this initiative not only serves as a power that can balance the Trans-Pacific Partnership Agreement (TPP) proposed by the US, but it also enhances China’s influence and exports to the international community.
The "One Belt One Road" project initiated by China is not China’s project, but will gradually become a global project that reaches out to 40% of the world population. It is bound to make China a financial, economic and political leader around the globe. "We desperately need cooperation between these two major powers. Only this kind of cooperation can stop international terrorism from spreading," said Mr. Prodi.
Mr. Prodi also pointed out that the ‘One Belt One Road’ strategy creates a win-win situation for China and Europe thanks to the time-honored import & export trade between China and Europe, and the political and economic stability of Europe. Despite the Greek debt crisis, China and Europe still have sound political and economic interactions. In fact, Europe has taken proactive steps to respond to the ‘One Belt One Road’ initiative, not only in a symbolic way, but as a message to stress the necessity of further industrial integration between China and Europe.
However, Mr. Prodi alerted about the political risks, which could detriment the entire initiative if not handled appropriately. The success of this project is not only dependent on each Asian country along the "One Belt One Road", but also their interactions. These countries may have good relationships with China, but if their surrounding countries are in bad terms with China, that could make things tricky. The political risks of managing relationships with those countries must be taken into consideration, since trade by land transportation must go through all countries along the economic belt, and failure to maintain positive ties with any one of them could jeopardize the entire intiative.
What opportunities can the "One Belt One Road" strategy bring to Chinese private capital? According to Mr. Prodi, China and Europe has the world largest bilateral trade volume now, which has even exceeded that between China and the US, and it is still growing. Diversity among European countries provides a wonderful opportunity for Chinese investment. Diversity shown by different European countries and regions in such areas as infrastructure can meet and adapt to Chinese enterprises’ diversity and needs well. It is also a good chance for the project to contribute to the Sino- European relationship in the future.
Chinese private capital must learn to utilize such diversity.
Mr. Prodi also pointed out that Chinese enterprises must invest with political skills when they are following the call of the "One Belt One Road" national strategy, because only in doing so can they bring about more profits, avoid some security risks, and be more cautious about their investment decisions.
Romano Prodi is an Italian politician and statesman.
He served as the Prime Minister of Italy, from 17 May 1996 to 21 October 1998 and from 17 May 2006 to 8 May 2008. He was also the tenth President of the European Commission from 1999 to 2004. At present, Professor Prodi serves as the Chairman of the Foundation for Global Partnership and the Chairman of the United Nations - African Union peacekeeping senior experts group. Since March 2010, he has been a professor of China Europe International Business School.
Prodi is also a member of the CMIG's Global Advisory Council.