 Welcome to Think Tech on Spectrum OC16, Hawaii's weekly newscast on things that matter to tech and to Hawaii. I'm Lisa Anderson. And I'm Cynthia Sinclair. This week, we'll look at the 2019 U.S.-Hong Kong-China Forum presented by the Hong Kong Business Association of Hawaii at the Lawniakea YWCA. It featured an array of business speakers and panels examining the business climate and prospects in Hong Kong, China and Hawaii. Everyone knows that prosperity is enhanced by trade. This has been proven over the centuries. Trade and the resulting system of globalization has driven innovation, competition and quality, efficiency in markets and the allocation of resources, as well as global governance standards and stability. And it is obvious that how we respond to today's challenges will determine the next stage of the global, national and local economies. As the U.S. pulls back from globalization, China is advancing. The One Belt, One Road Initiative is Beijing's grand strategy. Will this great power rivalry define the 21st century? And with what effect? And how should global business navigate the resulting uncertainties? I'm here with Roger Epstein, who is a tax lawyer but who has done a lot of work in China. And that's why we're talking about Belt and Road, the Belt and Road Initiative, formerly known as One Belt, One and One Road. That's changed though. You could not argue that this is One Belt and One Road. This is many belts and many roads. It gurges the Earth, at least the Earth, as far as Asia and I think even some parts of Africa and Europe. We are not part of that Earth. Yeah, so let's talk first, in the first part of our show, about what it's doing, involved how it works the second part of our show let's talk about the American participation or not and if not what effect on the US you know because this is a global initiative yeah so I guess it was 2013 Xi Jinping decided going to do this and actually in my view it followed what he did with CCTV CCTV was a China news network in China and he decided or they decided back in the early the ought years to make it global and they did they made the China news network or something and there are 44 stations now all over the world and they are pumping out pro-China news all over the world yeah so they became global in terms of the information and propaganda and that would that worked so then this follows this is economic development all over the world right right oh yes and and the the the overall picture is here's places where there isn't adequate infrastructure either by land autos rail trucking or by sea which is the road so maritime so that the grand scheme of the Chinese is to lend money and build out the infrastructure in all these different countries so that you recapture the Silk Road the old Silk Road from China to across Europe and very very incredibly big undertaking and in my mind very thoughtful as I think the Chinese are in in economic matters to me China it sees the United States is where they want to be now things are definitely changing and the Trump administration has decided what's in it for us we need to protect ourselves I think that's exactly where you don't want to be as the world changes you want to be part of the change talking about the Belt and Road we had a competing kind of project with many of the leading the larger more established capitalist countries over there called the Trans-Pacific Partnership uncle Donald got us out of that and so now we don't even have we don't have anything and some of those players are trying to reform the the Trans-Pacific Partnership some of them are talking to China certainly we're out of it with these profound changes in the global economy the world needs a new convening platform to reflect and engage the competitive positions of emerging economies to address the future of public and private partnerships and to identify solutions for cross-border issues that affect us all in the program at Lawniakea the Hong Kong Business Association of Hawaii brought its flagship conference back to Honolulu to address a range of topics including economics trade investment urbanization infrastructure retail technology entrepreneurship and of course US-China relations as you know you saw the TV all the time about the China and US trade had conflict yeah so people call it trade war but I don't want to call it a trade war but it's a conflict so back and forth and I thought this put us a US resident or businessman it's just in a very odd position so especially like you want to do trade with China yeah a lot of trades with China actually you will be surprised may not be Hawaii but a lot of trade Hawaii should be interested Hawaii should know about these things participate at least in the conversation yes so and I thought because also I am a Chinese immigrant from Hong Kong and I also I also thought is put us in an awkward position because of they've been fighting for the trade so I hope that we can put in a program so everybody have a dialogue so we can talk about it and hopefully we can find a solution you know to to talk about program here I mean you have speaker after speaker I know you have a real you know this is a we have actually creative talent yeah eight our town speaker three of them are directly from Hong Kong and five of them is full from a US mainland yeah so when we do a show or a movie we always ask ourselves what is the takeaway what takeaway do you want people to get from this program on yes it's very clear that we have to two side of it morning and the afternoon the morning side we are focused on the US and China trade policy and relation so hopefully that the audience or the participant will learn and or participate in the dialogue and conversation after the the panel they addressed it and hopefully that we can find a common solution to solve at least the Hawaii and Hong Kong China problem not necessarily the national problem right so we cannot control but in the afternoon it's a practical business advice by all our speakers which is including Gerald Sabina I would I would expect nothing less yes you know from time to time you see little points of resistance by Beijing is a no you stay there Hong Kong we have our plans for Hong Kong and you are not the masters of your destiny we are but but that may or may not carry because the real momentum here is that Hong Kong was is and to a large extent will continue to be the gateway business wise to China am I right partly I think now what it what has happened quite frankly is that you've got direct lines to other parts of China from the outside and that that's not just North America but also South Asia and in Europe so Hong Kong is in an evolving situation to put it nicely you do have the you know two systems one country approach which some people would deem to be eroding within Hong Kong Singapore has looked very much as a potential counterpoint if not right to Hong Kong so we're in a state of flux Hong Kong still is a major way in but it's not exclusive and as you know right across the border there was a now a metropolis of Shenzhen previously it was just a relatively small village and now it's one of the largest larger cities in China as direct actions was everywhere in the world that's right and is developing to an IT and an AI powerhouse the forum convened a diverse group of speakers including diplomats officials academics executives entrepreneurs and opinion leaders from the East Hong Kong and the West Hawaii in the mainland the dialogue among speakers and participants was productive and stimulating it was designed to promote understanding on important issues to identify opportunities including trade globalization and competition and to explore possibilities of public-private partnerships investments and initiatives the discussion covered US-China relations and trade the new economy in the smart city the one belt one road initiative the financial and capital markets outbound investment from China the Chinese consumer retail and e-commerce markets and the state of innovation technology and entrepreneurship in the morning the forum helped us understand the current economic environment in the US-China trade dispute and get a handle on China's economic plans how these sea changes will affect the growth or decline of the global economy and thus our daily lives and how we can find solutions to current and future economic and geopolitical challenges I think what I want to do is really give you a an idea of how grand the project is initiative and it is simply too big for China to embark on in terms of the project now having said that I think I agree with the previous speaker I think Richard made a very good comment in terms of Bell and Roe and also Southeast Asia and South Asia simply said this is very different from Marshall plan of 30 40 years ago when US and the West and Europe were have been had been fully engaged in helping emerging market economies building roads and hospitals and blah blah blah blah blah blah now the difference is really is this is a pretty new initiative since 2013 and frankly many of the projects have been improved and funded but it's only five six zero so no one knows exactly what the implication is and I just want to highlight and point out that I totally agree with Richard in terms of Bell and Roe would not be successful globally period that's just simply too big an initiative for China to embark on now China has three trillion in reserves it's going to be burned very easily with all the project financing and funding and also more importantly being so proximity to Southeast Asia South Asia I think China has a very good chance of succeeding in Southeast Asia because of proximity in particular with provinces in central and west China as well as Hong Kong Greater Bay Area I think this is not a coincidence when you look at Bell and Roe initiative that was introduced in December 2013 that the Greater Bay Area recently introduced actually has been in planning for many years so I think China recognized that really the Bell and Roe initiative is a great concept very big in terms of investment resources and simply put that maybe China I think the government leadership properly realized the last few years that to succeed in some of the section of regions of the world in terms of BRI Southeast Asia South Asia would be the logical choices and more importantly I think is the allocation of resources being so proximity to the market and some of the projects that the previous speaker mentioned reflects that I think we have talked about AIB funding and certainly there is a lack of funding from ECA's you know export credit agencies EBRD even Japan Bank for international cooperation is also will be engaging with AIIB and just give you a different perspective there are currently I think probably close to 35 projects being approved and funded some of fully funded some of partially funded in about in terms of dollar value less than 8 billion dollars from AIIB now of the 35 projects only one in China less than half a billion dollars even though China is the largest shareholder but AIB actually was set up mirroring that of the World Bank ADB as well as EBRC so World Bank and I'm sure Mr. Sumida knows about it World Bank largest shareholder is US followed by Japan I think each has something like 19 to 17 percent respectively and also other countries and but the ADB Japan is the largest shareholder followed by US so I guess China has been actually following the AIB model has been following learning from the World Bank and the ADB so the funding aspect is very key to the success of the project because you need commercial banks to be involved certainly and I know a fact that all the top 10 Chinese banks these are not policy banks have already set aside probably each bank in excess of 200 billion dollars in the Bell and Rope funding and they have actually chosen Hong Kong to be the regional funding source center for all the BRI projects on behalf of China in the afternoon the forum covered practical information and advice about doing business in Hong Kong and China how global businesses can tap into China's most promising opportunities and cross-border foreign investments first and foremost question is where is the funding so the Chinese government has actually set up the Asian infrastructure investment bank AIIB to provide the initial funding for a lot of the projects an initial capital of 100 billion US dollars has been put aside for the initial funding for a lot of the projects and for the AIIB there are now more than 80 approved members with more than 60 funding members a lot of these funding members are actually countries from the West like the UK France Germany and so on so you can see that the initiative has actually got a lot of the support from the international country for TDC we try to promote the Belgium Rope business opportunities starting from the easiest projects that is close to Hong Kong and also under our influence so that's why we set priorities and we help companies to explore the business opportunities at the nearest markets in Southeast Asia first so Southeast Asia is the top priority among all the regions in the Belt and Road routings we have already brought a lot of the business dedications or even organized exhibitions in many Southeast Asian countries including Indonesia Malaysia and so on and even Vietnam so that we can capture those business opportunities there essentially Hong Kong is a trading hub so we try to promote our trading relationship with all these countries in the Southeast Asian countries this shows in effect the goal of China to reach through Europe the Middle East Africa and the northern part of the continent and it's already been summarized these are some of the scope of the geographic and economic perspectives for the Belt and Road 62% of the world's population 23 trillion combined GDP of all countries involved and in the five years since Belt and Road is first initiated we have as of last year about 117 countries that in one way or another are participating just by way of comparison if you look at the other regional trade arrangements that exist including TPP in its original form and then TPP X minus the United States in its current form one Belt one Road with China and without China RCEPT and the FTA AP you'll see that one Belt one Road is clearly the most extensive and largest in terms of numbers and coverage the forum also helped us learn how Hong Kong is a technology hub for entrepreneurs and startups who want to tap into Chinese capital and financial markets and it provided great opportunities for networking and deal-making among participants speakers and sponsors I think today everyone comes over here to look for business opportunities and that's why we try to promote the Belt and Road initiative because we think that you can all share the business opportunities arising from the initiative well basically as Jay mentioned the Belt and Road initiative doesn't consist of only one Belt or one Road the Belt actually means the Silk Road economic belt and the Road is a little bit misleading because it actually means the 21st century maritime Silk Road is the maritime routing instead of land routing so it actually consists of a lot of routings but then I think for the time being we don't need to bother about the exact location or the exact exact pathways of the Belt and Road we just look for the business opportunities arising from the Belt and Road initiative as Jay mentioned it is a very important initiative because it is a major globalization project initiated by the Chinese government but the intention of the Chinese government is for everyone to participate so that everyone can share the opportunities arising from this initiative because China alone cannot take up all the projects it's such a huge project it may last for a few generations so it's not just for our generation to enjoy the benefits but it's for our children even for our grandchildren to continue the effort in order to bring it to fruition and to have the final result of this globalization process want to know more about the Hong Kong Business Association of Hawaii check it out at hkbah.org or facebook.com slash hkbah and now let's check out our think tech schedule of events going forward think tech broadcasts its talk shows live on the internet from 10 a.m. to 5 p.m. on weekdays then we broadcast our earlier shows all night long and on the weekends and some people listen to them all night long and on 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with us let's think together we'll be right back to wrap up this week's edition of think tech but first we want to thank our underwriters okay synthia that wraps up this week's edition of think tech remember you can watch think tech on spectrum oc 16 several times every week can't get enough of it just like synthia does for additional times check out oc 16.tv for lots more think tech videos and for underwriting and sponsorship opportunities on think tech visit thinktecawaii.com be a guest or a host a producer or an intern and help us reach and have an impact on Hawaii thanks so much for being part of our think tech family and for supporting our open discussion of tech energy diversification and global awareness in Hawaii and of course the ongoing search for innovation wherever we can find it you can watch this show throughout the week and tune in next sunday evening for our next important think tech episode i'm elise anderson and i'm synthia sinclair aloha everyone