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The Fourth CICA Business Forum & Founding Assembly of CICA Business Council REPORT

Source:CICA     Date:2016-01-07 00:00:00

The Fourth Business Forum of Conference on Interaction and Confidence Building Measures in Asia (hereinafter referred to as CICA) and Founding Assembly of CICA Business Council (hereinafter referred to as CICA-BC) were held in Beijing on 24-25 November 2015.  Both events were hosted by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME). 

This was the first ever meeting of CICA Business Council since its initiation and was a successful conclusion to the efforts of the Chinese Chairmanship, Member States of CICA, CCCME and the CICA Secretariat who worked in close coordination with each other.  

Prior to the Plenary Session the Board of CICA-BC met and approved the agenda for the meeting. 

Opening the proceedings, Mr. Yonghong SHI, Vice President of CCCME welcomed the participants and announced that more than 230 representatives from government, financial institutions, business enterprises and diplomats from CICA Member States were attending the events. He said that after successful hosting of the NGO forum and CICA Youth Council, the CICA Business Council was a major event in the CICA history. 

A congratulatory message from H.E. Mr. YANG Jiechi, State Councilor was read by the Chairman of CCCME Mr. ZHANG Yujing. In his message Mr. YANG congratulated the formation of the CICA Business Council, a major step after the successful hosting of the NGO Forum and the CICA Youth Council. He said the CICA Business Council was an important incubator for China and could provide a major impetus in the future. He assured his full support to the new body.  

H.E. Mr. Daochi TONG, Assistant Minister of Commerce then formally announced the establishment of the CICA Business Council. He added that due to global downturn, CICA member states were under pressure and have to evolve their own cooperation mechanism. President Xi Jinping has envisioned an Economic Council for Asia. With the establishment of and leverage of One Belt One Road project, China seeks to double its GDP by 2020. China follows an inclusive growth model that is innovative and aimed at shrinking the gap between rich and poor, poverty alleviation and is ready to share the model. Mr. TONG proposed three steps for joint economic development. First, tangible interconnectivity of the region through road and rail, oil and gas pipeline, fibre-optic cables infrastructure linking/sharing among CICA members. Second, financial connectivity- through the AIIB, the BRICS Bank and the China –ASEAN maritime initiative. The third area for cooperation is in the SME sector as SMEs provide 75% of GDP and 90% of jobs and could pave the way to sustainable development and security cooperation. He called upon the CICA-BC to establish coordination mechanisms and provide interactive services to Business Community.

Mr. Guoping CHENG, Vice Minister of Foreign Affairs’ speech was read out by Ms. YAN Jiang, Deputy Director General of Department of European-Central Asian Affairs, Min of Foreign Affairs. Mr Cheng commended the peace and security dialogue started by President Nursultan Nazarbayev by establishing the CICA process in 1992. The CICA process has grown beyond the military and security dialogue and now includes the cooperation in the economic dimension too.  As current rotating chair, China is committed to take the cooperation among CICA- Business Council members forward He called for the CICA-BC to concentrate on removing bottlenecks of developments. He added that by extending the   Chairmanship of China up to 2018, member states had displayed confidence in China’s leadership. The CICA-BC will be more institutionalized and a new model for more cooperation will be established. 

Ambassador GONG Jianwei, Executive Director of CICA traced the process of formation of CICA –BC and thanked member states that played a pioneering role in its establishment. 

Mr ZHANG Yujing Chairman of CICA-BC hailed CICA as a body promoting peace, harmony and solidarity that will continue to expand. 21st Century is the Century of Asia. With their shared vision, CICA member states will strengthen dialogue mechanisms; promote industrial investment, set up a website and a sitemap of SMEs business matching. He called for increased trade in different sectors. 

The opening session was followed by three Plenary Sessions.

Session I: The Belt and Road Initiative and Enhancing Infrastructure Interconnectivity in CICA Region. 

Mr Guangcheng XING, Director of Institute of Chinese Borderland Studies, Chinese Academy of Social Sciences began his speech by saying that all six economic corridors were important to CICA member states. By developing the Silk routes a global governance of production and distribution of products was aimed at in order to develop all regions simultaneously as uneven development results in flow of refugees to developed regions. Development in China followed this logic. Equitable distribution and responsibility is also the primary logic in Silk Road and Belt. In its three decades of development China had followed three principles. 1) Roads and High Speed railways; this had tangible benefits in removal of bottlenecks and this could be followed in Asia by connecting different regions in Asia and Eurasia as well as between Asia and Europe for which favourable conditions exist. Also infrastructure interconnectivity was important. 2) Energy systems need to be connected for a seamless flow, as per demand and requirement. 3) ICT connectivity. These connections will also enable Inland countries which aspire to reach the Indo-China continent and would result in lowest logistical costs. By connecting Gwadar port Pakistan too will be connected to global supply chains.

Dr. Huang Zhou, Director General of Rural Energy Division, Deptt. of New and Renewable Energy, National Energy Administration spoke on the prospect of energy cooperation among CICA member states. He gave an overview of Energy supply and demand in CICA member countries and said there were three types of countries. 1). Supplying countries 2). Demand countries 3).Self-reliant countries. West and Central Asia were supplying countries while India and Pakistan were being COAL countries were to an extent self-reliant but deficient in oil. Asia as a whole had 50 percent reserves of oil, gas and coal. He called for improvement in external dependence by improving self-sufficiency rates, development of renewable energy, environmental protection and mitigation of Climate Change and improvement in ecological factors. Top level planning was needed among suppliers and importers as competition leads to a zero- sum game. He gave the example of  XIAN NING, a smart city which had a demonstration project which could help CICA countries. 

Dr. Ayman Aly Osman, Minister Plenipotentiary, Commercial, Embassy of Egypt, Beijing said Egypt was the only CICA country from African continent. Congratulating the Chinese Govt for approval of its 5 year plan, he gave a presentation on China-Egypt trade and cooperation in various sectors. He recommended that a) a business consortium should be established b) a network of business consultations be organized and c) exhibitions displaying the comparative strength of various countries be held.

Mr. DIAO Faming, GM, China Metallurgical Engineering & Project Corp. spoke on the achievements of his company highlighting the relative efficiency in China in establishing 500mn dollar steel companies as compared to India and Iran. He offered to build project equipment in countries like India on the strength of technical advantages. He recommended that CICA-BC should focus on ongoing projects investments and given a role in it.  Sector specific seminars, forums should be organized.

Mr. Shaobin YUAN, Vice Chairman CITIC Construction Co Ltd. listed their strength in financing of projects. Mrs. Yonghong HUANG of M/s. Kerui Petroleum Equipment outlined her company’s policies that adopt a win-win strategy as its objective. 

Session II: SMEs Collaboration in CICA Region 

Speakers Ms Svetlana Kondrateva from Russia, Ms Dzholdybayeva Galia from Kazakhstan and Dr. Mehmet Gorkem from KOSGEB, Turkey  concentrated on the achievements of SMEs sector in their respective countries outlining their role in job creation, growth, contribution to GDP and tax base of the country.

Mr. TONG Youhao of China International Cooperation of Small and Medium Enterprises said that internationalization of companies is necessary to halt global recession and to stay away from opportunism. International development strategy is important in globalization. He stressed the role of industrialization in globalization and called for more trade shows especially high-end trade shows. 

Mr. Qian YI from the Alibaba Group made an interesting presentation on how the company follows its Mission to make it easy to do business anywhere. He said they do not produce anything but bring together consumers and merchants by providing third party services. The company has created an ecosystem for SMEs to grow with their limited capital and resources and has become the biggest B2B online matching firm by providing verification, inspection and quality assurance services to SMEs. The company concentrates on due diligence to remove risks to clients. It is difficult for companies to sell in China but they make it possible by enumerating export procedures, customs clearance and store management. China is the largest online B2B market. 

Mr. Guangyun WU, President, Thai – China Rayong Industrial Zone outlined the steps they took to promote overseas establishment of Chinese companies near Bangkok. A one stop shop to help Chinese companies has been established that provides them information about rules and procedures, how to reduce risks, helping with banking channels etc. This has produced a cluster effect leading to 70 Chinese companies operating in that region. This has also attracted Chinese banks there. He said his company can help CICA members states to do  the same. 

Session III: Strengthening Investment and Financial Cooperation among CICA Member States.

Ms. Dan WANG of Silk Road Fund Ltd. briefed members on how enhanced economic and financial cooperation among CICA member states can be brought about by the company. This could be through 1) Public Private partnership investment and Greenfield investments 2) Diversified equity investment 3) Credit ratings. The company has links to multilateral financial institutions including the BRICS bank and the AIIB. It can help coordinate, risk management through innovative actions.

Amb Anwar Abdullah of Embassy of Bahrain in Beijing spoke on factors governing sustainable economic development. He said how investor confidence can be improved by facilitation of easy movement of goods and people, financial guarantees and networking leading to project investment. Risk mitigation was an important factor in improving investor confidence and gave the example of Chinese investment in Asia and Africa from whom CICA members could learn valuable lessons. 

Dr. Jun XING from China Association for Development Financing tracing a brief history of Development Financing said govt subsidies were not successful and efficient even though these were marked for poverty reduction. There is a gap in infrastructure financing today. The association works in close collaboration with three major development financing banks, namely the China Development Bank, EXIM Bank and the Agricultural Development Bank. Commercial viability in financing has to be demonstrated. Silk and Belt project, with 400 projects is also its beneficiary. 

Dr. Anatoly Leyrikh from Consortium INTRALL spoke on the contributions of Russian Scientists in R & D and dwelt on factors governing setting up of production facilities abroad and attracting foreign establishments in Russia. This could be replicated in CICA countries also. 

Other speakers wrapped up the session by presentations specific to the activities of their companies. They were Mr. Hailan PAN  from Project Insurance Management Department of China, Export and Credit Insurance Corpn (SINOSURE), Mr. Gabit Lesbekov, from JSC Fund (DAMU), Kazakhstan, and Mr Qiang YAO, from Power Construction Corporation of China. 

After the plenary, a Business to Business Matching Session was held where representatives from various participating firms interacted and exchanged notes about their companies. In addition to the 40 Chinese companies, diplomatic representatives from several Missions in Beijing, the Confederation of Indian Industry, JCS “Samruk-Kazyna, Trade Mission of Russian Federation in China, and the Lebanese Ministry of Industry marked their presence. 

On 25 November representatives gathered to discuss the Outcome Document and the Working Plan of CICA Business Council. Member states had already been provided with draft Outcome Document two week prior to the meeting. The Outcome Document was adopted after incorporating suggestions from representatives of participating member states. Some member states had made recommendations for the working of Business Council which were annexed to the main document. 

In the closing ceremony that followed the adoption of Outcome Document remarks were made by the following: 

Amb GONG Jianwei, Executive Director of CICA Secretariat congratulating the CCCME and its team of volunteers said it was heartening to see CICA Business Council become a fully functional forum in less than two years after adoption of decision for its establishment. Enhanced economic cooperation among member states would also lead to comprehensive and sustainable security in the region. Going over the remarks made by leading speakers, he said CICA had the potential to become the incubator for future development. He also congratulated the participants of the plenary session for their excellent presentations and suggestions and hoped the CICA member states will organize frequent meetings and business related events to achieve the stated objectives of the Business Council.

Ms. Dzholdybayeva Galia, Vice Chairman of the Board of CICA-BC from Kazakhstan said that after reviewing the presentations made she felt there were a lot of issues to tackle. Clarifying her statement on holding the next Business Forum in Kazakhstan she said the issue needed to be further discussed with relevant Govt authorities. Calling for sharing of experience she said business and Govt support was important for the development of SMEs and to translate the goals and objectives of CICA-BC into practice. CICA BC would make effective contribution and be an important part of the global scene. 

Mr. Guofei Sheng from the CCCME said the efforts and resources put in by the organization had led to the successful hosting of the Fourth CICA Business Forum and the Founding Assembly of CICA Business Council.

Finally, Mr Yujing ZHANG Chairman of the Board, CICA Business Council complimented the participants for high quality discussions and the great efforts put in by them. He called for business delegations from member states to visit other states and China. Emphasizing the promotion of SMEs and social development coupled with economic growth, he said hi-tech companies also have immense business opportunities and this has created opportunity in the region for economic cooperation. E-commerce can play an important role in cross border trade in CICA region. He called for strengthening communications with other regional bodies such as OECD, ASEAN and SCO. The journey of 10,000 miles begins with a single step that has been taken. He thanked the participants from diplomatic missions in China before declaring the meeting closed. 

A trip to the Chinese IT giant INSPUR was organized in the afternoon. An interactive tour of the facility showcasing the company’s achievements and high end products was conducted. Subsequently, Mr. Peter Huang, Vice President of INSPUR gave an overview of the company’s international collaborations stressing that it looked forward to cooperation with CICA countries through the CICA- BC.

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