A Service in Demand
Dependent on market demand, the “Silk Road” projects look to provide the best value for money, especially where there is need to move products quicker to and from European markets with higher demands. This decision would normally be driven by customer demand for particular products. The map above showing route of the train demonstrates how market demand and the realities of globalization are increasingly realizing the revival of the ancient Silk Road.
More Trade Routes
For centuries, the famous trade route from the ancient capital of Xian provided a linkage to the busy markets of European cities. In this new era, China has become the world’s biggest exporter and the “Silk Road” make available a link to these markets. For China, it offers alternative means to sustain its economic development. And as the second biggest economy in the world right now, it gives them a great route to import high-value products from Europe.
Extolling the Features of Globalization
For some nations like Kazakhstan, this is as much political as economic. It also offers China the chance to project soft power in addition to representing its influence to thread different nations from Russia to Spain together. There is also a business case for this evolving trade route to grow. Not least amid European firms looking to export to China. China is already the European Union’s second-biggest export market!
In March 2017, China’s Commerce Minister Zhong Shan said “Silk Road” project contributed 180,000 jobs and nearly $1.1 billion in tax revenue along the Belt and Road. Increasing numbers of Chinese engineers, crane operators and steel smelters stand to reap the benefits of maturing projects. Similarly, this project will create jobs in Europe and especially in Train Management and Logistics Industry.
As a conscious logistics provider, we always think of ways to reduce emission. One of the other bequests to challenge is China’s pollution issue. While rail cargo is not as eco-friendly as sea transport it releases a lesser amount of carbon dioxide (CO2) than air. Air transportation accounts for about 7% of total greenhouse gas releases, but it is troubled with difficulty to equate emissions from dissimilar transport modes as energy efficiency, load factor, and power sources all make a variation and can be hard to establish.
Potential Challenges with Silk Road
Like most things in business, this initiates have its fair share of challenges and issues. The few we need to be mindful of:
Trade Compliance Rules
The “Silk Road” project, which takes in more than sixty states and quite a few international bodies, simply point toward unparalleled prospects and challenges too. Countries outside EU have their own trade compliance rules, regulations and duties.
Like every Belt and Road partner, wants its own industries to succeed, which could be a challenge for China and its partner. Sceptism and distrust have persisted during Beijing’s New “Silk Road” push. For example, Australia rejected China’s invitation to connect with the globalization strategy during Premier Li Keqiang’s visit
There are plenty of supply chain risk we need to consider while doing business. China government is aware of this issue. Zhu Feng, who is dean of Institute of International Affairs at Nanjing University says, “Security is the most important challenge facing Belt and Road,”.
In this respect security should not be understood as the risk of theft or damage, as this type of security is not at stake. It is much more that every nation along the “Silk Road” faces an exclusive combination of challenges and risks. Many face macroeconomic challenges, due to exchange-rate unpredictability, big debt burdens, and non-diversified, unmaintainable economic assemblies. Then there are the compound and diverse laws, regulations, and rules influencing the business environment in each nation. Certainly, it is nearly impossible for the Chinese and European enterprises to comprehend completely each issue before entering it. The challenges may be multifaceted, but the plan for steering through them is modest if all parties walk together.
China, as the foremost organizer of the “One Belt, One Road” initiative, must take steps to make sure that every commerce act and participate reliably. The governments of all host nations will have to control and organize sub-national managements efficiently, while at work to make sure that competition is impartial and productive. Realizing the “Silk Road” initiative will not be simple. But China has all that is needed to succeed. On condition that it uses them in a system that is clean, green, and clear as crystal, China and other participating nations will gain massive rewards.