From left: Standard Chartered Sri Lanka CEO Jim McCabe, Standard Chartered China Managing Director and Financial Markets Head Wesley Yang and Standard Chartered China Commercial Banking and Transaction Banking Head Sebastian Er speak at the Belt Road Initiative press briefing in Colombo, yesterday
Standard Chartered (StanChart) is well set to become the full financial services provider for China’s ambitious Belt and Road Initiative (BRI), which aspires to recreate the ancient Silk Road, connecting China with Asia, Africa, Europe and the Middle East with the aim of achieving mutual development.
According to StanChart China Financial Markets Head Wesley Yang, who is visiting Sri Lanka with a Hong Kong and Chinese media delegation, as part of a South Asia and Southeast Asia BRI roadshow, StanChart has presence in 46 countries in the BRI and therefore, it’s natural for the bank to spearhead the project as a strategic initiative.
Although government to government deals are at the centre of the BRI through institutions such as the Asian Infrastructure Investment Bank (AIIB), Silk Road Fund, China Exim Bank and China Development Bank, according to Yang, StanChart plays an important role facilitating the BRI globally as well as locally due to their deep understanding of China and the countries which are partners of the initiative.
He said when large Chinese private sector companies are ready to play an active role as the BRI goes forward, StanChart could step in as a trusted banking partner to address the financing needs of these companies, while assisting them with the bank’s knowledge of legal and tax structures, environmental laws and political sensitivities of the countries on the belt.
Also, StanChart’s world-class banking team could help these companies with project and export financing, cash management and foreign exchange hedging, Yang pointed out.
StanChart has already set up a ‘China desk’ to address issues relating to the BRI and formed executive and working committees to facilitate the initiative locally as well as globally.
According to StanChart Sri Lanka CEO Jim McCabe, Sri Lanka is a crucial partner in the BRI, given its strategic geographical location and its ports. He said in the last few years the relationship between Sri Lanka and China has accelerated.
“It’s (Chinese presence) obvious when you look at all the big infrastructure projects such as highways, airports, ports, container terminals and so on—all these infrastructure projects are either funded by China or built through public-private partnerships with China,” McCabe said.
China became Sri Lanka’s biggest trade partner last year, surpassing India with whom Sri Lanka has a free trade agreement (FTA). Sri Lanka is currently negotiating an FTA with China, which is likely to be signed by early next year. Unveiled in 2013, BRI is China’s most ambitious endeavour so far, aimed at marking its presence as a different kind of world power, professing a ‘win-win’ formula for all its partners, largely through trade. Beijing has always been quick to stress that BRI is not a geopolitical tool designed to widen China’s influence. However, several months back, there was a massive public protest in Sri Lanka against a proposed Chinese industrial zone in Hambantota. The industrial zone is part of a deal the Sri Lankan government has been negotiating with a state-run Chinese company to sell a stake in the Hambantota port on a long-term lease.
As a result, the port sale deal, which was scheduled to have been signed early this year, remains unsigned to this date.
However, McCabe said he remains positive of such issues getting resolved at a government to government level, going forward.
“China is not new to Sri Lanka and Sri Lanka is not new to China. They go a long way back. These things get resolved. The activities between the two countries have accelerated in the last 10 years quite significantly. And now with this initiative (BRI), things will accelerate even more,” he said.