Infrastructure – East West Markets

Asia’s US Purchasing Power

In 2017, Asia became the largest purchaser of US crude oil, a trend that is likely to continue in 2018 which is significant given that it has just been two years since Washington ended its crude-export ban. According to statistics from the US Census Bureau, the percentage of how much oil Asia took from the US was 37, which was a development of 9 percent in 2016.

The Chinese refineries (government owned) are supplementing their barrel capacity by half a million tis year and the teapots (independent refiners) are also developing. US government is predicting that production will reach more than 11 million barrels per day in the next 9 months which is right up there with Saudi Arabia and Russia. According to ESAI Energy Inc. analyst Elisabeth Murphy, “Asia is definitely the market for where exports will grow.”

Another instances of US-Asian collaboration is the presence of the US State Department’s presence at the Singapore air show in an effort to enable US defense contractors to permeate the Asian market. According to Tina Kaidanow, State Department principal deputy assistant secretary for Bureau of Political-Military Affairs who is “responsible for the conduct of our defense sales across the globe but with particular reference, at least over the next few days, to the Indo-Pacific…This is an increasingly important region of the world for us. This is something we are really committed to developing these partnerships both in the bilateral sense but also in a multilateral sense. Over the next few days I will be speaking both to representatives of the individual countries that will be here at the show but also to some of our U.S. companies and to others so it’s a real opportunity for me and I’m looking forward to it.”

British-China Trade

Confederation of British Industry data has shown that in 2016, the UK and China undertook £55 billion of trade rendering Britain China’s 8^th largest partner worldwide. And last year it was only Germany that conducted more trade with China. The numbers for British-China trade are incredibly positive especially in the current post-Brexit environment. This also gives Theresa May’s country a better marketing position for other global interactions. Plus, British goods and services are gaining popularity in the region.

This trend is likely to continue. With the direct China-Britain freight train, trade patterns will improve. Knowing that speed and reliability of transport will be enhanced, according to Logistics of DP World London Gateway’s GM Nichola Silveira, trade will no doubt expand. Following a journey lasting nearly 3 weeks, the first China-bound freight train carrying British products left DP World London Gateway terminal on April 10. It is hoped that a weekly service will soon be established reaching many provinces in China.

The transportation will ultimately become part of the Silk Road Economic Belt and the 21st Century Maritime Silk Road and will encourage greater fiscal integration, infrastructure inter-connectivity, people-to-people exchanges between Asia, Europe and Africa and trade.

Belt and Road Initiative

Gordon Brown, Britain’s former Prime Minister, is at the forefront of the China Belt and Road Initiative – a road and sea route linking up China with the West. The initiative – discussed later this month at a conference in Edinburgh – will provide substantial opportunities for investment and developments between the east and west.

Known as the BRI, the project – costing $95 billion – will provide an immense opportunity to sell goods, infrastructure and advisory services to various wealthy clients around the world. brown is an appropriate choice for leading this venture (at Edinburgh University) since not only was he a rector there but during his time at the helm of British politics, he was a huge supporter of the promotion of trade links with China. At the conference he is set to offer participants his “unique geopolitical perspective on the continued development and influence of Asia and China on global trade.”

The BRI has also been hailed as “a road map to the future…offer[ing] a modern-day solution that fosters inclusive growth and development in the 21st century.” Spanning 60+ countries and regions from Asia to Europe, the goal is that by 2050 it will “contribute 80 per cent of global GDP growth, and advance three billion more people into the middle class.”

The East-West Economic Corridor (EWEC): India Thailand, Myanmar

In Bangkok, work is being undertaken to construct a 1,400 kilometer road to connect India with Southeast Asia. It is the first time a connection will have been made on land in tens of years and is likely to significantly bolster trade and cultural transactions between the regions.

During World War II many bridges were built in Myanmar. Now, 73 of them are finally being renovated thanks to Indian-based funding. This will provide a safe way for highway crossing for large vehicles. Once this has been completed all three countries will have access to the highway.

Further, there are negotiations are taking place to reach a tri-nation motor vehicle accord so that the new road will extend to Thailand at the Tak, Mae Sot district. Really all of this is just continuing an already existing trend. As Bhagwant Singh Bishnoi, Indian’s Ambassador to Thailand noted: “There has always been a meeting of minds between India and Thailand. Our two countries share cultural, spiritual and linguistic links. With this road we will also have physical connectivity.”

Once the road is functioning, a true “Act East” policy supported by India will be in force.