Treasury Today Country Profiles in association with Citi
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July/August 2018

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Editorial

Towards an open world economy

There may be many contenders for “the project of the century”. The worlds of computing, healthcare, automotive and aeronautics for example may all lay claim to the most important missions for the benefit of humanity. And let’s not forget the ‘project’ to save the planet itself from mankind’s best efforts to make it uninhabitable through pollutants.

But the quote referred to above is from China’s President Xi Jinping. What he is referring to is his country’s Belt and Road Initiative. He may have a point.

Some may see this as China’s push to trade along easier land, sea and air corridors for the primary benefit of itself. Not so, says President Xi who says: “we should build an open platform of cooperation and uphold and grow an open world economy”.

Certainly, it is a long and costly journey, measured in decades and trillions of dollars. China must therefore rely upon the cooperation of many countries along the various routes outwards to Asia, Africa and Europe. Some may see Belt and Road as a form of aid, for which China will no doubt be ‘paid back’ handsomely for its investment through trade domination. Others may say it is China showing the world that it is prepared to risk creating vast and perhaps at times unserviceable debt to create a collaborative ecosystem of trade.

Whatever it is, after five active years, its sheer magnitude has seen it still at the stage of infrastructure development. Chinese contractors have naturally been the main beneficiary but many overseas firms in the services and supplies sectors have drawn a decent wage from this too.

And now China is just starting to consider the next phase. This is where trade and services will become the focus. In this, Beijing is seemingly handing an opportunity for many more foreign businesses to join the journey.

Each organisation will have to evaluate what opportunities fit with its own strategy, managing the risks accordingly. This leads us to the unique and vital role of the treasurer.

No company should be heading into new territories without first understanding how best to navigate through a full corporate lifecycle, from entering into a new market, to growing the business, to integrating operations with a regional hub or headquarters.

With treasurers playing an increasingly important role in company growth, as the nexus of much of the necessary information, thinking through these different stages is vital. Treasurers are in a good place to help their organisations become successful players in Belt and Road progress. And if it turns out to be the ‘project of the century’, then the profession can stand taller still.