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State-run China Railway Group said they plan to “work closely” with Hong Kong’s MTR to jointly develop rail projects in countries included in Beijing’s ambitious plan to improve connectivity and enhance physical infrastructure, known as the “Belt and Road” initiative.
“While we own advanced technology, Hong Kong’s rail company is more international than us. It also has advantages in management and financing, and a better understanding of overseas rules and regulations,” China Railway’s chairman Meng Fengchao said during a panel discussion at the Belt and Road Summit in Hong Kong Monday.
In the next step, Meng said they will work closely with MTR to develop rail projects to achieve mutual benefit.
“Hong Kong’s rail company can’t be absent in belt and road projects,” he said.
In the same panel, MTR chairman Frederick Ma Si-hang unveiled that Hong Kong’s sole train operator signed a memorandum of understanding with China Railway last year to jointly expand overseas.
In their first project, the two companies have been bidding for the £32.7 billion (US$43.2 billion) high speed rail project connecting London and Birmingham. The joint bid has been shortlisted among three finalists.
In Asia, the MTR is partnering with China Railway to bid for the contract to build a 350 kilometre high-speed rail link between Kuala Lumpur and Singapore, which, if successful, would be the MTR’s first project related to China’s belt and road plan.
The Hong Kong rail operator has been providing services in the UK, Sweden and Australia for almost 10 years.
But Ma highlighted that the MTR is “very prudent” in belt and road construction, especially in developing economies.
“We haven’t invested any of our capital yet [in belt and road countries] as we must assess a vast range of risks, from political risks, legal risks to financial risks,” Ma said.
As an example, Ma said MTR visited Myanmar last year but found that there were too many uncertainties.
Still, belt and road has brought Hong Kong tremendous business opportunities and Hong Kong companies should not wait at home but must step out to seek cooperations, Ma said.
Speaking at the forum, Chief Executive Carrie Lam Cheng Yuet-ngor said the Hong Kong government is in discussion with Beijing about a “landmark agreement” that highlights Hong Kong’s advantages under the belt and road initiative.
The proposed framework would cover areas such as finance and capital raising, infrastructure facilities, and dispute arbitration. Lam said the Hong Kong government also plans to add another economic and trade office in one of the Southeast Asian countries.
To fully ride on the China-led trade plan, commerce minister Edward Yau Tang-wah said at the forum that the Hong Kong government will prioritise countries along the belt and road when signing free trade agreements, as he saw these countries have greater potential for bilateral trading relations than others.
“Obviously with limited resources and comparative priorities, we will focus on countries and economies where we think there will be mutual benefits,” he said.
This article first appeared on www.scmp.com
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