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Borderless win-win cooperation in building the Belt and Road


Development and prospect of third-party market cooperation

Over the past five years, with the gradual deepening of the B&R construction, third-party market cooperation has become increasingly prominent. China has signed third-party market cooperation documents with Japan, France, Canada and Singapore, etc. and has also set up third-party market cooperation funds with European Investment and Development Bank and other French financial institutions.

China - Japan: from competition to cooperation, from rivals to partners

Sino-Japanese relations have warmed up since 2018 and the two countries have been strengthening communication and cooperation in various aspects. Most B&R countries are still in the early stage of industrialization. They urgently need to develop infrastructure while facing challenges and lacking technology and capital. Sino-Japan third-party market cooperation is conducive to speeding up the social and economic development of those countries.

  • Infrastructure construction

    China overseas infrastructure development advantages lie in strong financial strength, short construction cycle, strong government support and high cost-performance ratio. However, the risk management and control mechanism of Japanese infrastructure enterprises are more mature and well developed. They have obvious advantages in project operation and management, but at the same time, they face the issues such as labor shortage and long construction cycle. Therefore, third-party market cooperation between the two countries in the infrastructure sector is highly complementary and has broad prospects.

  • Technology

    On 26 October 2018, China and Japan signed the Memorandum on Establishing China-Japan Innovation Cooperation Mechanism. The two governments agreed to establish an inter-departmental “China-Japan Innovation Cooperation Mechanism” under the high-level dialogue to promote specific cooperation in areas such as industrial innovation and intellectual property, etc.

  • Finance

    On 26 October 2018, China and Japan restarted currency swaps after five years, with a scale of RMB200 billion. The purpose is to maintain financial stability, support the development of bilateral economic and financial activities, expand mutually beneficial and pragmatic cooperation in the fields of finance, and further deepen Sino-Japanese economic relations.

At present, the major third-party market cooperation between China and Japan in financial sector mainly involve China's policy banks and state-owned enterprises, with Japan's three major banks in investment, loans and insurance areas. In the future, we expect more diversified cooperation, and small and medium-sized financial institutions will gradually "go abroad" so that the two countries will broaden their cooperation in a deeper extent.

Although the Sino-Japanese relations have experienced ups and downs, the economic and trade relations and market cooperation between the two countries have great potential and good prospects. After a relatively short period of development, the third-party market cooperation between China and Japan has successfully established a mechanism such as the Sino-Japan Third-Party Cooperation Forum, which set a great example for the cooperation and development of third-party markets between China and other countries.

China - France: building a benchmark for cooperation with a focus on Asia and Africa

France has deep roots in Africa, especially the French speaking countries. France has a high level of technology in infrastructure and energy. African countries have urgent need to improve their infrastructure which has been stalling economic development. On the other hand, China has production capacity advantages, complete manufacturing base and strong financial strength. Therefore, third-party market cooperation with France can help Chinese companies enter the African market whereas China can help French companies enter the Asian market taking its location advantage in Asia.

  • Finance

    China and France are actively establishing bilateral mechanisms for third-party project investment in accordance with the Joint Statement on the cooperation of third-party markets jointly issued by the Chinese and French governments. First, establish a mutual investment fund to provide financial support for tripartite cooperation. Second, establish a mechanism for dialogue and coordination between the two countries to build a platform to promote communication and participation of various financial institutions, and their participation in project investment. Meanwhile, the NDRC and the French Treasury has established a steering committee and set up a demonstration project list mechanism to identify cooperation credentials.

  • Energy

    France is a traditional nuclear power country. China's technological advantages in nuclear energy have also been greatly improved in recent years. The French government has recently begun to vigorously develop renewable energy. On the other hand, China is also seeking to transit from fossil to renewable energy, which lay the foundation for the two countries to cooperate in nuclear energy and renewable energy sectors. Meanwhile, African countries have rich natural resource in renewable energy. Looking forward, there is great potential of the cooperation between China and France in energy sector.

  • Transport and Logistics

    In the joint statement on the cooperation in third-party markets between China and France, it mentions that in transportation, both parties should make full use of their advantages to strengthen cooperation in trunk railways and urban railways, and jointly study and explore cooperation areas and potential. French companies still have the first-mover advantages in high-speed rail technologies, but Chinese companies have been catching up quickly in recent years, gaining competitive advantages in construction period and cost. It is of great potential for the two parties to strengthen cooperation and jointly develop transport infrastructures in third-party markets.

The cooperation between China and France in third-party markets requires both the governments to improve their mechanisms and strengthen guidances. It also requires the enterprises to explore the market, build benchmarking projects and show credentials.

China - UK: breaking the barrier and complementing each other

When President Xi Jinping visited the UK in 2015, he mentioned the cooperation between China and the UK on the B&R - “The Chinese and British industries are highly complementary, and the concepts of jointly promoting open markets are similar. The willingness to promote free trade and expand two-way investment is the same.” The development of third-party market cooperation between China and the UK is not only a great historic opportunity, but it has also garnered the support of both Chinese and British governments and policies.

  • Infrastructure construction

    China and the UK has its own strengths in the field of infrastructure construction and are complementary. The UK has advantages in design, law, consulting and management in the engineering field. China are strong at construction efficiency, engineering technology innovation, cost control, supply chain management and cost performance. The cooperation between the two countries can achieve a win-win outcome and meet the development needs of third-party countries.

  • Finance

    Compared with China, the UK has a long history and rich experience in international finance service. As a traditional international financial center, the UK has a well-established system and has a history of cooperation and close relationship with many B&R countries. The China-UK development has a good momentum in green finance. Green development also plays an important role of China's economic transformation and the B&R sustainability.

The B&R financial cooperation between China and the UK has been at the forefront of other Western countries, and has set a number of precedents. The UK is the first applicant to join the AIIB, the first to invest in the AIIB Special Fund, and also the first to sign the Guiding Principles on Financing the Development of the Belt and Road.


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