A S Systemat matic ic Framewo work an rk and Case Studies es - - PowerPoint PPT Presentation

29 May 2019 Leadership, Organisations and Behaviour

Investm tmen ents s in t the Digital al Silk Road: A S Systemat matic ic Framewo work an rk and Case Studies es

• f a

a D Digital al Ecosyst stem em

Irina Heim, University of Reading, UK Jin Gao, Associate Professor， Southwest Minzu University, China

1 April, 2020

Content Content

• Resource-based economy in

Kazakhstan

• Infrastructure investments
• New digital economy
• Chinese investments in Kazakhstan
• Digital Silk Road Case Studies: Digital

Infrastructure and Application

2

New Silk Road/BRI/OBOR/B&R New Silk Road/BRI/OBOR/B&R

3

Source: Merics.org (2018)

Resource Resource-based economy in KZ

4

GDP per capita, USD. Russia 10950 Kazakhstan 9970 China 9633

IMF (2018).

Infrastructure Infrastructure investments investments

New Silk Road targets:

• overseas investments in infrastructure

projects: roads railways sea ports

• information and communication technology
• energy infrastructure

5

New Digital New Digital Economy in KZ Economy in KZ

Digitalisation is recognised as a critical factor in ensuring sustainable development of the country

6 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 China Korea, Rep. Turkey Kazakhstan Italy Sweden

Research and development expenditures, % of GDP Source: WB (2018).

*IMF Working paper (2019) suggests that min of 2% of GDP needs be invested

Digital Silk Digital Silk Road in KZ Road in KZ

• development of reliable, affordable, high-speed,

secure digital infrastructure;

• shaping a creative society, including the development
• f competences and skills for the digital economy,

upgrading of digital literacy, training of ICT specialists for industries;

• digital transformation in the economy, including

introduction of a digital technology to enhance the competitiveness of different sectors of the economy;

• digital government, including improvement of

electronic and mobile government platforms, and

• ptimisation of the public services supply sphere.

7

BRI Milestones BRI Milestones

• 2015 China – EU Digital Cooperation Roundtable
• 2017 – 1st Belt and Road Forum for

International Cooperation (attended by 29 foreign heads of states and government, WB, UN and IMF)

• State Program Digital Kazakhstan
• 2018 – Kazakhstan welcome New Digital Silk

Road (President speech)

• 2019

– 2nd Belt and Road Forum for International Cooperation

8

Chinese Investments Chinese Investments in KZ in KZ

9 Date Announced Acquirer Name Target Name Target Industry Value of ($mil)

12/15/2017 Investor Group KTZE-Khorgos Gateway Industrials

• 07/28/2017

Schlumberger Holding II Ltd Soak Oil & Gas Energy 214.00 05/15/2017 Investor Group KTZE-Khorgos Gateway-Dry Port Industrials

• 04/12/2017

CNMIE Co Alliur Retail

• 11/03/2016

Investor Group Altyn Bank Financials 80.98 01/14/2016 CEFC Natural Gas (Shanghai) Petroleum Industrials 100.30 01/07/2015 Investor Group Galaz & Co Energy 100.00

Case studies es(D (Digi gital al Infrast stru ructu ture re)

10

Case study: Khorgos, the biggest dry port in the world (infrastructure) 49% owned by SOE COSCO (CH) Special economic zone (KZ) Duty-free zone (KZ & CH) Railway station (CH) Airport is planned (CH) New city Nurkent (KZ)

Case study: Huawei in KZ (energy infrastructure and ICT)

Asia Gas Pipeline: a JV of Kazakhstan Oil and CNPC Huawei: communication part of the natural gas pipeline project Case study: Smart oil transportation programme (energy infrastructure and ICT) KazTransOil Kazakh Universities Kazakh National Academy of Science for Kazakh-China Oil Pipeline Caspian Pipeline Consortium North-West Pipeline Karachaganak Petroleum Operating (one of 3 major exploratory projects)

11

Case studies es(D (Digi gital al Infrast stru ructu ture re)

Case study: Bank M&A (Financials Sector) China CITIC Bank Corporation Limited Shuangwei Investment Co., Ltd. Altyn Bank JSC The cooperation In the digital area especially in fintech area which CITIC bank pay high attention to. Three important parts in Altyn Bank in digital promotions: Platform(Altyn-i), Payment system(CIPS), banking technologies(Fintech) Case study: e-commerce cooperation (E-commerce Sector) The Memorandum of Understanding

• n E-commerce Cooperation

Increase domestic and cross-border trade Transit flows in KTZ arising from China and the EU's courier services

12

Case Studies Case Studies Digital Application Digital Application

Payment-The foundation of digital ecosystem

• 1. China UnionPay-Regional

payment network

• 2. NetsUnion Clearing

Corporation-Non-bank payment institution

• 3. Cross-border Interbank

Payment System 4.Third-party payment institutions’ oversea cooperation Cross-border Trade Platform/Tech Application-Blockchain 1.The trade info transferring 2.The money transferring 3.The credit system Example: eTradeConnect, the blockchain pilot project of Tianjin port made by Ping An Insurance Company

13

Fintech industries Fintech industries and BRI and BRI

Representative Technologies in Fintech Big data analytics, Blockchain Digital efficiencies/ Robotics process automation, Natural language processing, Real-time compliance, Cloud-based service/hosted solutions, Cognitive technologies/Machine Learning, Automated voice monitoring and analysis, Biometric technologies Regulation technology (RegTech) is the use of technological solutions to facilitate compliance with and monitoring of regulatory requirements (UK Financial Conduct Authority 2015).

14

Building Digital Building Digital Silk Road Silk Road

• 1.Cooperated with the local banking system, promoting the

cross-border payment

• 2.Cross-border trade and E-commerce
• 3.Digital Industry-Energy, Medical Care, Manufacturing
• 4.Developing the Regtech cooperation
• Identity verification
• Real time payments
• Compliance data
• Regulatory compliance automation
• Monitoring behavior and organization culture
• Trade reporting…..

15

Actors Actors MNEs MNEs Private SMEs Private SMEs Government Government State State-owned enterprises