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What does the RCEP, which took eight years to get signed, have to do with “The Belt and Road Initiative”?
CITIC Telecom CPC has left its footprint from "The Belt and Road Initiative" to the RCEP Free Trade Zone, what is going on?
Today, we will take you back into history, glance around the present moment, and foresee the future.
Let us start with the two commercial roads of ancient China.
Modern Heritage from Ancient "Silk Road" by Land and Sea
You may not know that lots of everyday foods are "imported" into China, such as carrots, tomatoes, onions, celeries, watercress, cabbage... They still retain their own origins in their Chinese names. These foods from the Silk Road by land and sea still enrich our dining table.
As early as the Qin and Han Dynasties, China's trade routes by land and sea had been opened up, and gradually expanded in later generations. In 1877, a German geographer, Ferdinand von Richthofen, named the ancient commercial route that began in Luoyang, passing through the Western region and Central Asia, and connected India as “Silk Road” in his book about geography. It was commonly recognized by many scholars.
Modern scholars studied this piece of history, further extending the meaning of "Silk Road". It becomes the synonym of economic and cultural exchanges between the Oriental and the Occidental. Even prime goods traded through the maritime route are not silk, but spices, porcelains, and other goods, the ancient maritime commercial road is still known as "Maritime Silk Road." We usually associate the country name “China” with porcelains, but indeed, ancient Greek and Roman geographers and historians referred “China” as “Serica”, which means "Country of Silk". Therefore, both silk and porcelains were the synonyms of China in the eyes of foreigners in ancient times.
In ancient times, China enjoyed an absolute surplus in foreign trades. During Southern Song Dynasty, maritime trading could bring about a considerable revenue. Merchants could “gain substantial profits, including pearls, rhinoceros’ horns, spices and horses after years of maritime trading”, bringing a mega amount of tax revenue to the country. The tax revenue from trading could account for 30% of the state’s fiscal revenue.
Today, the importance of "trading" to a country is needless to say, the value of the two "Silk Roads" in ancient China has also been re-examined as an influential cultural opportunity for developing foreign trades.
In 2015, China issued the "Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road". For trading by land, international channels are eminently relied on, with central cities along the route as supports, and key economic and trade industrial regions as cooperation platforms. New international economic cooperation corridors, including bridges connecting Asia and Europe, China-Mongolia-Russia, China-Central Asia-West Asia, China-Indochina, can be jointly built. For trading by sea, pivotal ports are treated as nodes to jointly build a smooth, safe, and efficient transportation channel.
As a result, "The Belt and Road Initiative " has inherited the cultural connotation of the ancient Silk Road and has now been given a new meaning for this era. After all, no country in this current era has an absolute surplus in foreign trades. On the contrary, as the global industrial chain further extends and the division of labour becomes more and more detailed, countries are becoming more dependent on the international market. Countries and regions continue to sign trade agreements to promote "zero tariffs" in order to remove trade barriers and achieve tariff reduction, and eventually attain mutual trade benefits. These favourable policies are opportunities for enterprises; however, if they want to seize the opportunities, they need efficient communications to support.
Network Interoperability: The Forerunner and Critical Foundation of " The Belt and Road Initiative "
In recent years, CITIC Telecom CPC has successively expanded its development in Singapore, Europe and other countries and regions, including Network Operation Centers in the Baltic Sea, Moscow, and Tallinn, and a data center in Tallinn, the capital of the Republic of Estonia, known as Tallinn Internet Exchange (TLL-IX). The company has huge network resources and rich experience in Central Asia, and Central and Eastern Europe. With 24 Points of Presence (POP) locations in 14 countries, it can significantly satisfy customers’ diverse global business needs and help them develop digital businesses.
After Acclivis, a leading IT service provider in the Asia-Pacific region, became a subsidiary of CITIC Telecom, the Group has strengthened its capabilities in providing Internet access, cloud services, and system & network integration services in Southeast Asia. In the meantime, a prominent Internet Service Provider (ISP) in Singapore and Thailand, Pacific Internet is also held by CITIC Telecom.
The delivery capability of CITIC Telecom CPC covers silk roads by land and sea altogether. It has formed close collaboration with more than 600 operators around the world. It has over 140 POP in more than 130 countries and regions, nearly 20 Cloud service centers, more than 30 data centers and around 50 self-managed SD-WAN gateways.
RCEP: Territory expansion of contemporary "Silk Road PLUS"
From the ancient "Silk Road" by land and sea to the 21st century " The Belt and Road Initiative ", what do they have to do with the recently signed RCEP?
"Silk Road" refers to foreign trades with China; however, under the development trend of regional economic integration, China re-construct the ancient Silk Road and derive the new concept of modern Silk Road. For China, the signing of RCEP represents the in-depth territory expansion of the modern "Silk Road” and is also known as "Silk Road PLUS".
From the map, we can spot that there were two ancient Chinese silk roads. The silk road by land was an international route from China to India and other South Asian countries, and the silk road by sea ran through coastal countries along the Pacific and Indian Ocean. This is basically in line with the regional division of modern Asia-Pacific economy. Under economic globalization, countries in the Asia-Pacific region have also embarked on a long road to regional integration in modern times. In the words of an international trade scholar Bhagwati, trade agreements in the Asia-Pacific region are as inextricable as "pasta".
China is connected to many Asia-Pacific countries geographically. For thousands of years, there have been inseparable connections of human, languages, cultures, trades, and clans. The Asia-Pacific region is a hub for development in the 21st century, and it is also a pivotal region where superpowers are competing to invest.
However, the trade agreements among the Asia-Pacific countries are intertwined, which may restrict the further development of the Asia-Pacific region. The integration of trade agreements is the most urgent task in order to solve the "pasta" problem. The RCEP is finally reached in 2020, which is in no way an easy year. The formation of this super large-scale free trade zone has allowed nearly one-third of the world's economy to form an integrated market.
By further reducing trade barriers within the region, RCEP enables member states to further utilize their own technological, labor and natural resource advantages to form a clearer regional system for division of production. After the formation of a unified market in the region, the effect of "trade creation" will be more obvious: the cost of export-oriented enterprises will be significantly reduced, and the import cost of enterprises that rely on imported raw materials and components will also be greatly reduced. For each consumer, they can buy more consumer goods at lower prices. For enterprises, the threshold to enter the member states in the region has also been lowered.
However, the formation of regional market integration does not mean that all obstacles of trade exchanges and daily business operations within the region have been removed. Not only will cross-regional and time zone issues be magnified, but multicultural collisions and exchanges will also become more frequent in operating businesses. By then, enterprises will encounter more intangible challenges on communication issues in their daily operations, and it will be difficult to solve them simply by specific trade regulations.
Take a global chain enterprise as an example, it has thousands of stores in different countries and regions around the world. As their stores are located in with different cultural backgrounds, resolving the unification of "internationality" and "locality" becomes the most difficult task when performing network deployment and daily operations & maintenance in these stores. "Internationality" refers to the companies successfully build up networks across different regions and allow all stores smoothly access to the network under an unified management; "locality" refers to that no matter which region the store is located at, problems can be solved instantly when communication fails. Therefore, when selecting a ICT service provider, an enterprise should consider not only the abundance of international resources, but also the ability to provide localized services.
From "The Belt and Road Initiative" to "RCEP": To build a digital Silk Road Leading to the Future
If as expected, the RCEP will become the largest free trade zone in the global economy under the Asia-Pacific integration. According to statistics in 2019, the total population of the 15 member states has reached 2.27 billion, with the GDP reaching 26 trillion U.S. dollars, and total exports accounting for 5.2 trillion U.S. dollars. All three indicators account for about one-third of the global total amount.
The complementarity among member states of RCEP is obvious, and their unique advantages on production factors can form a complete industrial cooperation chain. Cooperating under the trade agreement, multinational companies can optimize the resources allocation among member states, redistributing production factors, hence saving costs and improving efficiency. The space for co-development is very broad. Companies that want to take advantage of the RCEP policy will undoubtedly need to break through the digital barrier: communications, in order to truly transform into a driving force for business development.
Take a multinational group as an example. Headquartered in Guangzhou, China, the group has established 11 branches and factories overseas, and sales network covering more than 20 countries and regions. It has established its own industrial chain system from production, sales to after-sales. With such a large industrial chain, the timeliness of management directly affects its efficiency. They need to ensure the stability and security of data transmission between oversea and domestic business systems. For the applications management, it is necessary to be convenient and efficient. In addition, in terms of sales, franchise stores, cashier systems, purchase systems, etc., they all need to be connected to the local network, which may be easily exposed to network attacks. For the reseller management system which is used to place orders, the quality of network connections will directly affect the crucial inventory management. The ordering system must accurately and quickly notify the factories of the details and quantity of orders, which requires a smooth and safe internal data transmission channel.
This is not a special example. Not only multinational companies, but all large enterprises with many branches have similar requirements.
CITIC Telecom CPC is a comprehensive ICT solution partner for enterprises with more than 20 years of industry experience. Not only does it have global ICT resources, but also provides localized services in different countries and regions. Among the RCEP member states, CITIC Telecom CPC not only has set up dual POP sites in Beijing, Shanghai, and Guangzhou in China, but also possesses Internet POP resources in Japan, South Korea, Malaysia, the Philippines, Thailand, Vietnam, and Singapore. Its capability to serve is strong in the RCEP free trade zone.
With dedicated Network Operation Centers (NOC), capability for technical customer service that supports 7 x 24 x 365 and multi languages are forged, taking into account both international and regional characteristics. If it is a customer’s exclusive account manager, the customer’s geographical and cultural background will be considered more carefully. Every account manager masters at least 3 languages. Take the account managers in South China as an example, they master Cantonese apart from two international languages, Mandarin and English, to better provide customers with solicitous and meticulous Managed Service Provider (MSP) services and ensure zero communication barriers.
In the new era, the influence of RCEP is growing. CITIC Telecom CPC continues to inherit the spirit of the Silk Road and is committed to providing global enterprises with more innovative, high-quality, and reliable ICT solutions. It fights to become a powerful driving force for enterprises to grasp preferential policies, empowering enterprises to start their journey of "Digital Silk Road".
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