Paola Garbini

Welcome, everybody. My name is Paola Garbini, and I'm looking after marketing for Europe here at Oliver Wyman. And I'm so pleased to be joined today by our partner in Hong Kong, Ben Simpfendorfer. And we're going to talk about the growing ties between Asia and the Middle East. So, Ben, let's kick us off. The Silk Road is so important for businesses today. Why is that?

Ben Simpfendorfer

The Silk Road has changed fundamentally over the last five years. The story used to be about a simple exchange of goods. Today, it's so much more important than that. The region accounts for half of global growth. It's going faster than most advanced economies, and at the same time, the flow of goods is no longer just consumer goods for oil.

It's about the flow of talent, of technology and of capital. And so for any CEO or board member, when they're thinking about the next stage in their company's growth, they need to be thinking about the Silk Road as a part of that vision.

Paola

And Silk Road countries are actually driving change themselves, right?

Ben

They absolutely are. So we're seeing unique ways that the Asian Middle East economies are connecting with each other, whether it's climate change and Korea investing into green energy opportunities or green hydrocarbon opportunities in Oman, or whether it's China and Saudi Arabia, the Chinese gaming companies investing into Saudi opportunities is really a very exciting time.

Paola

That's super interesting. And actually, I was wondering, given the worry of the globalization, what type of opportunities can be provided to global companies in this context?

Ben

So the New Silk Road is still highly connected. Nearly 60% of goods traded within the region stay within the region. And that's important at a time of deglobalization. The region's economies are committed to free trade agreements, whether it's CPTPP, or whether it's RCEP. And that's fabulous news at a time of global tensions. Companies are finding new ways to trade with each other, not just goods again, but it's talent, technology, capital.

And that's whether it's a Chinese gaming company investing into Saudi Arabia or a Korean green hydrocarbon company investing into Oman. So these types of opportunities are quite unique and quite exciting at a time of genuine global disruption.

Paola

It all sounds fascinating and it looks like there's so much change and excitement happening as well in the region. Do we need to be aware of any pitfalls?

Ben

We certainly do. We held an executive roundtable just recently in Dubai. And some of the points executives raised is that for all the excitement, we have to recognize that the region isn't homogenous. There's great diversity. So companies need to develop strategies that are both regional, but also recognize local differences and to ensure that we build the bridges between those differences.

That's how we can really achieve impact with our visions. At the same time, we need to see some standardization of rules and free trade agreements moving in the right direction, but certainly more that can be done. And so governments will have a fundamental role to play in making trade along the New Silk Road easier for private companies.

Paola

Thank you for sharing this with me. I have one last question that is a bit more personal. I know you've been working and living in Hong Kong for a long time. You also wrote a book about the Silk Road, I think around ten, 12 years ago or something. So maybe time for our renewed version. What about the city itself? How have you seen it develop and change? And also, where did you learn Chinese?

Ben

So look, Hong Kong is a fabulous city that really has developed over the last 20 years plus that I've lived there. It's an exciting part of the New Silk Road. We had just recently a chief executive. Many sort of senior government officials, company leaders all visit the Middle East because of the excitement around the opportunities to bridge relations, in particular between China and the Middle East, where I live in Chinese in Hong Kong, of course, I work for ten years as a China economist at investment banks, but I actually started my career out in the Middle East, living in in the Levant and very passionate about both regions.

Paola

Ben, thank you so much for spending some time with me today. And thank you all for watching.

This transcript has been edited for clarity.