If not the world, Asia is definitely Chris Devonshire-Ellis’s oyster. By his own admission, he likes to spend winters in Sri Lanka and summers in Mongolia and Russia. When I caught up with him, he was in his office in Singapore. In China, he founded his company, Dezan Shira & Associates, in Shenzhen in 1992 and today, it is a behemoth with 25 offices in seven countries and regions across Asia. They provide multifaceted services, from market entry to foreign investors to HR and technology for businesses and individuals in China, India, ASEAN member countries, Russia, and other countries along the Belt and Road.
Dezan Shira & Associates is a pioneering legal firm with a colorful history and Chris has cornered a well-ensconced niche as one of the earliest “legally responsible persons” on the Chinese mainland. When he founded the company, there were no lawyers, only “legally responsible people.” To be one of them, Chris, who hailed from British shipyard owning gentry in Devonshire, had to master intricacies of Chinese law at a public library in Hong Kong in the evenings to pass the exam to get a license. Then he took the test in Guangzhou, cleared it, and got his license, setting up a representative office in a hotel as that was the law then.
The recent Ukraine crisis has gripped the attention of the world. In the middle of this crisis, we asked Chris about the impact it could have on the Chinese economy and the Belt and Road Initiative (BRI), especially as the main overland route of the initiative, going to Europe from China via Central Asia, Russia, and Belarus, is now facing disruptions.
The China-Europe Railway, a major BRI project, links Chinese cities with 23 countries and 175 cities in Europe. Last year, the China-European Union traffic jumped up by over 100 percent with a record 15,183 train trips on the Eurasia route and 1.46 million TEU containers transported, according to Chinese rail authorities. The conflict and sanctions on Russian and Belarusian ports and other business entities are likely to see considerable disruptions if the situation continues to fester.
For example, Zyxel Communications Corp, a maker of routers and switches based in the Taiwan region, recently announced it had stopped shipping to Europe by China Railway due to the conflict. Ukraine’s Odesa Port has been closed, and Danish shipping giant Maersk announced it was selling its over 30 percent share in Russian port operator Global Ports Investments.
Chris, like all legal professionals, is cautious and believes it’s too early to get a bearing on things with certainty. However, a realignment of the Belt and Road and supply chains between the East and West is on the cards since businesses will seek out other routes. The Suez Canal, a well-known and well-trusted alternative, is still operational. Besides, he foresees secondary routes coming to the fore.
He mentions two options specifically. One is developing the southern route of the Belt and Road passing through Central Asia and then going through the Caspian Sea region. Shipments can pass through the Port of Baku in Azerbaijan, proceed to Kazakhstan’s western Aktau Port, then cross Uzbekistan and subsequently Georgia and Turkey to reach the Black Sea. From there, there are multimodal routes to southern Europe. Though this southern route of the Belt and Road has “some inefficiencies at present” and needs a lot of infrastructure improvement, he says with investment it can become a trade and investment hotspot.
The second one is the International North-South Transport Corridor. This is an over 7,000-kilometer ship, rail, and road corridor running from South Asia, especially Mumbai in India, through Baku, Iran’s Chabahar Port, the Middle East, and then reaching East Africa.
All this of course has geopolitical implications. Leaving aside Iran and changing relations between China and India, what impact could the Russia-Ukraine conflict have on China-EU business relations, given that many Western countries are unhappy that China did not agree to sanction Russia, nor did it vote to support the resolution at the United Nations General Assembly demanding that Russia “immediately, completely, and unconditionally withdraw all of its military forces from the territory of Ukraine within its internationally recognized borders?”
This is literally a trillion-dollar question.
In 2021, China-EU trade amounted to US $800 billion while the EU’s trade with Russia in goods notched up a respectable US $200 billion. Chris’s take is: “I think this will have impacts on the EU’s Global Gateway Initiative, which is being portrayed as a competitor to China’s Belt and Road Initiative, but rather than competition, we are going to see more cooperation. This has actually already started to happen.”
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