Ball is in Europe's court now

APEC meet in Beijing created major opportunities for EU business community to invest

The latest APEC conference in Beijing has just wrapped up, but has it been just another meeting among Asia-Pacific leaders? It has not. This Beijing conference, with the theme of "partnership" and "togetherness", perhaps marks the first major step toward a more harmonious Asia-Pacific and more economic integration across the region.

The European economy, still sluggish at best, could not have received a greater boost.

On the political front, substantial progress has been made with what were tense relations between many of the Asia-Pacific's major economies. Hence, a more stable region is now likely. Even the United States now appears to welcome the rise of China after a very public statement from US President Barack Obama.

A handshake, albeit lukewarm, between President Xi Jinping and his Japanese counterpart Shinzo Abe at this meeting also signified major progress in diplomatic relations between these drivers of economic development across the region. Furthermore, Xi and Abe met for formal talks after more than two years of tensions over Japanese wartime atrocities and territorial disputes.

European businesses should interpret these developments positively. This latest Beijing APEC meeting represents a great advertisement for European investment in the Asia-Pacific region.

In addition to real progress in government relations across the region and between the US and China, the Beijing APEC meeting led to further discussion and development of a number of exciting initiatives that will boost trade and investment across the Asia-Pacific region.

That is excellent news for European business, especially those with current or future plans of expanding across the Asia-Pacific.

The China-led Asian Infrastructure Investment Bank is just one of these numerous initiatives discussed and developed further at the meeting. Even leaders of the World Bank now acknowledge the legitimacy of this new investment bank, despite initial doubts.

Such a regional and infrastructure-focused investment should lead to major and imminent economic growth across Asia's poorer areas. Infrastructure development is that essential building block to sustainable and rapid industrialization.

As a result, European businesses should now be following developments in the region and activity at the AIIB closely. Many of Asia's poorer countries will now present attractive investment and trade opportunities with AIIB-financed seed capital. European businesses now have a real opportunity to expand deeper into the Asia-Pacific with the opportunity of securing the often highly prized first-mover advantage.

AIIB discussions at this Beijing APEC meeting also repeated the request for private capital to form part of the bank's initial infrastructure-focused investment funds. This poses another opportunity for European investors.

But what should excite and energize European business most is another China-led initiative discussed at the Beijing APEC meeting: a free trade area across the entire Asia-Pacific region.

In fact, this meeting's theme of partnership and economic integration permeated and steered just about every debate and discussion that took place.

In my experience, working with European businesses and their Asia expansion plans has often involved an extremely piecemeal, disjointed approach to the region. But for the first time there now appears to be a definite path toward significant economic integration across the Asia-Pacific region. European businesses can, therefore, now alter their approach and mindset where Asia is concerned and begin to plot a more "joined-up" expansion strategy.

China's vision of a free trade area across the Asia-Pacific region by 2025 represents not just an exciting, ambitious objective that will lead to even greater investment and trade opportunities. Most significantly, this initiative signifies a strategy of real engagement by China across the Asia-Pacific region and the world.

The engine of growth across Asia, China rightly has taken the lead in putting together a much-needed pathway to economic integration with all the investment and trade benefits that should result.

It is imperative that European businesses seize the opportunity to not only invest further across the Asia-Pacific region, in readiness for this increased integration and the resulting benefits, but to form a firm base on the Chinese mainland. It is China that will establish itself, if it hasn't already, as the central economic hub of the region.

This latest Beijing APEC meeting has also served to confirm China's pivotal position as the economic and trade engine across Asia.

China has also been careful not to dismiss and potentially disband existing economic integration plans and schemes, even though these lack ambition, clarity and inclusiveness.

Specifically the US-led Trans-Pacific Partnership has at least contributed to the debate on Asian economic integration. But with only 12 of the 21 APEC members on board, any TPP progress toward an all-inclusive Asia-Pacific trading agreement appears highly uncertain.

But China's Asia-Pacific Free Trade Area plans have allowed for TPP participants to bring their experience and progress to the table. And this is despite the fact that China was excluded from the TPP from the outset at the US' behest.

The US has learned a salutary lesson in Asian economic integration: China and only China should be the driving force.

Further China initiatives discussed at this Beijing APEC meeting, aimed at economic integration and trade liberalization across Asia, also confirm China's position in the driver's seat. In particular, APEC members welcomed progress made with China's New Silk Road and its Maritime Silk Road plans. Both of these initiatives aim to establish massive trade and infrastructure networks connecting the Asia-Pacific region and Europe.

At the meeting it was announced that China plans to create a $16.3 billion fund in order to build and expand railways, roads and pipelines across China, as part of the modern New Silk Road project. This should expedite much-needed development across China's poorer western provinces.

China also announced plans to invite investment from other countries for both of the Silk Road projects.

For the European business community, now could be the time to invest. It should invest in those poorer Chinese provinces, too, with the aim of establishing a bridgehead position that could prove important long into the future.

The Beijing APEC meeting has more than lived up to expectations. The meeting theme of "partnership" and "harmony" across the Asia-Pacific region has led to fresh momentum and a clear direction toward long-term economic integration that can only be good for the region and the global economy.

In particular, China welcomed investment and partnership from countries and companies outside the Asia-Pacific region.

All eyes are now on the US and European business communities and their Asia-Pacific expansion plans. The message from China and the Beijing APEC meeting is clear: You will never get a second chance to establish first-mover advantage.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer in marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.

(China Daily European Weekly 11/14/2014 page10)