Denis Depoux is a veteran of China’s business scene, an expert with a unique viewpoint – at once insider and outsider.
Depoux heads the Asian arm of global consultancy Roland Berger. The Frenchman, who first lived and worked in China more than 20 years ago, is an expert in the global energy market and an adept and insightful commentator on China’s role in the world – and particularly its relationship with Europe.
I meet up with him at the Boao Forum for Asia, grabbing a half-hour interview before he headed to the airport after three days of discussing Asia’s role in globalization.
Denis Depoux speaks to CGTN at the Boao Forum for Asia 2017. /CGTN Photo
Upbeat and chatty, he speaks enthusiastically about China’s flagship Belt and Road Initiative. But do politicians and business leaders in Europe really get it?
“No, I don’t think they do. I think it’s still very remote. I don’t think that people really understand what is behind it, especially in Europe. I don’t think they understand that at the end of the Road – is Europe! And that Europe probably has opportunities. I do believe that Europe has opportunities in that respect, America as well.”
Depoux believes these opportunities lie in the difficulties in operating overseas, complying with new regulations and engaging a foreign workforce to replicate success and working practices at home.
“I am quite skeptical of the capabilities of many large Chinese companies, especially in the infrastructure and the energy sector to be massively successful in building all this infrastructure. Simply the experience of building complex infrastructure outside of China, with different regulators, with different governments… It’s not as simple as it looks.”
China has no problem building cutting-edge technology, he emphasizes. But doing it overseas? “It’s about doing technology, first of its kind, outside its own country. With different types of suppliers and with regulators that are not necessarily super nice.”
Is the EU receptive to the Belt and Road? “As a bloc, the European Union on this subject – like on many others – is a bit unresponsive, even though the EU itself is pledging for massive infrastructure investment.”
Denis Depoux speaks to CGTN at the Boao Forum for Asia 2017. /CGTN Photo
The energy market industry is Depoux’s specialty. He advises leading European and Asian players on low-carbon energy and energy efficiency, and has consulted on major mergers in the energy sector. How does energy factor into the Belt and Road?
“The first objective of China is to ensure its safety of supply. Because it’s one thing to pledge a low-carbon economy and pledge to reduce CO2 emissions, it’s another thing to replace all that mountain of coal that China is consuming. And the pledge is there and it’s actually happening.
“China is taking a lot of coal out of its energy mix. But what is it replaced with? It is replaced with renewable energy, that’s for sure, but it is also replaced with natural gas, which will jump to 15 percent of the energy mix.
“But that natural gas doesn’t come from China. At least not yet, and probably not in the foreseeable future. China is increasing its imports of gas, so it has to secure those resources. Obviously in Central Asia there are a lot of gas resources to be secured.”
Denis Depoux speaks to CGTN at the Boao Forum for Asia 2017. /CGTN Photo
And then Depoux mentioned something I had never heard of. The Internet of Energy.
China’s State Grid Corporation established a company at the end of 2015 to develop a "global energy Internet." The company is considering an ultra-high voltage transmission network among Asian countries, and also between Asia and Europe as well as Africa and Europe. Depoux is clearly excited by the project.
“The other thing is these massive plans to build the Internet of Energy. So to build these electricity highways with ultra-high voltage direct current or alternative current power lines basically from China to different countries.
“It sounds really, really far away, but it’s not that far away. At least in China, such power lines are built. So having an even higher voltage power lines network that would enable interconnecting China even more with a wider region makes sense. And that wider region is precisely One Belt One Road.”
Denis Depoux speaks to CGTN at the Boao Forum for Asia 2017. /CGTN Photo
The conversation shifts to domestic issues. China has announced new plans to encourage foreign investment, pledging new free trade zones and a level playing field for foreign and domestic companies.
Depoux is pleased that the message was repeated at Boao. But what can the government do, specifically, to appeal to foreign companies?
“They should shy away from direct incentive support. That’s going to be temporary and the day it goes away it will create havoc. At least that they shouldn’t do. Now what they should do is to guarantee opportunity in this big transformation program that is Made in China 2025, that is One Belt One Road.
“That I think has to be fully open, and I think that is a pledge by Miao Wei, the minister of industry, it’s a pledge by MOFCOM I’ve heard here in Boao, that all this is open to foreign companies. That’s very important.”
Denis Depoux speaks to CGTN at the Boao Forum for Asia 2017. /CGTN Photo
And the Chinese economy? On course to hit the “around 6.5 percent” target?
“It’s meaningless!” Oh, really? “I do think it’s realistic, but I don’t think the figure matters, actually. My point of view is that that view is concealing the vast differences between double-digit growth in some provinces or sectors, and recessions in other sectors or other provinces.
“Percentage points are not really telling the truth. The truth is that 6.5 percent is in the vicinity of 750/800 billion US dollars. That’s one third of Germany, or one fifth of France. At this so-called slow rhythm, China is adding… one Netherlands in one year!
“What is more important than the figure itself, which I think is meaningless, is the underlying transformation. So the shift to services, the speed at which some services employment can replace all the employment that is being lost in the over-capacity sectors.”
Depoux was tight-lipped on the French election, but with his assistant gesturing at her watch and a plane to catch he had one final piece of wisdom to impart.
“What is for sure is that there is a new world order economically, and possibly politically, in the making.”
