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To be or not to be: Benelux re-emerges from redundancy The Chinese word for Benelux, Bhlieu, elicits blank stares

from most people in the Middle Kingdom. However, many in China will recognize the countries represented in this small customs bloc in northwestern Europe: Belgium, the Netherlands and Luxembourg. Benelux won't become a household name anytime

soon in the East, but its importance could rise if the region boosts logistical ties at home and improves recognition within China. Benelux lost some clout since the formation of the EU,

but lately there has been much more talk within the three countries about focusing more on the bloc, said Philippe Snel, chairman of the board of directors for the Benelux Chamber of Commerce in Shanghai. While a treaty binds the three countries, commerce

officials say the bloc, established in 1948, is largely redun- dant outside a few intellectual property regulations. Busi- nesspeople from the region, however, are homing in on the potential selling points of a better-connected Benelux, Snel said. One of Benelux's primary advantages is that it boasts

Europe's most advanced logistics network. The EU's two largest ports, Rotterdam in the Netherlands and Antwerp in Belgium, are separated by only about 90 kilometers, and the two countries are in talks on merging, Snel said, although he admitted that significant political obstacles remained. If merged, the port would be one of the biggest in the world. Landlocked Luxembourg is positioning itself as an

TOO MUCH OF A GOOD THING: The more Chinese with Australian degrees, the less valuable they are

inland logistics hub behind the two sea ports, which have become congested, said Nicolas Mackel, the consul gen- eral for the Luxembourg consulate in Shanghai. If con- nectivity is improved, cargo that arrives in Antwerp or Rotterdam can be fast-tracked by rail and flown out of Luxembourg's cargo airport. Cargolux, one of Europe's largest cargo airlines, makes 22 cargo flights to China per week from Luxembourg.

Strength in numbers Only recently has the Benelux Chamber of Commerce brought together businesses from across Benelux to dis- cuss attracting Chinese investment. The chamber, with about 300 members, is also networking with Chinese chambers of commerce in the region and collecting previ- ously unavailable trade data. But despite the potential for enhanced connectivity,

Benelux countries are still competing for the same Chi- nese customers, said Guy Wittich, executive director for China at the Netherlands Foreign Investment Agency. Competition will remain intense as long as Chinese investment continues to pour into the region. “Whether there is overlap, or whether we can comple-

ment each other – that, I think, is the big question,” Wittich said.

44 China Economic Review • November 2012

TRAFFIC CONTROL: More than 65% of shipping containers passing through major EU ports will enter or exit the Netherlands or Belgium

known in China and has yet to differentiate itself from the

Netherlands' reputation as a logistics hub or Luxembourg’s posi- tion as a financial center. As a result, price competition is one of Belgium's main

pitches to Chinese companies. Both establishing and operat- ing a company in Belgium are much cheaper than in the other Benelux countries, said Janet Chow, an investment deputy for greater China at the Consulate General of Belgium in Shanghai. “Te Netherlands is a hot country right now. Chinese companies are much more familiar with this country. But this means there is more competition within the Netherlands, and prices are higher,” Chow said. As one of Europe's primary hubs for car export and import,

Belgium also offers an advantage in automobile logistics. Chi- nese car makers including Geely have established bases in the port of Zeebrugge, which sees more vehicles pass through than any other port in the EU.

The platform pitch

Connectivity within Benelux is on the upswing. On the logisti- cal forefront, the three countries are in talks on cooperation that could further enhance the region's appeal as a springboard into Europe (see box). Still, not all Chinese companies are sold on the concept of

jumping into markets such as Germany and France from a Ben- elux base. Efforts by the three countries' consulates, as well as by the Benelux Chamber of Commerce, are increasingly focused on convincing outbound investors to consider Benelux a launching pad into the region as a whole. “It's a process, a very energy-consuming process,” Mackel at



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