Hard Data Vs. Media: China’s Belt And Road Initiative Has Increased, Not Slowed Investments This Year
14.6% Increase In Investments, 33% Increase In China-Europe Container Volumes
China’s Ministry of Commerce has just released data for the period January-October this year, stating that China invested US$16.17 billion in 57 belt and road countries, in the year to end October, marking a 14.6% increase from a year earlier. Singapore, Indonesia, Malaysia, Vietnam, Laos, United Arab Emirates, Kazakhstan, Thailand, Bangladesh and Cambodia are the main destinations, according to the Ministry.
As a major component part of this, the China Europe Rail network handled 12,605 trips from January-October, carrying 1.22 million 20-foot container units. Those figures were 26% and 33% increases from the same period a year ago, respectively. Both surpassed the full-year totals from last year with two months data left to the year end.
Western media has consistently given negative signals concerning China’s Belt and Road Initiative, suggesting investment has slowed, faced problems, or been cancelled. While these may reflect specific projects, (there have been over 2,500 BRI investments totaling an estimated US$4 trillion) overall these stories are not representative – China’s Belt and Road outbound investment continues to show growth.
What has changed is a shift away from structural investment in road, rail, and ports as projects reach completion, to investments designed to exploit this infrastructure and to provide returns. These include for example the real estate build about to commence at Sri Lanka’s Colombo Port City, the listing of cashflow and profit generating projects via IPOs and a new trend of Chinese minority investments into specific new tech projects such as biotech and air mobility.
The Belt and Road Initiative is now changing focus to cash-flow generation, and with that a new mindset of BRI participation in opportunity development and returns on investment is beginning to develop.
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About Us
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com
