Navigating the New Silk Road - Executive Summary from the inaugural Belt and Road Summit
This Executive Summary is jointly produced by the Hong Kong Trade Development Council and McKinsey & Company.
In 2013, China’s President Xi Jinping outlined sweeping proposals aimed at reviving ancient trading routes between Asia, Europe and beyond, through the creation of an overland “Silk Road economic belt” and a “21st century maritime Silk Road.” President Xi’s “Belt and Road Initiative,” perhaps the most ambitious development programme put forward by China, would encompass some 65 countries in Asia, Europe and Africa, which collectively include 4.4 billion people and claim a gross domestic product of US$21 trillion.
As a key driver of this plan, the Chinese government has agreed to underwrite the development of infrastructure in Belt and Road countries through multilateral institutions and policy banks as well as China’s state-owned firms. In 2014, China established three new financial entities, two with international support: the Asian Infrastructure Investment Bank (AIIB), which includes 57 founding members and has a registered capital of US$100 billion; the New Development Bank, also known as the BRICS bank, and which includes Brazil, Russia, India, China and South Africa, with an initial capital of US$50 billion; and the Silk Road Fund, financed primarily from China’s foreign reserves, with an initial capital of US$40 billion. Furthermore, China’s two policy banks, the China Development Bank and the China Export-Import Bank, are expected to provide substantial funding for Belt and Road-related projects, as are large state-owned lenders such as the Bank of China.
In spite of these resources however, the vast scope of the Belt and Road Initiative leaves ample opportunity for participation by other governments and the private sector. To explore these opportunities, the first ever “Belt and Road Summit” was held in Hong Kong on 18 May 2016, organised by the Government of the Hong Kong Special Administrative Region and supported by China’s Ministry of Foreign Affairs, the National Development and Reform Commission, the Ministry of Commerce and the People’s Bank of China, in association with the Hong Kong Trade Development Council. The honourable presence of Mr Zhang Dejiang, Chairman of the Standing Committee of the National People’s Congress of China, together with the support of the four Chinese ministries, is the first official endorsement of Hong Kong’s position and roles in the Belt and Road Initiative.
This definitive event brought together more than 2,400 government officials, business leaders and experts from around and beyond the Belt and Road economies for a day of discussion, debate and business-matching. It demonstrated Hong Kong’s ability to host a truly international business forum to facilitate the Initiative.
Why Hong Kong? We believe that Hong Kong is the ideal springboard to begin your exploration of Belt and Road business opportunities. As Asia’s financial and logistics hub, Hong Kong has a history in international trade, a stable legal system
and free flow of capital, information and people – all of which make our city the ideal place to commercialise opportunities from the Initiative.
To help you navigate the Belt and Road, we are pleased to bring you this report, which highlights some of the Summit’s proceedings and identifies major themes and areas for further consideration. Beyond the event, you can also visit our resource portal www.beltandroad.hk for further information on the Belt and Road, insights from business leaders and policymakers and a database of relevant advisors who can help.
In ancient times, the Silk Road connected people, created new opportunities and advanced development of nations through trade, commerce and cultural exchange. Likewise, we hope the Belt and Road Initiative will do all these and more. Beginning with the Belt and Road Summit, we invite you to join us on this momentous journey together for many decades to come.
Vincent H S Lo, GBS, JP
Hong Kong Trade Development Council
Please click to read full report.