Belt and Road Initiative 2.0

Peter Wong, Deputy Chairman and Chief Executive, The Hongkong and Shanghai Banking Corporation Limited

 

Friction over trade between the world’s two largest economies naturally captures the attention of the business and investment community. The fact that cross-border trade within Asia is already much bigger than Asia’s exchange of goods and services with the U.S. or Europe makes fewer headlines, but is no less important.

 

It begs the question of what kind of networks, relationships and institutions will shape the future of international trade – and the answer to this question is beginning to emerge.

 

In partnership with China, which we expect to become the world’s biggest economy by 2030, a growing number of countries are rejecting economic isolation and beginning to work together to develop a new kind multilateralism.

 

While this process is in its infancy, I believe that a more collaborative approach to connecting economies that is built around growth in Asia has the potential to be the world’s biggest driver of cross-border trade and investment in the decades ahead.

 

Such a dynamic would clearly be an historic opportunity for business and investors everywhere. In order to outline how this could take shape, it is worth considering some context.

 

Asia’s growth over the past half-century has been remarkable. What holds back the world’s most populous region from achieving even greater prosperity is not ambition, entrepreneurialism or a skilled workforce: it is connectivity. This means physical infrastructure such as railways and ports as well as the many other ways that trade is facilitated, such as customs arrangements, digital links and as people-to-people connections.

 

The shift towards a more connected global economy is already underway – and the catalyst is China. In 2013, President Xi Jinping stated China’s intention to “forge closer economic ties, deepen cooperation and expand development space in the Eurasian region.”[1] This was the origin of the Belt and Road Initiative (BRI), which has been widely regarded since that time as a series of infrastructure projects – and which has raised concerns that those projects created “debt traps” for developing countries and that the BRI was essentially closed to non-Chinese businesses.

 

The BRI was never intended as a simply philanthropic aid initiative; the pragmatic calculation behind it is that helping other countries to grow will contribute to China’s own growth. But this can only work when there is broad international engagement with the BRI.  The Second Belt and Road Forum for International Co-operation, held in Beijing in late April, marked the launch of BRI 2.0.

 

“We need to be guided by the principle of extensive consultation, joint contribution and shared benefits,” President Xi told 36 national leaders and some 5,000 delegates – including myself – at the Forum.[2]

 

China’s commitment to a more transparent BRI addressed concerns about debt sustainability and exclusivity, winning support from countries such as Malaysia that had previously expressed concerns. It also enables a new wave of international collaboration and recognizes that the BRI cannot thrive without it.

 

This approach is proving effective. Our discussions suggest that at least 100 countries are now involved in the BRI, which reaches as far south as New Zealand, as far west as the UK, and as far north as the Polar Silk Road.

 

International engagement like this makes a great deal possible.

 

It broadens the spectrum of financing available for BRI projects. Developing Asia alone requires estimated infrastructure investment of USD1.7 trillion a year.[3]  China’s ability to mobilise hundreds of billions of dollars of financing through its policy banks is unique, but meeting needs on this scale will require global private sector capital from institutional investors, commercial banks and multilateral lenders.

 

International support also opens the door for more companies to participate in the BRI. A high quality, more inclusive BRI is good news for global firms in engineering, project design, professional services and many other sectors. It’s especially meaningful for firms from countries like Japan, France, Australia, Italy and Singapore that have signed “third-party market co-operation” agreements with China under which their firms will partner with Chinese companies to build infrastructure in emerging markets.

 

And in the supply chains for BRI projects, there should also be more opportunities for local companies and workers, ensuring that the BRI’s benefits are more broadly distributed in the markets it touches.

 

Six years since its inception, the BRI has proved itself to be a powerful catalyst for growth in cross-border trade and investment. According to official data, the value of trade in goods between China and other Belt and Road countries in 2018 reached 1.3 trillion US dollars, growing by 16.4 per cent year on year.[4]

 

The BRI is also strengthening forms of connectivity that go well beyond physical infrastructure, demonstrating that it was always about more than transportation and energy projects. For example, the value of goods going through China Customs’ e-commerce platform rose by 50 per cent last year, while China signing mutual visa exemption agreements for different types of passports with 57 Belt and Road countries. [5]

 

As it energizes business and investment, the BRI is bringing together networks of trade and investment that are beginning to reveal the outlines of the new multilateralism. This system already has some institutions – such as the Asian Infrastructure Investment Bank – and is beginning to develop its own standards, such as the Green Investment Principles for Belt and Road. However, the BRI is a multi-decade strategy and it will need to involve more institutions and standards to ensure its long term success.

 

Indeed, these are still early days in the evolution of a new network built on ancient routes that has China and Asia at its centre, but which extends to the rest of the world. International participation in the BRI is going to be vital, both for the success of the Initiative itself and as an opportunity for companies and investors everywhere. China’s progression to BRI 2.0 brings that international participation – and the new multilateralism that comes with it – one step closer. While trade tensions may be with us for a while yet, this new phase for BRI is a reason to be optimistic about the future of global trade and investment.

 

(end)

更多文章

2020年08月03日 香港上海汇丰银行有限公司
By Mukhtar Hussain, Head of Belt and Road Initiative and Business Corridors, Asia-Pacific, HSBC Belt and Road Initiative offers solid framework for countries big and small to overcome the economic damage caused by pandemic The Covid-19 pandemic has caused a crisis for every economy. At the same time, it has also created an opportunity for the Belt and Road Initiative to prove its value as an international partnership that serves the international good. Amid a fragmented global response to the virus, this network of 138 countries is uniquely positioned to channel trade and investment to developing countries that lack the resources to revive their own economies. China cannot do this by itself, though: no country can. If the initiative is to deliver on its potential to support global recovery, it must be a collective effort. It must also live up to the high standards it has set itself for transparency and sustainability. The International Monetary Fund estimates that some U
By Mukhtar Hussain, Head of Belt and Road Initiative and Business Corridors, Asia-Pacific, HSBC Belt and Road Initiative offers solid framework for countries big and small to overcome the economic damage caused by pandemic The Covid-19 pandemic has caused a crisis for every economy. At the same time, it has also created an opportunity for the Belt and Road Initiative to prove its value as an international partnership that serves the international good. Amid a fragmented global response to the virus, this network of 138 countries is uniquely positioned to channel trade and investment to developing countries that lack the resources to revive their own economies. China cannot do this by itself, though: no country can. If the initiative is to deliver on its potential to support global recovery, it must be a collective effort. It must also live up to the high standards it has set itself for transparency and sustainability. The International Monetary Fund estimates that some U
2019年05月24日 香港上海汇丰银行有限公司
15 May 2019   Policies targeting key priority areas have been instrumental in China’s economic transformation over the past 40 years, according to HSBC Group Chairman Mark Tucker. Mr Tucker was speaking at the sixth annual HSBC China conference in Shenzhen – a city that embodies the impact of targeted policies. Shenzhen’s Special Economic Zone was first established in the 1980s to stimulate private-sector businesses. It has helped the city grow from a small fishing village into “a bustling metropolis…and the birthplace and home of China’s leading tech companies,” Mr Tucker said. Other policies supporting the country’s continued development include opening up China’s capital markets, the Greater Bay Area and the Belt and Road Initiative, according to Mr Tucker. The Greater Bay Area is designed to foster closer economic ties between Hong Kong, Macau and cities in mainland China including Guangzhou and Shenzhen. The Belt and Road Initiative supports
15 May 2019   Policies targeting key priority areas have been instrumental in China’s economic transformation over the past 40 years, according to HSBC Group Chairman Mark Tucker. Mr Tucker was speaking at the sixth annual HSBC China conference in Shenzhen – a city that embodies the impact of targeted policies. Shenzhen’s Special Economic Zone was first established in the 1980s to stimulate private-sector businesses. It has helped the city grow from a small fishing village into “a bustling metropolis…and the birthplace and home of China’s leading tech companies,” Mr Tucker said. Other policies supporting the country’s continued development include opening up China’s capital markets, the Greater Bay Area and the Belt and Road Initiative, according to Mr Tucker. The Greater Bay Area is designed to foster closer economic ties between Hong Kong, Macau and cities in mainland China including Guangzhou and Shenzhen. The Belt and Road Initiative supports
2017年09月01日 香港上海汇丰银行有限公司
Peter Wong, Deputy Chairman and Chief Executive, The Hongkong and Shanghai Banking Corporation Limited In the wake of more isolationist political thinking in the West, with many developed economies turning inward, China is reaching out, seeking stronger trade and investment links with its economic partners. China’s Belt and Road initiative (BRI) is a prime example of this reaching out policy. Under the initiative, China aims to trigger demand for materials and goods at home by investing in strategic infrastructure projects abroad, growing economic ties along its old Silk Road to Europe and along newer maritime links in and around Asia and as far away as Africa, covering all potential points in-between. At its heart, the plan is to enhance global supply chains primarily through debt-financed infrastructure projects, across more than 60 countries. China expects annual trade with these countries to be worth US$ 2.5 trillion within a decade [1] – up from US$ 1 trillion in 2015
Peter Wong, Deputy Chairman and Chief Executive, The Hongkong and Shanghai Banking Corporation Limited In the wake of more isolationist political thinking in the West, with many developed economies turning inward, China is reaching out, seeking stronger trade and investment links with its economic partners. China’s Belt and Road initiative (BRI) is a prime example of this reaching out policy. Under the initiative, China aims to trigger demand for materials and goods at home by investing in strategic infrastructure projects abroad, growing economic ties along its old Silk Road to Europe and along newer maritime links in and around Asia and as far away as Africa, covering all potential points in-between. At its heart, the plan is to enhance global supply chains primarily through debt-financed infrastructure projects, across more than 60 countries. China expects annual trade with these countries to be worth US$ 2.5 trillion within a decade [1] – up from US$ 1 trillion in 2015
2017年07月21日 香港上海汇丰银行有限公司
By Gordon French, Head of Global Banking and Markets, Asia Pacific, HSBC Perhaps it’s inevitable that interest in China’s Belt and Road Initiative tends to revolve around the railway lines, ports and highways that will be constructed in its name. These are the most visible manifestations of the “Belt and Road,” and they evoke beguiling images of the ancient land and sea routes along which silk was once transported from Xi’An to St Petersburg, or tea from Guangzhou to Rotterdam. But sometimes it is the financial dimension of infrastructure in Asia that stands out – because of the sheer scale of what is required. The Asian Development Bank expects emerging Asia to need about US$26 trillion of infrastructure investment between 2016 and 2030. That amounts to US$1.7 trillion a year – and that’s just in Asia, while the Belt and Road encompass Africa and Europe as well. [1] Financing this colossal need for transport, telecoms and energy infrastructure across more t
By Gordon French, Head of Global Banking and Markets, Asia Pacific, HSBC Perhaps it’s inevitable that interest in China’s Belt and Road Initiative tends to revolve around the railway lines, ports and highways that will be constructed in its name. These are the most visible manifestations of the “Belt and Road,” and they evoke beguiling images of the ancient land and sea routes along which silk was once transported from Xi’An to St Petersburg, or tea from Guangzhou to Rotterdam. But sometimes it is the financial dimension of infrastructure in Asia that stands out – because of the sheer scale of what is required. The Asian Development Bank expects emerging Asia to need about US$26 trillion of infrastructure investment between 2016 and 2030. That amounts to US$1.7 trillion a year – and that’s just in Asia, while the Belt and Road encompass Africa and Europe as well. [1] Financing this colossal need for transport, telecoms and energy infrastructure across more t
2017年06月27日 香港上海汇丰银行有限公司
By Stuart Tait, Group General Manager and Regional Head of Commercial Banking, Asia Pacific With protectionism threatening to dim Europe’s economic lights, Southeast Asia – fuelled by its nation-building infrastructure activity - could be the commercial catalyst that European corporates need. --------- If a spending deficit of US$1.2 trillion in six key Asian economies and a rising tide of protectionist rhetoric in Europe don’t seem the most promising combination of business prospects, think again. Add in China’s ambitious Belt and Road Initiative, and together they make a compelling case of the potential for a multi-year boom in investment and construction that will create entirely new economic ecosystems. Belt and Road at its most basic is a strategy to build the transport links and logistics capacity to boost the flow of trade between China and more than 65 countries in Asia, the Middle East, Africa and Europe to an estimated US$2.5 trillion annually in the co
By Stuart Tait, Group General Manager and Regional Head of Commercial Banking, Asia Pacific With protectionism threatening to dim Europe’s economic lights, Southeast Asia – fuelled by its nation-building infrastructure activity - could be the commercial catalyst that European corporates need. --------- If a spending deficit of US$1.2 trillion in six key Asian economies and a rising tide of protectionist rhetoric in Europe don’t seem the most promising combination of business prospects, think again. Add in China’s ambitious Belt and Road Initiative, and together they make a compelling case of the potential for a multi-year boom in investment and construction that will create entirely new economic ecosystems. Belt and Road at its most basic is a strategy to build the transport links and logistics capacity to boost the flow of trade between China and more than 65 countries in Asia, the Middle East, Africa and Europe to an estimated US$2.5 trillion annually in the co
2017年05月15日 香港上海汇丰银行有限公司
王冬胜 香港上海汇丰银行有限公司副主席兼行政总裁   要真正理解国家“一带一路”战略,我们不能只着眼于基础建设,而应以更广阔的视野去看这个宏大的蓝图。 “一带一路”无疑涉及大量基础建设,例如高速公路、铁路、大桥等等,这些建设将促进中国与邻近国家,以至欧洲、非洲及中东国家的贸易。 “一带一路”借着促进国际货物和服务流通,推动区域贸易和合作。预料于未来十年,中国与沿线逾六十个国家的年贸易额将由2015年的约1万亿美元,跃升至超过2.5万亿美元。 现时环球贸易增长乏力,“一带一路”犹如一枝强心针,也符合国家致力推动人民币国际化,以及行之已久的鼓励中国企业「走出去」的政策。 “一带一路”不单关乎中国,对其他国家也将带来深远影响。庞大的基建投资对没有足够资金和技术自行发展�
王冬胜 香港上海汇丰银行有限公司副主席兼行政总裁   要真正理解国家“一带一路”战略,我们不能只着眼于基础建设,而应以更广阔的视野去看这个宏大的蓝图。 “一带一路”无疑涉及大量基础建设,例如高速公路、铁路、大桥等等,这些建设将促进中国与邻近国家,以至欧洲、非洲及中东国家的贸易。 “一带一路”借着促进国际货物和服务流通,推动区域贸易和合作。预料于未来十年,中国与沿线逾六十个国家的年贸易额将由2015年的约1万亿美元,跃升至超过2.5万亿美元。 现时环球贸易增长乏力,“一带一路”犹如一枝强心针,也符合国家致力推动人民币国际化,以及行之已久的鼓励中国企业「走出去」的政策。 “一带一路”不单关乎中国,对其他国家也将带来深远影响。庞大的基建投资对没有足够资金和技术自行发展�