Summary: Welcome to BLP’s ‘Belt and Road Insights’ April 2017 issue – a selection of interesting Belt and Road news items, distilled into a monthly ‘speed read’.
Updates from the New Silk Road
The Belt and Road Initiative is a major development strategy launched by the Chinese government in September 2013 to sponsor and promote economic co-operation among countries along the proposed Belt and Road routes. With our focus on built environment and infrastructure development, we aim to keep you updated on the latest developments.
1.Over 20 heads of state to attend May Belt and Road Forum for International Cooperation
Between the 14 -15 May, Beijing is set to host its Belt and Road forum for international cooperation. As the largest diplomatic event to be hosted by Beijing this year, the forum will see over 20 heads of state, 50 leaders of international organisations and over 1,200 delegations from across the globe in attendance. With the Belt and Road initiative over three years old, the forum is viewed as an opportunity for Xi Jinpeng to revitalise support among delegates for interconnected development, encourage international cooperation and tackle issues facing the global and regional economy.
According to the China’s Ministry of Commerce, in 2016 China direct investment in countries along the Belt and Road route totalled USD14.43 billion.
2.Silk Road Fund targets investment opportunities in Europe
China’s Silk Road Fund is looking for investment projects in Europe. The vice-president of the European Investment Bank ("EIB"), Jonathan Taylor, has confirmed that discussions between EIB and the fund are under way and that European Commission representatives are expected to attend the Belt and Road summit in May, which is examined in more detail in the article above. In a sign of things to come, it was confirmed earlier this month Prime Minister Theresa May would also be attending the summit, hoping to lure Chinese investment to the U.K. in the wake of the Brexit vote.
Whilst the Silk Road Fund already has relationships with lenders in France and Russia, the fund is yet to establish a real presence in Europe. This new co-operative relationship between the lenders is a sure way to achieve that. As well investing in Europe, EIB is aiming to invest a further 500 million euros into new projects in China, with a clear focus on energy efficiency and green energy. EIB’s commitment to China will no doubt help build stronger commitments to the Silk Road in Europe.
3.Hong Kong explores Belt and Road connected investment opportunities in Myanmar
The Belt and Road initiative has the potential to dramatically boost Myanmar’s economy and provide new opportunities for Hong Kong investors. In recognition of this, the Hong Kong Trade Development Council led a delegation to Myanmar to meet with businesses, investors and government departments.
The initiative’s focus on infrastructure and its proposal to establish a China-Myanmar-Bangladesh economic corridor will provide a strong boost to Myanmar’s economy. Hong Kong, with its strong professional services base, is in the prime position to take advantage of the investment opportunities that will arise out of this. Hong Kong’s strength in real estate, construction, engineering and planning places Hong Kong in a good position to play a large role in the development of Myanmar’s infrastructure.
The true key to Myanmar’s success in attracting investors, however will lie in how well the government, still transitioning to democracy, promotes itself and helps investors to establish themselves efficiently in Myanmar.
BLP recently opened its first office in Yangon and its team practice both local Myanmar and international law advice.
4.India maintains its reservations over China’s Belt and Road Initiative
As currently reported, New Delhi has yet to accept its invitation from Beijing to attend the May Belt and Road international forum. India to date has offered a relatively lukewarm reception to the Belt and Road Initiative, with the government’s official objection being the China-Pakistan Economic Corridor ("CPEC") violating India’s sovereignty by travelling through the disputed region of Kashmir.
With reports of Russia and Iran looking to join the CPEC, China has made a concerted effort to secure India’s participation at the forum in order to promote the agenda of developing the necessary road, rail and port infrastructure required to connect the Initiative to other South Asian countries including Bangladesh, Sir Lanka and Nepal.
5.The Digital Railway – an introduction to our Digital Railway Series
With Chinese companies funding multiple rail projects along the Belt and Road routes, and increasingly complex requirements to satisfy passenger and freight requirements. We have produced the first in our series of reports exploring the implementation of new technologies to control train movement and manage traffic along congested rail networks.