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Euromoney, September 2017

China’s Belt and Road Initiative is so vast and ambitious it can be difficult to understand how it will all work in practice – what makes a BRI undertaking, how will they be funded, will they be trophy projects or on commercial terms, how are they originated? – so Euromoney spoke to 16 institutions all looking at BRI from their own different perspectives.

The problem with China’s Belt and Road Initiative is getting a handle on the thing. We know it is big: we all know by now that the countries it embraces account for two thirds of the world’s population and 30% of global GDP. We can all raise our eyebrows at the $900 billion of planned investments and the grand ambition of taking on 65 countries in a single policy. But what, really, does all that mean?

We can only answer that by getting down to details with the people involved – and the stakeholders in Belt and Road are numerous. Until you know what Belt and Road means for a Chinese state bank or an international investment bank, a project borrower or a multilateral, a commercially driven institutional investor or a Chinese state investment arm, a private banker or a health NGO, you haven’t got the whole picture.

So that is what we have set out to do. Over the last few months Euromoney has sought the views of 16 institutions with a different perspective on BRI, and asked them two things: what does it mean to you today and what will it mean in the future?

One lesson that comes from all of this is that the most frequently asked question – ‘what constitutes Belt and Road?’ – is the wrong one to ask.

Belt and Road has become a catch-all term that banks and policymakers alike are already attaching to projects with the most tenuous of links to the actual idea.

Is a domestic Indonesian railway Belt and Road? What is the rule? Does it just need to involve Chinese money, or Chinese construction contracts? Or does it need to be anointed a Belt and Road project from the highest levels of the state?

Ultimately, it does not matter. One international banker calls it a supercharger. One Chinese banker calls it a paraphrasing of globalization. It is probably true to say that all Belt and Road does is add gusto and political force to a trend that was underway anyway, and that the misuse of the term for marketing purposes is rife. But who cares? If it adds to the development of badly needed infrastructure in Asia and beyond and creates commercial opportunities along the way, it doesn’t really matter what it is called, or what fits within the various Venn diagrams of Chinese policy and multilateral initiatives.

There are, however, big questions about those commercial opportunities, because it is not a given that prudent international capital will take part in Belt and Road projects. It must be coaxed, through robust and fair investment frameworks, through the participation of multilaterals or state vehicles assuming some of the risk and through clear methods of exit. No matter how much China cajoles its domestic institutions into taking part in projects, the sheer scope of Xi Jinping’s vision simply cannot be achieved without outside help, in terms of both capital and advice. The most interesting part of Belt and Road is how that process unfolds in the years ahead.

Click on the links below to see our 16 interviews and profile:

The Chinese driver: The Silk Road Fund

The international bank: HSBC

The Chinese policy bank: China Development Bank

The institutional investor: Macquarie

The Chinese commercial bank: ICBC

The Chinese multilateral: AIIB

The Belt and Road project borrower: Karot Hydropower, Pakistan

The non-Belt and Road project borrower: Southern Gas Corridor, Azerbaijan

The international multilateral: Asian Development Bank

The Belt and Road country: Armenia

The China analyst: CLSA

The Asean bank: UOB

The China bank overseas subsidiary: ICBC Standard Bank

The private bank CIO: Credit Suisse

The NGO: Project Hope

The white elephant: Mattala Rajapaksa International Airport, Sri Lanka

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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