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Buckle up for the Belt
and Road (B&R) Initiative
WHAT IMPACT WILL THE B&R INITIATIVE HAVE ON
CHINESE CORPORATIONS GOING ABROAD AND OVERSEAS
CORPORATIONS WANTING TO DO BUSINESS WITH CHINA?
It’s a confusing name, but it could turn
out to be the largest infrastructure
project with close to one trillion dollars
being invested across the globe.
The much-talked-about Belt and
Road (B&R) initiative is a massive
infrastructure and economic
development plan put forward by
President Xi Jinping. At an estimated
investment cost of up to U.S. $8 trillion,
the initiative centres on connectivity
and cooperation between China and
Eurasian countries via the overland
“Silk Road Economic Belt” (SREB) and
the oceangoing “Maritime Silk Road”
(MSR).
Since its announcement in 2013, the
B&R initiative has garnered a huge
amount of interest in China and across
the globe. Countless governments,
Chinese corporations, and overseas-
based corporations have all expressed
a willingness to get involved in this
massive infrastructure plan, which will
be built to ease connectedness and
better facilitate global trade. When
pieced together, the B&R initiative
will be one of the largest trade
collaboration schemes the world has
seen for many years. No corporation,
be they China or overseas based, can
afford to ignore this mammoth step
change for future global investment
and trade.
B&R has been offered as an innovative
mode of cooperation in global
governance against the backdrop of
a worsening economic situation and
simmering geopolitical problems
worldwide. The strategy underscores
China’s drive to take a larger role
in global affairs and its wish to
synchronise economic activity with
other countries. Chinese corporations
now comprise a larger part of the
commercial universe. The composition
of the Fortune Global 500 list
exemplifies this change in corporate
geography. In fact, the number of
Chinese firms on the list climbed from
43 in 2010 to 103 in 2016, making
China’s representation second only to
that of the United States. Among the
world’s billion-dollar firms, around 900
are from the Greater China region.
Having grown to a considerable size
at home, many Chinese corporates, be
they state-owned enterprises (SOEs)
or privately-owned enterprises (POEs),
are expected to use the B&R initiative
as a strategic platform to further
expand their commercial presence and
activity globally in the form of either
organic growth or via mergers and
acquisitions. But, what does the future
hold?
WHAT OCCUPIERS WANT
The $8 trillion question: “What is the Belt and Road initiative?”
The B&R could become
either a source of great-
power competition or a
force for stability.
SHAUN BRODIE
Senior Director, Head of Occupier
Research, Greater China
48 The Occupier Edge