The Belt and Road Initiative: Implications for China and East Asian Economies

Abstract

The China-led Belt and Road Initiative (BRI) is set to become a formidabledevelopment programme and its implications will be far reaching for East Asia, including ASEAN and China. It will provide further momentum for intra-Asian investment and trade flows and the implementation of such a strategy will also help to accelerate China's mergers and acquisitions activities in infrastructure, logistics and tourism. The BRI is expected to raise the Renminbi's international use in trade settlement and financing. A considerable amount of financing is estimated to come from Chinese institutions, particularly policy banks such as China Development Bank and a range of government-linked institutions. This article discusses China's funding support and investment to improve regional connectivity and analyses the repercussions of China's financial commitments under the Belt and Road Initiative for East Asia as well as its own economy.

China's Guangdong-Hong Kong-Macao Greater Bay Area: A Primer

“…In order to promote Hong Kong's financial support of the BRI, the Hong Kong Monetary Authority Infrastructure Financing Facilitating Office was established in July 2016. As argued by Chan (2018), given the huge infrastructure demand, the BRI would require multiple sources and mechanisms of funding; a market-oriented, multitier system of financing is the only feasible way to provide sustainable funding for cross-border infrastructure projects. Hong Kong seems to be the sole candidate in China that can fulfil this role.…”

Evolution of China’s Outward Foreign Direct Investment Regime: Implications for Southeast Asia Under the Belt and Road Initiative

“…Jinping has billed the BRI as the 'project of the century' to achieve regional economic integration amongst Asia, Europe and Africa (Chan, 2017). The financing of the BRI is hugely reliant on China with funds mainly sourced from the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank .…”

“…Currently, AIIB has 80 member states worldwide who have agreed to raised US$100 billion for bank capital (National Development and Reform Commission, 2015). In 2014, the Chinese government established a new Silk Road fund with capital of US$440 billion (Chan, 2017). And finance for the BRI is estimated to come from various sources, including the AIIB, the Asian Development Bank (ADB), the World Bank, as well as private sectors (National Development and Reform Commission of PRC, 2015).…”

Building Bridges or Breaking Bonds? The Belt and Road Initiative and Foreign Aid Competition

“…While recognising that the US will remain a superpower for decades even after the global financial crisis, China aims to secure its interests, particularly those in Asia-Pacific region, and looks forward to gaining international influence (Chan 2014;Callahan 2016). China thus advances the BRI as a strategy to deal with its competition with the US (Chan 2018). By promoting the BRI, China aims to intensify relations with traditional US allies in East Asia, which in turn can undermine US influence.…”