26 May 2016
The Belt & Road Initiative – A Modern Day Silk Road
By Norton Rose Fulbright
The Belt & Road Initiative (B&R) is without a doubt the most ambitious, strategic interconnected infrastructure initiative devised in recent memory.
Launched by Chinese President Xi Jinping in 2013, the initiative aims to connect major Eurasian economies through infrastructure, trade and investment. It will see a RMB1.5 trillion infrastructure investment pipeline1 stretching over 10,000 km over more than 60 countries with a total population of 4.4 billion2 and 40% of global GDP3 across Asia, Europe, the Middle East and Africa, and cover projects across the infrastructure and energy sectors from small scale renewables to large scale integrated mining, power and transport projects. After its announcement in 2015, over 1400 contracts worth over US$37 billion were signed by Chinese companies in the first half of 2015.4
Full details of both the project pipeline and the specific requirements for a project to qualify as a B&R project are still not fully certain. What is clear is that the potential opportunities for infrastructure investment are immense.
For any host country or investor interested in infrastructure in B&R regions, Chinese capital cannot be ignored. Tapping it can be difficult but a foreign investor who can navigate the issues involved is potentially unlocking the key source of capital and equipment for the B&R regions’ major projects over the next fifteen years.
The Belt & Road Initiative has two main elements: the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
The Silk Road Economic Belt will be an overland network of road, rail and pipelines roughly following the old Silk Road trading route that will connect China’s east coast with Europe via a new Eurasian land bridge. 5 regional corridors will branch off the land bridge, with Mongolia and Russia to the North, South East Asia, India, Pakistan and Bangladesh to the South, and central Asia, West Asia and Europe to the West.
The 21st Century Maritime Silk Road is a planned sea route with integrated port and coastal infrastructure projects running from China’s east coast to Europe, India, Africa and the Pacific through the South China Sea and the Indian Ocean.
The geographic scope of the Belt & Road Initiative is fairly fluid and on some interpretations has also been extended to Australia and the UK.
A snapshot of the land corridors and a map showing both the Belt and the Road is set out……
This article was first published by Norton Rose Fulbright and is reprinted here with their full permission.
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