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The Belt and Road Initiative (BRI) is leading the way in pursuing opening up on all fronts

By EY

Key area along the Belt and Road (B&R) – ASEAN

As the regional hub of BRI, ASEAN is critical for the connectivity between China and other countries along the route. Besides its critical geographical position, ASEAN is attracting more attention from investors with its young population, large labor force, abundant natural resources and huge opportunities to invest in its infrastructure sector.

ASEAN has attributed steady growth in recent years and seen broader prospects for cooperation with China. The two parties have agreed to improve their connectivity through integrating “Master Plan on ASEAN Connectivity 2025” and the BRI. 2017 marks the 50th anniversary of ASEAN and by 2018, it is 15 years since China established a strategic partnership with it. Building on this occasion, the two parties should deepen trade and investment cooperation to create greater growth opportunities. By 2020, the trade volume between China and ASEAN and new two-way investment may reach US$1 trillion and US$150 billion, respectively.

The 15th China-ASEAN Expo in March this year set a clear direction on future collaboration between China and ASEAN countries. They will continue to promote infrastructure cooperation, deepen international production capacity cooperation, build demonstrative economic and trade industrial parks, as well as cross-border industrial chains. In addition, a China-ASEAN projects database is planned to improve information connectivity…

Singapore’s role and outlook under the BRI

China and Singapore are important trade partners, whose bilateral economic and trade cooperation develops rapidly, heading broader and deeper in recent years. Chinese investors have long considered Singapore as one of the most significant foreign investment destinations, and Singapore has become China’s biggest M&A destination in 2017 as M&A activities by Chinese enterprises surged, mainly in the transportation, technology, telecommunications and life sciences sectors.

As a critical country along the “Maritime Silk Road”, Singapore serves as a strategic point for the BRI. Singapore and Chinese enterprises are now working together to develop more projects and investment opportunities in various sectors along the B&R including energy, infrastructure, shipping, logistics, finance, property development and new media…

Malaysia’s role and prospects under the BRI

Driven by the BRI and international production capacity cooperation, China and Malaysia have been pushing ahead practical cooperation in politics, economy, humanity and security. Currently, Chinese enterprise investments in Malaysia are not only co-development projects on local properties and infrastructure, such as Malaysia’s East Coast Rail Link, Melaka Gateway, but also in various manufacturing and service industries including telecommunications, automobile and other advanced technology. During the 10 years between 2008 and 2017, around 50 M&A transactions in Malaysia which worth about US$10 billion had Chinese investor footprints, most of which occurred in the financial services, power and utilities and consumer products sectors.

As Malaysia focuses more on the Asia-Pacific market and capitalizes on its strategic position at the crossroad of east-west trade routes, we expect more Chinese investors will look to Malaysia in the future. Among them, the "six economic corridors" planned by Malaysia provides a wide range of investment opportunities in areas such as agriculture, education, logistics, manufacturing, oil and gas, and professional services…

Indonesia’s role and prospects under the BRI

At present, Indonesia is committed to building itself into a "Global Maritime Axis" and embarking on the “Maritime highway program” – including the construction of 2,000-kilometers of highway, 10 new airports, 10 new seaports and 10 industrial parks in the future so as to improve the domestic connectivity of sea, land and air, and to promote the infrastructure projects such as energy, communications and electricity28, all of which are highly compatible with the BRI. In the future, both sides can focus on the hotspot areas such as infrastructure construction, to connect the BRI and the “Maritime highway program” to deepen the level of connectivity between the two countries…

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