A new study from Euler Hermes shows that 117 billion US dollars will be added in global trade this year thanks to the Belt and Road Initiative (BRI). According to the study analysis, that will represent 0.3% to the global trade and 0.1% to the global growth. The Chinese project launched in 2013 aimed infrastructure building in countries that represent 68% of the world’s population and 36% of world’s gross domestic product.
BRI includes investments in more than 130 countries. The investments comprise economic development (education, soft skills, hard skills etc.) and transportation infrastructures. It involves 30 international organizations. The project will be conducted across Asia, Africa, the Caribbean, Europe and South America. BRI will cost more than 1 trillion US dollars and is known to be the most ambitious infrastructure project undertaken in human history. It is planned to be completed by 2049.
BRI is facing several challenges. Countries that are involved in the project having debt problems and allega-tions of corruption have been made. Moreover, it seems that BRI lacks of transparency and environmental sustainability. Last but not least, the US-China trade conflict is an issue since most of the projects are fi-nanced in US dollars. China decided to reply to some of the concerns with a “reboot” of the BRI at the China’s Belt and Road Forum in Beijing. During the event, the Asian giant stated that state-owned enterprises (by far the largest investors in BRI) will face greater oversight and that environmental standards and anti-corruption safeguards will be enhanced.
China’s commitment to BRI is still very strong and the project is ahead of schedule and delivers results earlier than planned by Chinese authorities. Moreover, BRI awareness is increasing over countries. The investment in the project continues. In 2019, the value of new belt and road projects was 4.5 billion US dollars worth over a very short period (from January 2nd to January 15th).
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