Panel
Speed Bumps Ahead: China's Belt and Road Initiative
Milken InstituteCheryl Wu-Dun, Lincoln Leung, Kevin Liu, Winston Ma, Dominic Ng, Perry Wong, HONG LIU, CAROLINE BUCKEE, CAROLINE MECKFESSELSENMILLER JR., DAVID LEONHARDT JR., DAVID LEONG HSUI, LINCOLN CROWE, WINSTON TAYLOR JR., MARTHA MINOWE, YONGJIE LEE CHOI, KEVIN VLKONNOSOHN
- The number of participating countries in the Belt and Road Initiative is expected to exceed the 65 recorded in 2017, with projections for further changes by the following year.
- ASEAN countries are projected to require $2.5 to $3 trillion in infrastructure investment over the next 10 to 15 years, with a target completion timeframe of 2025 to 2030.
- Infrastructure projects are anticipated to take several years to complete before generating revenue, with local economic integration taking years to evaluate success.
- The initiative is planned to run for approximately 10 to 15 years, targeting the 2025 to 2030 period, with a final assessment of the initiative's success expected by 2049 coinciding with the 100-year anniversary of the Communist Party.
- Some Belt and Road projects are expected to fail, requiring the Chinese government to rely on overall successes to offset losses, while others may succeed and lead to commercial dominance by 2025 to 2030 after government-built infrastructure is completed.
- The Chinese leadership intends to use the initiative to secure and prosper western China and accommodate a demographic shift where a labor shortage necessitates migration or economic activity relocation within 10 years, specifically targeting South Asia's young population.
- China aims to fill transportation gaps left by Western powers and negotiate complex geopolitical routes, potentially building nodes where it can compete with British and American efforts.
- Regulatory scrutiny for sovereign investments is expected to rise significantly, with a changing regulatory environment driving a shift toward private market participation due to limited government funding capabilities.
- China's 5G technology competition is projected to start on equal footing with the US, contrasting with the 4G era, while competition between Chinese and US internet giants for the next billion users in emerging markets is expected to intensify.
- In the event of project failures, countries may be required to hand over strategic assets like ports, with banks managing outcomes through loan repayment agreements or other mechanisms to ensure sustainability.
- The AIIB is expected to provide guidelines to mitigate issues and could slightly disintermediate Wall Street by retaining Asian infrastructure needs and savings within Asia.
- The global geopolitical order may undergo a slight transformation driven more by economic factors than politics, as China attempts to refashion the global economic order by dispensing with rules of aging Western-dominated institutions.
- US companies are expected to sell equipment, goods, and services to Chinese construction and operating entities, with business opportunities in wholesale and consumer sectors gradually increasing as infrastructure is built.
- Current US government leadership is doubted to intervene soon due to the Ex-Im Bank program being paralyzed by internal political gridlock, though a "powwow" between Trump and Xi might be required for US leadership in this area.
- The southern routes of the initiative are expected to be commercially more viable due to large populations and ongoing urbanization, with commercial activities dominating the blueprint after government infrastructure development.