BRI Update 2019

Recalibration and New Opportunities

The Second Belt and Road Forum for International Cooperation will be held in Beijing from April 25 to 27. Deloitte China CEO Patrick Tsang and Governance Affairs Managing Partner Norman Sze are privileged to have been asked to attend this invite only Forum. Deloitte is honoured to be present at this top level platform for international cooperation that drives the execution of the Belt and Road Initiative. As one of the most important diplomatic events in China this year, it is also a tremendous platform for international dialogue and collaboration.

At this significant moment, Deloitte China Research is delighted to announce the release of BRI Update 2019: Recalibration and New Opportunities, our latest thought leadership piece in a series on China's BRI. The paper summarizes Deloitte's key insights on the ongoing evolution of the Initiative. Furthermore, it lays out how industry players can benefit from the BRI's new focus on international participation and project quality.


Summary/Key findings

Summary/Key findings

China's global development project, the Belt and Road Initiative (BRI), now includes more than two-thirds of the world's countries. As the initiative enters its 5th year, BRI projects are closing infrastructure gaps in developing countries, boosting the economies of host nations and benefiting the Chinese and international firms involved.

In the face of recent concerns, the Chinese government has adjusted its approach:

  • Participation in BRI projects will become more international and inclusive, featuring much greater private-sector involvement. Furthermore, "Belt and Road" is no longer synonymous with developing countries, and opportunities will increasingly arise in more advanced economies.
  • China’s focus on higher quality projects will lead to more transparency and less risks, with a greater emphasis on due diligence. Working with international agencies and multinational corporations (MNCs) is another way for China’s lenders to better assess and hedge the associated financial, sovereign and geopolitical risks.
  • BRI opportunities will continue to emerge in new sectors and geographies beyond infrastructure and energy, with the fast-growing Digital Silk Road set to spur many technology-led projects.

With the Initiative recalibrated, this whitepaper identifies five areas of growing opportunity that play to the strengths of the private sector.

  • Funding: The focus on project viability and debt risk management will bring opportunities to MNCs and POEs, especially those with expertise in raising funds for large-scale projects.
  • Technology transfer/licensing: Projects in high-tech sectors will create opportunities for MNCs and POEs, in particular those that need to meet stringent local compliance standards in areas such as the environment, energy-saving technology, health and safety.
  • Quality products: MNCs and POEs with overseas experience have a comparative advantage in providing key middleware or elements of end products to meet demand from another participants' in the global supply chain.
  • Advanced management experience: MNCs and POEs have greater expertise in managing infrastructure and real estate joint ventures, as well as running operations in different countries.
  • Integrated solutions: MNCs can cooperate with Chinese companies in areas that encompass two or more segments. An MNC might provide quality products as well as the related technology and management skills needed to run them.

In addition, professional consultancies with a wide international presence across BRI countries can help clients avoid "buying wrong" or buying expensive" when making investments.


(English version)
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