Past Event

Financing the Belt and Road Initiative

The Belt and Road initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe.

Date: February 9, 2017, 8:30 am Topic: Global Economics & Governance

SUMMARY

The Belt and Road (B&R) initiative, a global infrastructure project between China and Eurasia, was examined at this Bruegel’s event. In particular, the discussion focused on the question how this mammoth project can be financed. The panel, consistent of experts from both sides, provided the audience with an overview about current investment in the B&R initiative, highlighting future opportunities and challenges.

China’s economy is characterized by a large surplus capacity. As such, it needs a “backyard” to further expand trade and bolster economic growth. The B&R initiative could play a crucial role in achieving those goals by providing the necessary infrastructure and thus boost trade between China and Europe. By Bruegel’s estimation, the overall effect on European trade could amount to an increase of more than 6% due to a reduction of transportation costs.

The main players in financing this initiative were pointed out to be Chinese and European investment banks and corporation, together with commercial banks and funds. As pointed out by Sun Mingxi, Chinese Mission to the EU, some substantial commitments to the B&R project were already made by China. However, Alicia García-Herrero, Bruegel, warned about a worsening asset quality of Chinese banks and questioned their ability to stem the project on their own.

Alessandro Carano, European Commission, argued that there is a general openness towards investment within the entire EU. The dialogue with China has already started in 2015 and will be continued. However, future investment has to be sustainable and possess aligned priorities in order to attract investors. Overall, the Belt and Road initiative could offer high return opportunities.

Addressing questions from the audience, Sue Anne Tay, HSCB, highlighted the positive effects of the project on areas such as agriculture, medicine and tourism. Asked about the impact of the abolished TTIP agreement on the B&R initiative, the panel argued that it will not discourage investors and might even make the project a more feasible reality.

Notes by Dmitry Chervyakov

Video and audio recording


The Belt and Road initiative has the goal to promote regional and cross-continental connectivity between China and Eurasia. The ‘One Belt’ and ‘One Road’ refer to China’s proposed ‘Silk Road Economic Belt’ and ‘Maritime Silk Road’, and will consist of a series of infrastructure investments to facilitate trade between the regions involved.

Potential challenges abound with financing the planned $890bn in investments.

What will be the role of AIIB, a China-led multilateral institution with 57 member countries? Could European banks help finance the Belt and Road through cross border lending?

EVENT MATERIALS

Presentation by Alicia García-Herrero

Schedule

Feb 9, 2017

8:30-9:00

Check in and Breakfast

9:00-10:00

Panel discussion

Chair: Jianwei Xu, Visiting Fellow

Alessandro Carano, Member of Cabinet, Commissioner Bulc

Alicia García-Herrero, Senior Fellow

SUN Mingxi, Counsellor for Economic Affairs, Chinese Mission to the EU

Sue Anne Tay, Senior Vice President, Group Strategy office, HSBC

10:00-10:30

Q&A

10:30

End

Speakers

Alicia García-Herrero

Senior Fellow

SUN Mingxi

Counsellor for Economic Affairs, Chinese Mission to the EU

Jianwei Xu

Visiting Fellow

Alessandro Carano

Member of Cabinet, Commissioner Bulc

Sue Anne Tay

Senior Vice President, Group Strategy office, HSBC

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read about event

Past Event

Past Event

Fintech and the digital transformation of banking

FinTech is changing the financial sector. What are the challenges associated with this and what policies should we adopt in response?

Speakers: Xavier Corman, Cora van Nieuwenhuizen, Georgios Petropoulos, Ezequiel Szafir and Pēteris Zilgalvis Topic: Finance & Financial Regulation, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 20, 2017
Read article Download PDF

Policy Contribution

How to handle state-owned enterprises in EU-China investment talks

Chinese state-owned enterprises (SOEs) are one of the main obstacles preventing China and the European Union from agreeing a bilateral investment agreement. Creating barriers to prevent Chinese companies acquiring European assets will not solve the problem, but bringing Chinese corporate governance closer to global market principles will be essential to ensure European and Chinese corporates operate on an equal footing in their cross-border investment decisions.

By: Alicia García-Herrero and Jianwei Xu Topic: Global Economics & Governance Date: June 19, 2017
Read about event More on this topic

Past Event

Past Event

Lessons for the future governance of financial assistance in the EU

On 14th June, Randall Henning will present his latest book on the Euro crisis and we will discuss how financial assistance should be governed in the euro area in the future.

Speakers: Servaas Deroose, C. Randall Henning, Rolf Strauch and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 14, 2017
Read article More on this topic More by this author

Blog Post

Other than climate change, can anything else unite Europe and China against Trump?

Some instant takeaways from the EU-China Summit. A timely show of unity, but little real change in interests.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: June 2, 2017
Read about event More on this topic

Past Event

Past Event

Substance requirements for financial firms moving out from the UK

In the run-up to Brexit, UK-based financial firms are considering how to organize their operations across the future divide between the UK and EU27. This event will discuss the regulatory requirements on how self-sustaining the operations in the EU should be, and implications for the single market and third countries.

Speakers: Gerry Cross, Simon Gleeson and Nicolas Véron Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 2, 2017
Read about event

Past Event

Past Event

Inclusive growth: global and European lessons for Spain

Can manufacturing still be a driver for inclusive growth around the world? What European and national policies can foster inclusive growth in Europe? What is the situation in Spain and what can Spain learn from the global and European experiences?

Speakers: Cristina Cabrera, Zsolt Darvas, Maria Demertzis, Alejandra Kindelán, Robert Lawrence and Federico Steinberg Topic: European Macroeconomics & Governance, Global Economics & Governance Location: Calle Los Madrazo 36-38 Madrid Date: May 31, 2017
Read about event

Past Event

Past Event

Geo-blocking in the digital single market

Geo-blocking is a discriminatory practice that is wide-spread in EU. It prevents online customers from accessing and purchasing products or services from a website based in another member state

Speakers: Marine Elgrichi, J. Scott Marcus, Fabian Paagman, Bertin Martens, Georgios Petropoulos, Agustin Reyna, Gareth Shier, Werner Stengg and Roza von Thun Topic: European Macroeconomics & Governance, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 30, 2017
Read article More on this topic More by this author

Blog Post

China cannot finance the Belt and Road alone

The One Belt One Road initiative holds great promise for the global economy, but will need a huge amount of finance. Initial presumptions that China would be able to provide all the finance are now unrealistic. Other partners should consider providing finance for some aspects, especially Europe - which has a lot to gain from the project.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: May 12, 2017
Read article More on this topic More by this author

Opinion

China's rising leverage is a growing risk

Worries about the growth in China's leverage are on the rise. Is this growth in leverage sustainable? Alicia García-Herrero finds that the evidence is not so positive so far.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: May 12, 2017
Read about event More on this topic

Past Event

Past Event

Financial Times - Bruegel Forum: the future of Europe after the French election

The second event in the Financial Times - Bruegel Forum series will look at how the results of the French elections will affect Europe.

Speakers: Tony Barber, Jean Pisani-Ferry and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 11, 2017
Read about event More on this topic

Past Event

Past Event

Standardisation and patents: problems and policy options

Bruegel together with the Association for Competition Economics (ACE), is hosting an event on standardization and SEP licensing.

Speakers: Aleksandra Boutin, Georgios Petropoulos, Rebekka Porath, Pierre Regibeau and Hughes de la Motte Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 9, 2017
Read article Download PDF

Policy Contribution

Central Asia at 25

After a decade of growth based on hydrocarbon booms, Central Asian countries are faced with increasing challenges to complete their transitions to a market economy and towards economic development and integration.

By: Uuriintuya Batsaikhan and Marek Dabrowski Topic: Global Economics & Governance Date: May 5, 2017
Load more posts