China’sBeltandRoadPolicy
Athens,November2017– KnutMathiassen
TheBeltandRoadMap
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MapII
25October2017 3
Somefactsandfigures
25October2017 4
Ø Unveiledin2013asaUSD900Bill.ProjecttopromoteTradeandInvestments– anew“SilkRoad”totheWestandSouth,includinga“MaritimeSilkRoad”
Ø Chineseinvestmentsin“Beltand“roadcountrieshasacceleratedin2016($31bill)and2017($33billtodate).2017examples:
v $11.6billforGlobalLogisticsPropertiesv $1.8billforAbuDhabioilfieldv $1.0billforCWTv $3.3billfinanceforIrantrainandhighwaydevelopments
Ø However,Chinahastightenedcontrolonoutboundinvestments[toensurecompliancewithBeltandRoadpolicy],restrictingmanyprivatecompanies.
Ø FundingbyChinese“policy”banks
Shouldwebeworriedaboutthe“Belt”?• Chineseeconomicandforeignpolicyendorsedathighestlevelandfacilitatet throughstateownedcompanies,largeprivatesectorconglomerates,ECA’sandpolicybanks
• Massiveinvestmentsinemergingmarkets(Moneytalks)
• Chineseeconomic“colonialism”?§ AlreadyaprovenmodelinAFRICA(e.g.Angola:OilforChinesegoodsandservices)
§ Exploitationofpoorcountrieswithrawmaterials?§ IncreasingdebtburdenofsmalleconomiesanddependenceonChinesegoodsandservices
• KeydriverissecuringaccesstoENERGYandRAWMATERIALSratherthanpromotingTrade?
• IRANstrategicHUBandsourceofOILimports(circumventionofSanctions).Barterarrangments andpaymentinRMB.
• Infrastructureinvestmentsandfinanceinreturnforfavourable longtermtradetreaties,lowertariffsforChinesegoods
• PromotionofRenminbe (Chineseyuan)attheexpenseofUSDcurrency
25October2017 5
IsBeltandRoadgoodforShipping?
25October2017 6
• InprincipleYESasInvestmentsinIndustry,Infrastructure,PortsandRoad/RailwaywillincreaseindustrialproductionandSeaborn trade.RecoveryforDryBulk??
• BUT(lookatthemap)– OverlandexpansionWESTdominates(Railroads,Pipelines,Roads).TruckingratherthanShipping?
• MARITIMESILKROAD:PortacquisitionsandterminalinvestmentsbenefitsCONTAINERSHIPPING,
• PortofPIREAUS:COSCOexperiencingsignificantchallenges,controversialinvestment.EuropeanresistancetoBeltandRoad?
• OverlandOILPIPELINES:MyanmartoChinacrudeoilPipeline400,000bpdstartedupinApril17;MaDaytoYunnanRefinery.willreduceton-milesforTankersEast
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