The Asia Pacific region and BRI

BRI route

Rome [ENA] The Asia Pacific region is one of the areas with the highest growth dimensions for the coming years. This potential is depending on the necessity to ensure adequate infrastructure, and it is no easy task given recent estimates by the Asian Development Bank, with spending needs for infrastructure in the Asia Pacific region predicted to top 1.7 trillion dollars a year. Anyway, over one thousend are the

investment projects concluded under the aegis of Belt & Road in 5 years and they are out of a total of over 3,000 Chinese investments in the world according to China Global Investment Tracker. Almost all investments have been by State-owned Enterprises (SOE), and have been confirmed by the same Chinese sources (State-owned Assets Supervision and Administration Commission of the State Counci- SASAC). The main target sectors have been: energy, infrastructure and development. This confirms the prominent role of firms owned or controlled by the State in accessing the resources devoted to BRI projects. Debates around the world are rising about the potential political consequences of this trend, as well as

about the types of projects financed with AIIB funding and the criteria to define projects classified as B&R. Merchandise trade between China and the countries targeted by its “Belt and Road Initiative” is predicted to grow by US$117 billion this year, according to new analysis. For China, this will mean US$56 billion in additional exports, while it will import an extra US$61 billion worth of goods from the 80 countries named in the Chinese government’s official manifesto, research from trade credit insurer Euler Hermes shows.

In 2018, the trade gains were estimated to be higher still, at US$158 billion, with South Korea, countries in Southeast Asia, India and Russia the greatest beneficiaries. The investment has continued this year. From January 2 to January 15, the value of new belt and road projects was US$4.5 billion, according to RWR Advisory Group, with the highest proportion of this going to Sub-Saharan Africa. As far as the massive infrastructure investments, China’s Belt and Road Initiative (BRI), officially launched by President Xi Jinping while on a state visit to Kazakhstan in 2013, has attracted most international interest and attention. Given its geographical location as a privileged corridor on the east-west axis, Central Asia

is positioned at the very heart of the BRI’s land trade links. China, nevertheless, is not the only regional player with the potential to give a decisive boost to Central Asian connectivity. The other Asian goliath, India, has also begun to move in this direction. In this respect, India has attracted the interest of numerous regional players, motivated by an effort to find other external partners capable of equalizing China’s mounting involvement in their neighbourhood. India’s strategy is expressed within the framework of New Delhi’s key infrastructure project, the International North-South Transport Corridor (INSTC). The objective is to ensure a faster route between Indian and Russian territory, allowing Indian goods

(such as clothing, chemicals and agricultural products) to reach Iran, Central Asia and some parts of Europe while avoiding Pakistan, India’s historic rival. Growing Indian imports of Central Asian and Iranian natural gas, oil and uranium is also a key goal in this regard. A completed INSTC could boost trade exchanges between India and Central Asia (including Iran) with estimates forecasting an increase to 170 billion dollars, from the current 1 billion level. For the purposes of comparison, in 2016, trade between China

and Central Asia amounted to 30 billion euro. A well-defined representation of the infrastructure competition under way between China and India are the ports of Gwadar in Pakistan (backed by China) and the Iranian port of Chabahar (backed by India). Located near the Gulf of Oman and about 150 km from each other, they represent two different and competing trade access points.