Belt and Road Weekly Investor Intelligence #3
Welcome to this week’s issue of China Briefing’s Belt & Road Initiative Weekly Investor Intelligence round up.
With many of China’s Belt and Road infrastructure projects now coming to completion, opportunities to exploit this infrastructure in the form of new business set ups to exploit it are becoming available.
New highways, bridges, and railways increase passenger flows – opening new areas and leading to increasing trade and the need for services to support these.
Every week we will examine where some of these opportunities are about to come to fruition.
Tuesday, November 17, 2020
Belt & Road Initiative Global Trade
The RCEP Free Trade Agreement signed on Sunday between ASEAN, Australia, China, Japan, New Zealand and South Korea covers 30% of global trade and 2.2 billion consumers. Rules of Origin are standardized across all RCEP members, of special interest to finishing processing facilities in Cambodia, Laos & Myanmar.
135 countries surveyed, with average exports up 28.8% from 2016 to 2019. Infrastructure and ports build are helping smaller economies export sales worldwide, while other developments in global trade such as reforms and tax reductions are assisting. This overview tells you where is booming and where is busting.
Seven years on from the launch of the BRI we are able to measure the success, failure and impact of these investments. One way of doing so is to examine the differences in each countries World Bank ‘Ease Of Doing Business’ rankings since 2013 and to look at any difference. There are 135 countries that have both signed up to China’s Belt & Road and that are also monitored by the World Bank. Ease of Doing Business rankings are important because they shed some light on how economies are developing, and the standards employed within local commerce and trade. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
The Belt & Road Initiative and the European Union
EU members who signed BRI MoU are lagging behind in China export growth. A lack of resources, research infrastructure and market awareness may be an issue, however the China consumer market is growing and will hit 550 million by 2024. Closing the knowledge gap is key to understanding and implementing a successful China export strategy.
A common border and specific trade policies are seeing the Russia-China trade corridor double in the next three years. In 2020, Russian supplies of meat and offal to China increased nine times, soybean oil – five times, while sunflower oil exports doubled. There are opportunities for investors looking at the North China-Russian Far East region.
If the US rejoins JCPOA, as might happen under a new Presidency, Anzali Port will boom. It provides Free Trade access to Tehran and is connected via maritime links to markets in Azerbaijan, Kazakhstan, Russia & Turkmenistan, and is a crucial part of the International North South Transport Corridor to India.
Priority discussions are taking place between Russia and India concerning a free trade deal with the Eurasian Economic Union. The opening of the International North South Transport Corridor provides access to new markets, while opportunities for import-export for both Indian and Russian businesses.
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