Updates from the New Silk Road
The Belt and Road Initiative is a major development strategy launched by the Chinese government in September 2013 to sponsor and promote economic co-operation among countries along the proposed Belt and Road routes. With our focus on built environment and infrastructure development, we aim to keep you updated on the latest developments.
1. Belt and Road high on agenda at G20 summit
The eleventh G20 summit recently held in Hangzhou in early September, signaled an opportunity for China to seek greater support among the G20 members for the Belt and Road Initiative and the Asia Infrastructure Investment Bank (AIIB).
In face of increasingly complex trade issues faced by G20 members, China took the lead in advocating the role of the belt and road initiative as a key driver in shaping international economic growth, with the initiative promoted as a symbol of China’s major shift away from its traditional “low cost manufacturing” economy, and a gateway to an innovative, interconnected and inclusive world economy.
2. Major technology infrastructure investments along the Belt and Road
The Belt and Road initiative is as much about connectivity as it is about building the hard infrastructure. Technology will play an important part in the development of the Belt and Road alongside the construction of the new roads, rail lines, ports, airports and oil and gas pipelines.
CITIC Telecom International CPC Limited expect to complete by the end of this year the acquisition of the telecommunication business (including fiber optic network, network operations centres and data centre) of Linx Telecommunications B.V. in the Baltic Sea, Moscow and Tallinn, Estonia.
In August 2016, Beijing Xinwei Technology Group agreed to acquire Israeli fixed-satellite operator Spacecom for $285 million, reflecting a substantial premium on the market price. Through this acquisition Beijing Xinwei formed a strategic partnership with Spacecom which provides end-to-end communication solutions to the media and broadband industries in Europe, Africa, Russia, Asia and the Middle East.
3. PBOC pushes RMB clearing services along Belt and Road
To improve the transaction efficiency along the Belt and Road, China is taking the lead in putting in place various measures to cut the exchange rate risk and transaction cost for trade and investments.
There will be more bilateral currency swap deals between the Chinese Central bank and countries along the Belt and Road. The People's Bank of China has to date signed over 20 bilateral currency swap agreements with central banks along the Belt and Road Initiative, with a total value of RMB1.4tn.
Other steps taken by the People's Bank of China towards a more efficient market include, setting up additional offshore RMB clearing banks and authorising more countries along the Belt and Road to become Renminbi qualified foreign institutional investors.