By European Think-tank Network on China (ETNC)

Sizing Up Chinese Investments in Europe

Chinese investments in Europe have surged in recent years, and have become a critical feature of Europe-China relations. Foreign direct investment (FDI) in the European Union traced back to mainland China hit a record EUR 35 billion in 2016, compared with only EUR 1.6 billion in 2010, according to data gathered by the Rhodium Group. In a historic shift, the flow of Chinese direct investment into Europe has surpassed the declining flows of annual European direct investments into China. As China continues to grow, develop, and integrate into the global economy, its overseas investments expand in quantity and quality, reflecting both the growing sophistication of the Chinese economy and broader Chinese commercial and policy goals. Going beyond FDI, Chinese investment is creating new realities for Europe-China relations.

This report by the European Think-tank Network on China (ETNC) brings together original analysis from 19 European countries to better understand these trends and their consequences for policy making and Europe-China relations, including at the bilateral, subregional and EU levels. As in all ETNC reports, it seeks to do so using a country-level approach. Through these case studies, including an introductory explanation and analysis of EU-wide data, the report aims to identify and contextualize the motives for Chinese investment in Europe and the vehicles used. However, the originality of the report also lies in the analysis of national-level debates on China, Chinese investment, and openness to foreign investment more generally. This is not just a story about FDI strictly defined, but about the (geo)political implications that emanate from deeper economic interaction with China. Ultimately, Europe is far from speaking with a single voice on these matters, and identifying where the divergences and convergences lie, will be crucial in formulating solid and complementary policy positions at the EU and national level moving forward.

China’s growing investment interests in Europe

Until recently, it was not uncommon to depict China as a minor source of investment in Europe and elsewhere in relative terms. Indeed, of total FDI stock held in the European Union by the end of 2015, China only accounted for 2 percent according to Eurostat figures, and its investment stock in many European countries remains low when compared with older investors. However, the facts on the ground are evolving rapidly, and China still has plenty of room to grow: The total stock of Chinese outbound direct investment worldwide still only represents 10 percent of its national GDP. Compare this to France or the UK (50+ percent), Germany (39 percent), the United States (34 percent) and Japan (28 percent). If China continues on its path towards more advanced levels of economic development, we must expect a massive further increase in its outbound FDI. Europe has already become a favored destination for Chinese investment, and policymakers need to adapt to a new force shaping the economic and political landscape in Europe.

As the country analyses of this report show, European economies have a wide range of assets and features that Chinese investors seek. There should be no doubt that China needs Europe (maybe even more than vice-versa). Patterns of Chinese investment highlight sources of European attractiveness that need to be better appreciated and leveraged. Among the things that Chinese investors seek in Europe are:

• Technology, to include established high-tech assets, emerging technologies and know-how;

• Access to the European market, for Chinese goods and services;

• Access to third markets via European corporate networks, especially in Latin America and Africa;

• Brand names to improve the marketability of Chinese products both abroad and for the Chinese market;

• Integrated regional and global value chains in production, knowledge and transport;

• A stable legal, regulatory and political environment, particularly in a context of global disruption and political uncertainty;

• Political/diplomatic influence in a region that in aggregate terms remains the second largest economy after the US.

Behind the growth in China’s outbound investments is the story of China’s economic transformation towards more consumption-based growth and higher value-added industries, including technology and services. The success of China’s economic transformation depends on an increased commercial presence abroad and deepening international linkages. This is not only true for all economic enterprises in China, including SOEs and private companies, but it also serves as a critical source of Party legitimacy and political stability.

In this context, many chapters in this report confirm the importance of Beijing’s policy initiatives in shaping investments overseas, and in Europe in particular. Beijing’s “going out” policy starting in 2001, and intensifying after the Global Financial crisis, has facilitated and encouraged the internationalization of Chinese firms for much of the last two decades as a means to develop the national economy. More recently, both China’s 12th and 13th five-year plans (2011-2015; 2016-2020) have encouraged overseas investments as a means to access supply chains, quality brand names and advanced technology – all reasons for investing in Europe. As China’s industrial strategy grows in sophistication, plans such as “Made in China 2025” will increasingly channel overseas investments as a means to achieve clear policy goals in the so-called “new strategic industries” defined in Beijing. In 2016, the largest share of Chinese global mergers and acquisitions targeted the high-tech sector (24 percent of total deal values), compared to 20 percent that targeted energy and material assets (Rhodium Group, 2017). The controls on outbound Chinese capital that the Chinese government deployed in 2016 and 2017 also highlight the crucial impact of Beijing’s interests and policies, i.e., the political nature of outbound capital flows. Finally, as China continues to press forward with its Belt and Road Initiative (BRI), an initiative now elevated to constitutional rank within the Chinese Communist Party in fall 2017, Europe can also expect to see an increasing number of related Chinese investments.

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The Government of the Hong Kong Special Administrative Region (HKSAR) held a seminar entitled "Strategies and Opportunities under the Belt and Road Initiative - Leveraging Hong Kong's Advantages, Meeting the Country's Needs” in conjunction with the Belt and Road General Chamber of Commerce on 3 February 2018 at the Great Hall of the People in Beijing.

The full-day seminar was attended by around 120 representatives from the business and professional services sectors in Hong Kong, and more than 380 chief executives and members of senior management from over 170 state-owned enterprises (SoEs). It enabled both sides to establish direct contact and facilitated the forging of strategic partnerships in taking forward Belt and Road-related work. There were also in-depth discussions on how to capitalise on the distinct advantages of Hong Kong's business and professional services sectors so as to jointly promote the Initiative.

1. Keynote Speeches

• Mr Zhang Dejiang, the Chairman of the Standing Committee of the National People's Congress, delivered keynote speech at the opening ceremony of the seminar（Chinese only）
• The Chief Executive Mrs Carrie Lam delivered keynote speech for the seminar (Chinese only)
• Mr Xiao Yaqing, the Chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) delivered opening remarks for the thematic discussion sessions of the seminar (Chinese only)
• The Chief Executive Mrs Carrie Lam delivered closing remarks for the seminar (Chinese only)

2. Other Information

• Seminar Programme (Chinese only)
• Booklet on Hong Kong Special Administrative Region Delegation (Chinese only)
• List of State-owned and Mainland Enterprises and Organisations that enrolled and participated in the Seminar (Chinese only)

For more details, please refer to http://www.beltandroad.gov.hk/activities_20180203.html. 

By James Laurenceson, Deputy Director of the Australia-China Relations Institute, University of Technology Sydney
Simone van Nieuwenhuizen, Project and Research Support Officer, Australia-China Relations Institute, University of Technology Sydney
Elena Collinson, Senior Project and Research Officer at the Australia-China Relations Institute, University of Technology Sydney

Executive Summary

The Belt and Road Initiative (BRI) was launched as a signature initiative of Chinese President Xi Jinping in 2013. China contends that the aim of the BRI is to enhance regional connectivity across five dimensions – infrastructure, policy, finance, trade and people-to-people links. The BRI was written into the charter of the Chinese Communist Party at the 19th Party Congress in Beijing in October 2017, indicating that it will remain a focal point for China’s foreign policy and its international economic outreach beyond the end of Xi’s second term in 2022. The Australian government has yet to formulate a policy on BRI engagement. To date the response has been limited to the signing of a Memorandum of Understanding (MOU) with China on cooperation with Australian companies on BRI projects in third-party countries. Australia and China are also reportedly currently considering forming a working group to further explore other types of cooperation on the BRI, although the formation of the group is still in the planning stage. This paper critically reviews the four major points of debate on deepening Australian engagement with the BRI.

1. The geostrategic outcomes of the BRI

The first is that Australia should keep its distance because the BRI has the potential to promote a geostrategic outcome unfavourable to its security ally, the United States. The major driver of geostrategic shifts in the Asia-Pacific region is China’s steadily increasing economic power. Short of the US and its allies, partners and friends adopting an active China containment strategy, this trend is likely to continue, irrespective of the BRI, although the BRI may accelerate it. There is a possibility that the US will lean on Australia to sign up to alternatives to the BRI. Should Australia opt to deepen engagement with the BRI, it could – and should – also participate in other initiatives that have a clear economic justification.

2. The BRI in China’s policymaking tradition

Another reported Australian government concern is that the BRI lacks a detailed roadmap outlining a pipeline of projects and this prevents meaningful participation in practice. However, in a Chinese policy-making tradition, at this stage the BRI is chiefly a concept, an invitation to cooperate, and has flexibility deliberately built in. This flexibility provides opportunities for creative Australian diplomacy to advance the national interest. Australian companies participating in BRI projects in third-party countries is only one way that cooperation might proceed. Australia could also use the BRI to pursue greater connectivity with China’s rapidly growing economy in areas not covered by the China-Australia Free Trade Agreement (ChAFTA), subject to national interest and national security considerations. For example, Australia could seek to harness the political capital that China is staking on the BRI to upgrade the three decade-old investment treaty that exists between two countries.

3. The BRI’s transparency and governance standards

China’s mixed track record on transparency, governance and local participation on overseas investments is another reason sometimes provided for why the Australian government should not more actively engage with the BRI. Australia has a clear national interest in supporting initiatives that result in strong development outcomes, pushing for adherence to principles of transparency and the implementation of a strong governance framework. At the same time, as the BRI’s main sponsor, China has financial and reputational incentives to promote the BRI’s effectiveness and long-term likelihood of success. The BRI will go ahead with or without Australia. More active Australian engagement with the BRI might assist in achieving better governance and development outcomes. For example, the financial resources China is willing to commit to the BRI could be used to leverage Australian funds and project evaluation expertise in a boost for regional aid and development. And Chinese investments in Australia, whether badged as part of the BRI or not, will still need to go through Australia’s rigorous foreign investment approvals regime. The Australian Treasurer retains the prerogative to reject bids they deem contrary to the national interest. The BRI does not bind Australia to China to the exclusion of an open, competitive bidding process for greenfield or brownfield investments. It may, however, act to increase Chinese interest and the value of Australian assets, and in some cases, Chinese companies may emerge as the only bidders.

4. The question of how the BRI benefits Australia

Limited economic benefits have also been cited as justification for hesitation on Australia’s part. Australia already has extensive trade and investment ties with China and as a high-income country with a solid credit rating attracting funding at competitive interest rates is, in a general sense, not difficult. Exactly how much new money China is putting on the table for the BRI is also not clear. Yet the fact that trade with China was already booming did not stop the Australian government from actively pursuing initiatives such as ChAFTA. And some Australian regions do struggle to attract the investment needed to support local jobs, as the government’s own Northern Development Strategy makes plain. There is also a regional dimension to Australia’s national interest with many emerging economies in the Asia-Pacific unable to secure the financing needed for infrastructure upgrading. For its part, Australia’s business sector has encouraged the government to take a more proactive stance on BRI engagement.

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By Kimkong Heng, Assistant Dean of School of Graduate Studies, University of Cambodia
Sovinda PO, master’s degree student in International Relations at the School of Advanced International and Area Studies, East China Normal University, Shanghai, China

The BRI and the Way Forward for Cambodia

To reap maximum benefits from this highly ambitious infrastructure development and investment initiative, Cambodia needs to work to expedite its reform processes and ensure its political stability. First and foremost, Cambodia must make sure its 2018 national election will not scare investors too much. Reports have shown a noticeable drop in real estate investment over the first quarter of 2017 prior to the Cambodian commune election in June this year and the much-anticipated and much-feared national election in July next year (May, 2017b). Should something go wrong, say, a civil war as frequently warned by Prime Minister Hun Sen, Cambodia will be at a disadvantage and lose out on what the Chinese Belt and Road Initiative has to offer, not to mention other investment prospects.

Second, Cambodia has to continue to fully address many burning social issues ranging from corruption to nepotism and impunity to social injustice. Although China’s aid and loans have often arrived in Cambodia in a nostrings-attached fashion and this practice is most unlikely to cease anytime soon, it is imperative that the Cambodian government be willing to tackle the issues head-on if it wishes to see and enjoy real economic prosperity throughout the country. With corruption and other contentious issues still looming large, perhaps it could be that Cambodia will seriously lag behind its neighboring countries in terms of economic growth, public engagement and trust, social solidarity, and national reputation on the global stage. In this respect, the exciting prospects of China’s OBOR initiative would be challenged, if not diminished.

Third, Cambodia would stand to lose if it does not begin to aggressively and heavily invest in building its human capital. Having been the unfortunate victim of genocide for nearly four years from 1975 to 1979, followed by the Vietnamese occupation and protracted civil war, this war-torn country has begun its national restoration process from scratch as almost all of its intellectuals were liquidated or forced to flee the country. Although remarkable improvement has been made to its human resources over the past decades, Cambodia is still facing serious challenges regarding its skilled labor force. The lack of skilled labor could translate into employing foreign 12 professionals or technicians for high-paying jobs, while many Cambodian workers perform the unskilled ones. Thus, Cambodia would not be able to derive benefits as substantial as it should from China's project of the century.

Fourth and importantly, Cambodia has to seek to diversify its foreign policy to avoid falling completely within the Chinese sphere of influence. Jumping on the Chinese bandwagon at the expense of its relations with its Southeast Asian neighbors and the US as well as the US allies would definitely not be the best option for Cambodia, although China is Cambodia’s largest foreign investor and its most generous economic and military supporter. An option for Cambodia to ensure its prosperity, sovereignty, and foreign policy autonomy could be to enhance its relations with all the countries in the region and beyond. If Cambodia does not adopt an omnidirectional foreign policy – making as many friends as possible – this small state would risk losing its independent foreign policy to China and become a true Chinese patron. Thus, it is vitally important for Cambodia to restrain itself from alienating others while relying solely on China’s unconditional aid and loans. This Chinese inclination may seem effective in the short term, but it would not be beneficial for the country in the long run.

Finally, in addition to ensuring political stability, tackling critical social issues, building up human resources, and forging flexible self-reliant foreign policy, Cambodia has to take its relationship with its ASEAN counterparts seriously and do whatever it possibly can to enhance ASEAN unity and centrality. As a member of ASEAN, Cambodia has garnered great economic and geopolitical benefits from this regional organization. Cambodia’s value and leverage ability are enhanced, Mahbubani and Sng argue, with its current ASEAN membership, without which this small state would be less capable, if not incapable, of taking advantage of its geopolitics and ASEAN privilege. In this regard, Cambodia not only needs to settle its domestic affairs but also improve its foreign policy by fostering good relations with its neighboring countries and strengthening its role and relevance in ASEAN.

Conclusion

It is undeniably true that Cambodia-China relations have gone a long way, dating back more than two thousand years, and therefore both countries have regarded each other as “close friends,” at least from the Cambodian side.

The fact that Cambodia chooses to bandwagon with China should be seen as a common form of Cambodia’s diplomatic behavior. As a small state in its developing stage, Cambodia is in desperate need of support and investment from all corners of the world. Embracing the BRI is apparently and rightly what Cambodia should do as the project aligns with the kingdom’s national development strategy, in particular, the Rectangular Strategy and the Industrial Development Strategy 2015-2025. In this regard, the BRI is a grand development plan Cambodia can take advantage of to realize its national aspirations to become a middle-income and high-income country in the next few decades.

However, Cambodia’s total acceptance of China’s Belt and Road Initiative can be a mixed blessing, considering a strong likelihood that Cambodia may fall into the Chinese debt trap and China’s sphere of influence. In addition, Chinese investments and development assistance, outside or inside the BRI framework, which very often target the few Cambodian elites, not the general public, may facilitate corruption and nepotism, further the exploitation of natural resources, and worsen human rights records in Cambodia. More importantly, as Cambodia enthusiastically supports China’s BRI and continue to receive China’s “no string attached” aid and loans, its foreign policy will be undermined and formulated in favor of China’s broader interests and influence in the regional and international arena.

Recognizing these challenges, this paper recommends that Cambodia actively engage in its many reform agendas, including legal, educational and health reforms, preserve and enhance political unity and stability, strive to resolve key domestic issues, strengthen human resources, and pursue independent foreign policy. To move forward and remain relevant in the Southeast Asian region, the wider Asia-Pacific region, and the global community, Cambodia needs to enhance its relations with countries in ASEAN and work hard to foster ASEAN unity and centrality, while also adopting a pragmatic open-door foreign policy – making as many friends as it possibly can.

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By The Association of Southeast Asian Nations (ASEAN)

FDI flows into ASEAN in 2016 remained high despite a decline to USD 97 billion, which reflects the general downfall trend of global FDI flows into the developing economies.

FDI flows from most ASEAN Dialogue Partners and intra-ASEAN investment actually increased, with the latter reaching an all-time high and accounting for a 25 per cent share of FDI flows into the region.

However, these increases were not enough to help overcome the decline which was due to divestment, acquisition of foreign assets by ASEAN companies in their home countries and repayment of intracompany loans by affiliates within the region.

Many foreign companies have a long historical association with the region, some dating as far back as the 1800s and they continue to invest and expand in the region.

This year’s Report examines the historical investment development of two Dialogue Partners of ASEAN, namely the European Union (EU) and India. Major multinational enterprises (MNEs) from these countries have been present in ASEAN in a wide range of industries. Many of them operate in multiple locations across the region in different segments of the value chains.

This year’s Report also features the development of economic zones in ASEAN. This is a welcome follow-up to the “ASEAN Guidelines for Special Economic Zones Development and Collaboration” adopted by ASEAN Economic Ministers (AEM) in 2016. ASEAN has at least 1,600 economic zones of various types.

These zones, ranging from free trade zones, export processing zones, IT parks to mega special economic zones, have played a significant role in the socioeconomic development in the region and in attracting FDI. Given the rapid economic growth and demand, ASEAN Member States continue to develop more economic zones to boost FDI.

Policy makers, entrepreneurs, and other stakeholders may find this Report useful in understanding economic zones in ASEAN, as well as the business and investment development in the region in general.

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Joint venture solar facilities earmarked for powering East Coast Rail Link and Southeast Asia port expansions.

Solar energy: Environmentally friendly and BRI benefitting.

China has announced it is to back moves to build Malaysia's biggest solar-power plant. The project will see a 61MW solar facility established at a 110-hectare site in Kuantan, the capital of Pahang, Malaysia's third-largest province. From Malaysia's point of view, the installation marks one more step on its road to establishing a clean-energy network, while China sees the facility as vital for powering the further Southeast Asian expansion of the Belt and Road Initiative (BRI), the country's ambitious infrastructure development and trade facilitation programme.

Under the terms of an agreement reached at the end of last year, the Nanjing-based ET Solar and Northwest Electric Power Design Institute (NWEPDI), a division of the China Power Engineering Consulting Group, will work with UiTM Solar Power, a Selangor-headquartered solar photovoltaic developer, to build and operate the new facility. When completed, it will be the largest of the 42 new solar installations scheduled to be built at sites across Peninsular Malaysia, Sabah and Labuan in the run-up to 2020. Malaysia's Energy Commission hopes to bring 360MW of new solar power capacity on-stream over the next three years.

The Kuantan facility is expected to generate enough clean energy to power 80,000 households when connected to the national grid in November this year. ET Solar's second major Malaysian project, it comes in the wake of the company's work on a number of large-scale installations across the world, including sites in the UK, the US, Germany, Japan, South Africa, Chile and Turkey.

Its first project in the country was commissioned in April last year and saw the company establish a 12MW solar-power plant in the northern Kedah state. The facility came online at the end of last year and currently generates enough energy to power more than 5,000 households.

Apart from Chinese companies, South Korean businesses have also lent their expertise to help meet Malaysia's clean-energy aspirations. In December last year, the Seoul-headquartered Hanwha Energy Group announced it had been appointed to install and manage a 48MW solar-power facility in the northwestern Perlis state. With construction work scheduled to begin next year, it is expected to power 15,000 households when it comes online in October 2020.

Taken together, the Kuantan, Kedah and Perlis solar plants form part of an evolving clean-energy network designed to generate electricity for commercial and household use. A proportion of their output has also been earmarked for powering a number of BRI-related infrastructure projects, most notably the East Coast Rail Link, the expansion of Kuantan Port and the completion of work on the Pan-Borneo Highway.

The facilities are also key elements in the Malaysian Solar PV Roadmap 2030, which is likely to be unveiled later this year. The work of the Malaysian Investment Development Authority, the Roadmap is expected to act as the blueprint for delivering the country's integrated solar-energy ambitions.

Prior to the official unveiling of the Roadmap, a number of the expected proposals have already been enacted. In October last year, for instance, work began on stepping up the manufacture of solar photovoltaic cells, with the country aiming to be the world's second-largest manufacturer, after China, of such units – vital links in the solar-power generation chain.

Over the medium-term, more opportunities are expected to emerge for BRI investors as Malaysia continues to prioritise the expansion of its sustainable-energy sector in a bid to cut greenhouse emissions, reduce the nation's reliance on its oil and gas reserves and improve energy efficiency, while also bringing down the overall cost of power generation. The country is aiming to produce 2,080MW of energy from renewable sources by 2020, with solar power accounting for more than half of that total.

Geoff de Freitas, Special Correspondent, Kuala Lumpur

Speech by Mahmoud Mohieldin, Senior Vice President of the World Bank Group

Good morning. I am very happy to represent the World Bank Group at this opening ceremony to discuss an initiative which has the potential to impact billions of people. Before I give my remarks, I want to acknowledge Mr. LI Yong, Director General of UNIDO, Mr. Heinz Fischer, former President of the Republic of Austria, Mr. WANG Xiaotao, Vice Chairman of the National Development and Reform Commission of China, Ms. Debora Serracchiani, President of Region Friuli Venezia Giulia in Italy, and Mr. WU Zhong, Director General of the Finance Center for South South Cooperation (FCSSC) and congratulate UNIDO and the FCSSC for organizing and supporting this important event.

This place, the UNIDO headquarters, reminds me of the pyramid builders. You know pyramids as massive constructions which last forever. And one of those contemporary builders was a fellow Egyptian Ibrahim Helmi Abd-elRahman, who was the first and founder Executive Director of UNIDO. He is known back home as a scientist specialized in building institutions, globally like UNIDO, nationally, like the Institute of National Planning, and he spent the rest of his life until he passed away 20 years ago building institutions for development in his home village, which is also mine. What he did is very relevant to today’s topic on how to link global initiatives to national policies, with local impact.

The Belt and Road Initiative has the potential to be global in its reach, but local in its impact. It will reach 65 countries -- potentially affecting 4.4 billion people and leveraging 40 percent of the world's GDP. Huge investments will be channeled toward infrastructure projects across Asia, Africa, and Europe. Six new land corridors will be rehabilitated, and maritime connectivity will be improved. And it has the potential to help countries reach their national objectives embedded in the Sustainable Development Goals, in areas such as jobs, poverty, infrastructure, and sustainable cities.

This initiative can be transformative for all cities along the new corridors, and could bring unprecedented opportunities for their economies and their population. The vision behind these investments supports an economic agenda to promote trade across domestic and international borders, thereby seeking to enhance prosperity among local populations.

It is important that the projects embedded in the initiative promote economic growth in a way which ensures a fair distribution of benefits within and across cities. To be consistent with the Sustainable Development Goals, they should also promote social inclusion, adequate financing, environmental sustainability and inclusive economic growth.

Lower costs and travel time increases the mobility of firms and workers, but this also increases the competition between cities for jobs and talent. We know that big transformative infrastructure projects might be associated with concentration of resources in a few places, and the newly created benefits might be unequally redistributed within and between cities.

How can we maximize welfare impacts and avoid adverse consequences? For cities along these corridors, transport infrastructure is a necessary but not wholly sufficient condition for development.

Complementary policies and investments -- in addition to transport infrastructure – will be critical if we are to leverage more fully these large corridor investments. This includes better spatial and land use planning, improved policy and regulatory investment frameworks, a healthy business climate, and strengthened trade facilitation and logistics capabilities.

Ensuring that the new infrastructure is low-carbon and climate-resilient is equally important. When implementing such ambitious transport projects, it is important to include improved environmental regulation, pollution reduction measures, and incentives for the adoption of new green technologies and higher environmental standards.

Science, Technology, and Innovation – key multipliers for reaching the SDGs – are critical to position cities with the technology of tomorrow, not just the legacy technologies of today. Access to data will be essential to the development of new technologies and their application to key industries.

Uncertainties on the financing schemes of such major investment projects raise concerns regarding the implementation and the equitable distribution of the financial burden across locations. Varied modalities of co-financing should be considered to ensure that there is sustainable infrastructure financing across domestic institutions and across countries, based on shared interest. New financing vehicles that can more efficiently bring together public and private resources should also be explored.

The World Bank Group is already deeply engaged in countries along the BRI corridor, based on our joint country partnership frameworks. The World Bank has commitments of about $80 billion dollars for infrastructure in Belt and Road countries, with numerous additional projects addressing infrastructure, trade, and connectivity in its project pipeline. Furthermore, the World Bank Group helps countries to address trade and connectivity issues by providing advisory services and analytics. IFC, our private sector arm, is engaged in numerous BRI countries supporting private sector engagement, and MIGA, the World Bank Group’s risk insurance arm, provides guarantees for outward foreign direct investment.

These opportunities and challenges for this ambitious project are immense, and we can indeed maximize its benefits if the partners – including host countries, the private sector, CSOs, international organizations, and many others – all work together closely. The World Bank Group is delighted to work with UNIDO and all the partners of the Belt and Road Initiative to maximize these investments for people and the planet.

Speech by Mahmoud Mohieldin, Senior Vice President of the World Bank Group. 2017. Belt and Road Initiative: A global effort for local impact. Connecting cities for inclusive and sustainable development. © World Bank. http://www.worldbank.org/en/news/feature/2017/09/26/bridge-for-cities-speech-by-mahmoud-mohieldin License: Creative Commons Attribution license (CC BY 3.0 IGO)