Belt and Road pro­vides glow­ing ex­am­ple of growth

China Daily (USA) - - BUSINESS - By LUOWEITENG sophia@chi­nadai­lyhk.com

Stretch­ing across Eura­sia and Africa, with its huge rib­bon of newly-de­vel­oped in­fra­struc­ture, the high-pro­file Belt and Road Ini­tia­tive stands out as a re­fresh­ing ex­am­ple of growth for man­u­fac­tur­ers and pro­duc­ers in China’s en­er­gyguz­zling heavy in­dus­tries — that are grap­pling with the thorny is­sue of over­ca­pac­ity at home— an­a­lysts said.

The in­fra­struc­ture-hun­gry na­tions along the route may gen­er­ate enor­mous de­mand for in­dus­trial­met­als and en­ergy, said Zhu Yi, a Hong Kong­based an­a­lyst at Bloomberg In­tel­li­gence.

For Asia alone, the re­gion’s in­fra­struc­ture fi­nanc­ing needs will reach an es­ti­mated $8.2 tril­lion or even more from 2010 to 2020, with about $4 tril­lion to $6 tril­lion in in­vest­ments go­ing to coun­tries and re­gions cov­ered by the Beltand Road strat­egy, ac­cord­ing to the Asian Devel­op­ment Bank.

“Ex­pe­ri­ence shows that ev­ery 100 mil­lion-yuan ($15 mil­lion) of spend­ing on rail­way con­struc­tion can con­trib­ute as much as 3,000 met­ric tons to steel de­mand,” saidWu Yue­tao, se­nior re­searcher at gov­ern­ment think tank China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes.

In­dia, Brazil and the African coun­tries, in par­tic­u­lar, are set to take the torch of progress from China with a grow­ing ap­petite for steel and other ba­sic ma­te­ri­als in the con­struc­tion of in­fra­struc­ture projects.

This­may de­liv­er­somerespite to the over­ca­pac­ity woes in China, which is fac­ing the daunt­ing task of slash­ing steel pro­duc­tion ca­pac­ity by up to 150 mil­lion tons by 2020, said Zhu.

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