China’s inaugural Belt and Road forum timely — HSBC
KUALA LUMPUR: China’s inaugural ‘Belt and Road Forum’, to be held from May 14-15, comes at a historic point in the course of economic evolution, said HSBC Bank Malaysia Bhd ( HSBC).
In a statement yesterday, the bank said China would b e showc a s i n g maj o r i n f rast r uc t u re projec t s to advance this ambit ious initiative, but the tone to be adopted by world leaders dur i ng the dia logue on trade could prove to be just as si g ni f i c ant for the initiative.
“The backdrop to the forum is one of uncertainty, as the new US administrat ion is reversing past policies that were designed to increase global economic integration whi le the UK is trying to negotiate a new relationship with its continental partners in the European Union,” it said.
The bank added that recent elections in several countries have marked a political shift, from the old order of left versus right, to a new order of nationalist ve r s u s internationalist.
It said that as policymakers and negotiators wrestle with their new terms of engagement, trade had begun to evolve too, as digital innovation and advances in logistics created opportunities by opening new markets for businesses, and challenging deeply- entrenched operating models.
“While rapid increases in the complexity of global supply chains may have peaked, what we’re now seeing is growing interest in inter- and intraregional trade.
“China’s role in driving these flows is increasingly important, and nowhere is this role more visible than through the Belt and Road Initiative ( BRI),” said HSBC chief executive officer Mukhtar Hussain.
He said China planned to stimulate cross- border trade by investing in rail, ports and power plants along centuriesold silk routes, including regions as far Europe, Africa and the Middle East.
The bank revealed that Chinese companies had signed 4,000 engineering contracts under the BRI umbrella, with a combined value of nearly US$ 70 billion ( US$ 1=RM4.34) in the first nine months of 2016.
It said China also anticipated its trade with countries along the land ‘ belt’ and marine ‘road’ would surpass
US$ 2.5 trillion, annually, in the next decade.
“The BRI is ambitious and positive. Given the uncertainties we face today, we should celebrate the fact that world leaders are gathering in Beijing, and we should exhort them to use the BRI as a catalyst for even greater international cooperat ion tomor row,” Mukhtar said.
The bank said, as emerging markets continue to develop and become consumer- driven economies, the expanding middle classes would demand a greater choice of goods, as wel l as, services like healthcare, educat ion and travel.
The bank forecast that about three billion people in today’s emerging markets would join the middle class by 2030, a social change that will pull the centre of gravity of human consumption towards Asia. — Bernama