BRI a major opportunity for growth
> China’s Belt and Road Initiative will offer Malaysia and China wider prospects in terms of investment and infrastructure development: HSBC
KUALA LUMPUR: China’s Belt and Road Initiative (BRI) is a major opportunity of growth for Malaysia in terms of infrastructure development and its multiplier effects.
HSBC Malaysia CEO Mukhtar Hussain said HSBC is committed to supporting the growth and development of the BRI.
“In Malaysia, we’ve seen the full benefits of the BRI already played out in a number of successfully concluded corporate and infrastructure transactions. We think the momentum for growth is considerable. The BRI is a multiplier in terms of GDP growth. In the long term, it will help us establish essential infrastructure and improve the already strong relationship that exist between China and Malaysia,” he told a media briefing at the HSBC Asian Outlook & BRI Forum 2018 yesterday.
HSBC head of infrastructure and real estate group, Asia Pacific, James Cameron said Malaysia is one of the most successful markets of collaboration with China in the infrastructure space around BRI.
“That’s no accident. Some of the reasons for that is Malaysia has had a stable investment environment for people looking at infrastructure. It has a well structured procurement process. It has historical precedence in terms of house allocate risks between the developers, owners and the deliverers of infrastructure, and long history in terms of Chinese investments into the country. As such, we’ve seen a lot of opportunities, successful transactions and projects where Chinese capital and Chinese clients are currently investing, developing infrastructure in the country.”
Cameron said there is an opportunity for the Malaysian capital market to support these projects and opportunity for Malaysian clients to partner with the Chinese in the development of these infrastructure and headline investment perspective, or through large and complex supply chain, providing professional services, providing capital equipment, being subcontractors to the Chinese contractors, all of which will have a direct economic impact to Malaysia.
“We see this as a win-win. We see BRI with respect to Malaysia as a positive impact to the country,” added Cameron.
From a financier’s perspective, he said HSBC has seen much more consistency in the quality of projects in Malaysia and the bankability of projects here.
“This has allowed infrastructure projects in Malaysia to be able to attract capital from a range of different sources, whether international or domestic. Malaysia also has a material advantage over some of the countries in the region, with a deep local currency denominated capital market that supports infrastructure spend here, liquid banks that support local and international clients and a track record of delivering and designing projects. We expect to see (much) less projects not going ahead or facing delays that we’ve seen in other parts of the world,” explained Cameron.