Belt and Road Initiative offers us infinite possibilities and opportunities

The Belt and Road Forum for International Cooperation held in Beijing earlier this month was a huge success. With head of states and government representatives from more than 130 countries attending and dozens of documents signed, there is no question that the Belt and Road (B&R) Initiative has truly gone global. It is amazing that an initiative that is only three and a half years old has gathered such great momentum. Apart from China’s strong appeal underpinned by rising national power and international status, the exceptional concept of further market integration and creating a regional economic cooperation framework to the benefit of all is also a key reason why so many countries have embraced the initiative with open arms.

Hong Kong has no reason to pass up this golden opportunity to be part of a magnificent undertaking. To the relief of Hong Kong people, the Legislative Council finally approved the funding necessary for Hong Kong to join the Asian Infrastructure Investment Bank (AIIB). Initially, there was strong skepticism among opposition parties, especially those fixated with a “localist” agenda, on Hong Kong joining the AIIB. However, with the Japanese government having sent a high-level envoy to the Belt and Road Forum and expressing its clear intention of joining the AIIB, all G20 countries — except for the United States — are likely to be members of the AIIB soon. There should now be no more doubt that Hong Kong has to be a member of the AIIB. Back in the days when the AIIB was still in the conceptual stage, there were suggestions that the AIIB could be headquartered in Hong Kong to take advantage of the city’s strengths as a global financial center. Unfortunately, this wonderful dream was shattered by the “Occupy Central” movement. This was another example of Hong Kong missing a great opportunity because of political squabbling.

Nonetheless, Hong Kong can still play an important role in the AIIB, the Silk Road Fund and other relevant projects. The 77 members of the AIIB have contributed billions of dollars as initial capital and the Chinese govern- ment has injected $40 billion into the Silk Road Fund but these funds are still far from enough to meet Asia’s needs for infrastructure construction. It is expected that there will always be demand for extra private financing to support all those infrastructure projects. Individual private investors may find it too risky to finance major infrastructure projects like railways, highways, power plants, airports and seaports in developing countries without government support. With the backing of AIIB and the Silk Road Fund, Hong Kong is best positioned to raise the necessary funds from global investors.

The public is now getting more familiar with the B&R Initiative, yet many still have various questions. One of the most common questions is: What benefits and opportunities will the initiative offer Hong Kong? To answer this question, we need to understand more about the countries along the B&R. Suffice to say that most of them are developing countries, with large populations but low levels of economic development and weak infrastructure. In order to achieve the goal of regional cooperation and economic integration, there has to be better infrastructure. After all, who would build a factory in a place where there are no roads or ports or stable electricity supply? In other words, during the initial stage of the B&R Initiative, the focus has to be government-led infrastructure building and Hong Kong’s role is more or less limited to providing finance and other supporting professional services. Once decent infrastructure is in place in some of the countries along the B&R, there will be massive opportunity for Hong Kong. Local businesses have long started setting up textile and other light industry factories in low labor-cost areas in the region; they are ready to take full advantage of similar opportunities arising from B&R regions. The city’s various professionals and serviceproviders will also enjoy lots of business opportunities offered by new markets along the routes. An important point to be noted is that the B&R Initiative will span decades and we should take a long-term view in assessing its impact and effect.

It is exciting to live in the era of B&R where opportunities and future possibilities are infinite. Imagine when the high-speed rail link between China and Europe is completed and goods can reach each other at relatively low cost in merely two days instead of two months by sea. Imagine when most of China’s needs for energy could be satisfied by imports from Central Asia or from the Middle East via the Pakistan port of Gwadar instead of going through the choke-point of Malacca Strait. The next generation may even enjoy new and exciting prospects that we are unable to foresee now and we in Hong Kong have to keep an open mind and watchful eye on developments related to the B&R.