New challenges, trends emerge for Belt and Road projects

Ding Yining
Gaps in infrastructure will open further investment opportunities along economic corridors, while political and macroeconomic uncertainties pose downside risks, a research finds.
Ding Yining
New challenges, trends emerge for Belt and Road projects

China-invested industrial parks in Belt and Road countries may face new challenges under macroeconomic uncertainty, but new trends could open a fresh chapter for their future development, according to a latest Ernst & Young study. 

Jane Yang, Government and Public Sector and Infrastructure Leader at the EY Belt and Road Task Force, said: "The gaps in infrastructure of health and telecommunication areas in B&R countries will drive investment opportunities in the future and inject new impetus into global economic recovery."

According to the Ministry of Commerce, China’s non-financial overseas direct investment in Belt and Road countries in the first five months of this year increased by 16 percent, against the downward trend, which indicates that the Belt and Road Initiative is playing an increasingly important role in the internationalization of Chinese enterprises.

Chinese enterprises are also exploring new ways to get deeper involvement as the initiative deepens penetration into more regions and industry sectors.

Based on EY's analysis of 74 China-funded overseas industrial parks covering all six Belt and Road economic corridors, more than one-third are processing and manufacturing parks. Other types include multi-functional parks such as warehouse, logistics and commerce parks. 

The report highlighted challenges like macroeconomic and political instability and unfavorable business environment in host countries, lack of protective mechanisms in cooperating models and systematic planning.

Advisory Service Leader of EY Belt and Road Task Force Martin Qi expects new trends for overseas industry parks to emerge. Those include shifting to digital operations in the future, as well as diversity in operation models, urban-industry co-development initiatives and more connectivity with professional service providers.

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