China Cannot Finance the Belt and Road Alone

Published on: 2017-09-08

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Alicia Garcia-Herrero, HKUST IEMS Faculty Associate, thinks that the Belt and Road Initiative’s financial goals can be met by borrowing from international banks, in addition to Chinese ones. European banks, as already biggest lenders to the Belt and Road countries, could be encouraged to further help with financing OBOR’s projects since many of them are appealing for Europe. Meanwhile Hong Kong has an important role to play in the international financing of the Initiative.

Read the Brief (PDF)

Key Points

  • The One Belt One Road Initiative holds great promise for the global economy, but will need a huge amount of finance.
  • Initial presumptions that China would be able to provide all the finance are now unrealistic.
  • Other partners should consider providing finance for some aspects, especially Europe which has a lot to gain from the project.

This Brief is based on a Bruegel blog article: http://bruegel.org/2017/05/china-cannot-finance-thebelt-and-road-alone/

Related Video

In an earlier interview with HKUST IEMS, Prof Garcia-Herrero compared the Belt and Road Initiative to the Marshall Plan, and suggested that the initiative is China’s way of carving out an economic and geo-political bloc for itself, with clear implications for RMB internationalization.

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[Bio] Alicia Garcia Herrero

[Event] One Belt One Road: Global Perspectives Luncheon Panel Discussion

[Thought Leadership Brief] China’s Belt and Road: Can Europe Expect Trade Gains?

Photo by taxrebate.org.uk / Flickr. CC. https://flic.kr/p/9Vybdi

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