Overseas direct investment (ODI) from China may be shifting toward the Belt and Road Initiative (BRI) as Chinese companies face growing difficulties entering the US. Chinese and foreign experts said the shift could bring significant changes to the global investment landscape, and could benefit BRI countries and regions with investment grade ratings.
The comments come as Chinese ODI to the US fell to a seven-year low in 2018, while steadily growing in BRI markets.
Chinese investment to BRI markets grew at an annual rate of 5.2 percent from 2013 to 2018, or $90 billion, Ministry of Commerce data shows.
The Global Times reached out to a dozen Chinese companies and top industrial leaders in their respective fields for their takes on the trend.
Company representatives typically declined to comment on their firms' investment plans in the US, citing disclosure concerns. However, many have shown enthusiasm to ride on the momentum started by the BRI, even as many of these firms cannot be categorized as typical BRI firms, like infrastructure giants engaged in overseas projects on state credit.
China is set to hold the second Belt and Road Forum for International Cooperation. Six years after its inception, the initiative has been generally welcomed by developing countries and regions and emerging economies. Moreover, the China-proposed global connectivity program has recently gained official endorsements from major developed Western economies, such as Italy.
The response from Chinese companies coincided with a report that Baker McKenzie released, which said more than 80 percent of 200 respondents from the Chinese mainland and Hong Kong now see the BRI as either hugely important or fundamental to their business strategy.
"In certain sectors such as infrastructure, Chinese firms may be able to shift their international infrastructure-related investments away from the US toward BRI partner countries," Rajiv Biswas, APAC chief economist at IHS Markit, told the Global Times.
Biswas said the risk of investing in many BRI partner countries may be higher than in the US, but there are "investment grade" alternatives. For example, a number of EU partner countries and Indonesia are poised to offer an attractive long-term investment environment for sectors such as infrastructure or manufacturing.
Courtesy of globaltimes.cn