The London-based affiliate of China’s biggest bank has launched a slew of new indices to provide investors with more information on the much-vaunted One Belt One Road initiative.
ICBC Standard Bank (ICBCS), a partnership between the Industrial and Commercial Bank of China and South Africa’s Standard Bank, has teamed up with Oxford Economics to produce two new economic indices that target the performance of the One Belt One Road region – the ICBCS Belt and Road Economic Health Index and the ICBCS Belt and Road China Connectivity Index.
The ICBCS Belt and Road Economic Health Index will be released on a monthly basis, and provides an overall measure of the comparative attractiveness of each economy based on 45 individual country indicators.
Macroeconomic performance and risk outlook will be both be key aspects of the index, while ICBCS will also provide a framework for tailored, comparative analysis.
According to the inaugural Economic Health Index the overall health of OBOR economies has risen to a decade-long peak on the back of improving fundamentals, compensating for high levels of sovereign and external risk.
The top macro-performers include the “Big Three” of China, India and Vietnam, and the “Nimble Four” of Qatar, Singapore, Estonia and the UAE. In terms of average economic health scores the Central and Eastern Europe region posted the performance for the inaugural ICBCS Economic Health Index.
The ICBCS Belt and Road China Connectivity Index will be released on a bi-annual basis, with the goal of providing an empirical measure of broad-based connectivity between China and other OBOR economies.
The Connectivity Index will monitor bilateral interactions across the three metrics of capital, human resources and trade.
The inaugural index indicates that overall connectivity between China and the median OBOR economy has doubled in the decade from 2005 to 2015, as services and human capital become a more prominent part of bilateral trade ties.
The Central and Eastern Europe region posted the strongest performance in the Connectivity Index, as China augments ties with more diverse and complex economies and reduces the comparative weight of commodities-dependent secondary industries.
According to Jinny Yan, chief China economist at ICBC Standard Bank, infrastructure will play a critical role in raising the connectivity of OBOR economies in future.
“As a result of our research we can see a clear link between investment in infrastructure and overall economic prosperity in Belt and Road countries,” said Yan.
“This explains why infrastructure is a central part of China’s Belt Road effort and why it is so crucial to unlock alternative infrastructure financing to ensure the initiative delivers on its goal of inclusive economic growth.”
Reports for the new indices are available for download at the ICBCS website.