China could pour as much as USD$10 trillion into infrastructure projects for its much-vaunted Belt and Road initiative over the next four to five years, according to the chairman of China Minsheng Bank.
Addressing the 2017 Belt and Road Investment Forum in Beijing, China Minsheng director Hong Qi (洪崎) said infrastructure development in participating countries represented a “historic” investment opportunity.
“With respect to infrastructure alone, over the next four to five years there is room on the market for USD$10 trillion,” said Hong.
“Irrespective of whether its governments, enterprises or financial institutions, this is a rare and historic opportunity.”
Hong pointed out that the vast majority of countries participating in the Belt and Road initiative are still emerging economies, presenting huge opportunities for financing and investment in infrastructure, rail transportation, integrated urban development and trade.
According to Hong the more than 60 Belt and Road countries had a total economic output of $23 trillion in 2016, with annual infrastructure investment accounting for roughly 10% of GDP.
While Beijing has clamped down on what it deems to be “irrational” forms of overseas investment in sectors such as real estate and entertainment this year, leading to a plunge in certain key FDI categories, it’s continued to flag vigorous support for capital flows to Belt and Road projects.
As of the end of 2016 Chinese companies had invested in excess of $18.5 billion in Belt and Road countries, while during the period from just January to October of this year new investments amounted to $11.18 billion, with the signing of another $102.07 billion in overseas project outsourcing contracts.
