US-China trade war, financial transparency to spur more belt and road projects, says Standard Chartered
- China’s commitment to adopt key elements of financial practices used by World Bank and IMF to ensure projects’ debt sustainability will lead to more lending opportunities in countries covered by belt and road, says banker
The ongoing US-China trade war and Beijing’s commitment to adopt internationally recognised best financial practices will lead to more infrastructure projects in countries covered by the Belt and Road Initiative, according to Standard Chartered.
The global bank, which serves Chinese clients’ project financing needs in 45 markets across belt and road, expects continued growth in business this year despite earlier criticism that some projects have mired host nations in “debt traps” because of their questionable economics.
President Xi Jinping, who launched the project in 2013 to foster closer trade and investment between China and its partners, said last month it will adopt internationally recognised principles to ensure they were more environmentally and financially sustainable and multilaterally financed.
To help achieve this, Beijing said it will advise governments involved in the initiative to adopt key elements of the sustainability analysis framework used by multilateral bodies like World Bank and International Monetary Fund.
“The belt and road’s progress will not be hampered by debt trap concerns; on the contrary, it will be bolstered by China’s signal during last month’s summit in Beijing that it will encourage practices to ensure projects’ debt sustainability,” said Kelvin Lau Kin-heng, senior economist for Greater China at Standard Chartered.
