Business & Investment

How Asia Can Become a Winner in the Belt and Road Race between the United States and China

Infrastructure development has become one of the great battlefields of our time. The world’s three largest economies, the United States, China and Japan, are proactive in their economic and geopolitical influence through infrastructure financing and investment competition in emerging markets around the world, especially in the Asia-Pacific region. I am using it.

But how should governments and developers in the target countries deal with this new focus? How can they turn it into the interests of their people?

Obviously, this infrastructure competition will not only have a significant impact on the future of global trade and supply chains, manufacturing and services, but will also have a significant impact on the development of strategic and long-term partnerships.It was kicked by higher gear at $ 1 trillion in China Belt and Road Initiative (BRI)Awakens the world to the strategic impact of infrastructure and energy development.

It is also clear that China has brought its investment target closer to its home country. Recently released data from Baker McKenzie and the Rhodium Group China’s total FDI to North America and Europe fell 73% in 2018From $ 111 billion in 2017 to the lowest $ 30 billion in the last six years. This is due to the combination of new regulations in the country and increased investment screening in the target countries. This means that the Asia-Pacific region will be the focus of China more than ever.

Image: Baker McKenzie / IJ Global

On the other hand, the intensification of the US-China trade war has been accompanied by a much more aggressive US approach to building geopolitical influence in the Asia-Pacific region, including the start of the so-called US-China trade war. “Indo-Pacific Strategy”BRI’s fledgling but serious rival.

As these major geopolitical developments progress, Japan continues to play a long game. Japanese developers and financial institutions (including export credit agencies) have carefully and long-term built extensive networks and experience in infrastructure development in Southeast Asia and beyond, primarily to support poor domestic growth. rice field.

This, along with its relative geopolitical neutrality, means that Japan is in a unique position today that both China and the United States are being asked to participate in their respective infrastructure development efforts. To do.

Reflecting this unique position, at the recent summit in Tokyo, the leaders of Japan and five Southeast Asian countries will use government development assistance from Japan to promote more than 150 projects in the Mekong region. Agreed to adopt. Sponsoring the Indo-Pacific Strategy. Within three weeks, Japan’s Prime Minister Shinzo Abe stayed in Beijing and signed a Japan-China agreement to jointly promote about 50 private infrastructure projects in Asia and beyond (the first new in Thailand). “Smart City”). Japan Bank for International Cooperation has agreed to establish a joint financing framework with the China Development Bank.

It is not yet known how long Japan will be able to actively support and participate in both the Indo-Pacific and BRI efforts without pressure on the United States, China, or the Abe administration to effectively ally.

How Asia Can Become a Winner in the Belt and Road Race between the United States and China

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How Asia Can Become a Winner in the Belt and Road Race between the United States and China How Asia Can Become a Winner in the Belt and Road Race between the United States and China

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