After the ambition of the Beijing summit, back in May 2017, comes the reality of financing the Belt and Road initiative (BRI). How might the risks of building and operating BRI schemes be spread and what will be the role for private investment?
Notwithstanding China’s substantial foreign currency reserves which are being made available for investment, the BRI is so vast in its ambition that China simply does not have the money to publicly fund all BRI schemes. Furthermore, unless BRI risks are carefully spread, there could be real concerns about China’s return on investment and the ability of some countries with poor credit ratings to repay any BRI loans.