China’s Belt and Road Initiative: Why Should You Take Notice?

In late July, my wife, Gita, and I were honored to receive an invitation to the exclusive Global Economic Leaders Summit (GELS) held in Changchun, China. The summit gathered over 500 attendees from across the world - international business executives, heads of state, and worldwide economic experts - to discuss and fundraise for the Chinese Belt & Road Initiative (BRI or One Belt One Road). The BRI is a recreation of the Silk Road for the development and improved connectivity of the 60+ countries it passes through in Asia, Africa and Europe.

Here are some observations from my visit to the world’s second largest economy.

Why Take Notice

Economic Prosperity. As the largest exporter worldwide, China will be able to reduce travel time for goods to the UK by 50% (with BRI). The BRI will also better connect China to the richest and largest market worldwide - the 500-million consumers in the European Union. The project is estimated to produce trillions of dollars in economic prosperity and see China become the center of the global economy.

Global Influence. As TIME states, BRI “covers 65% of the world’s population, three-quarters of global energy resources and 40% of GDP. China’s annual trade with OBOR countries already exceeds $1.4 trillion.” In constructing and controlling one of the most transformative engineering feats of human history, China’s economic development project will surely catapult the country to an economic superpower and shift geopolitics. This change in world balance will impact all countries and companies, no matter size or power.

Ease of Doing Business. In the long term, it is likely the BRI will bring advantages to Western companies: lower transportation costs and improved infrastructure lead to a growth of trading opportunities. However, in the short term, companies will face changing regulations, supply chain risks, and competition from locals. As the BRI progresses, domestic businesses may benefit from global expansion and international businesses may profit.