Facebook iconTwitter icon
B2B-Network:
China's bold Silk Road-style plan to link Europe and Asia faces setbacks and costs
China's bold Silk Road-style plan to link Europe and Asia faces setbacks and costs
Time icon19 January 2018, 9:01 am

In a bid that has frequently been sensationalized as a "modern Silk Road", China has invested more than $14 billion in creating railways, ports, and other avenues of trade and travel between Asia and Europe, which are otherwise connected only by Russia. China is set to invest much more in this Silk Road, but that may change, if their current difficulties, mostly resulting from relations with Pakistan, continue.

 

China's economic trade programm for Europe and Asia

Officially called the "Belt and Road Initiative", China has financed a wide array of projects across 65 European countries to improve its trading power. Many countries have welcomed the project, which runs alongside $26 trillion of investment by 2030, but Pakistan, often thought to be one of China's most unquestioned allies, has cancelled or renegotiated most of its Belt Road projects. Other countries are now doing the same as well, citing that they gain less than China despite the cost and required infrastructure and compromise.

Additionally, Hong Kong, a former colony of China that is technically autonomous but has arguably lost independence over time, is gaining more attention from its host country due to increasing investment from abroad as well as the growing importance of its naval ports in Belt and Road's current situation.

 

China could change its plans – for good or worse

Overall, investors who have watched China's actions in the past should watch them more closely now that China is experiencing several setbacks. It is unlikely that China will stop investing money in the United States, but in the current situation, its investments in Europe could surge or drop at any time. Hong Kong also stands to become more powerful in this current situation, and achieve more independence under the idea of "one state, two systems". Investors should particularly watch Hong Kong law and investment numbers as they become likely to change.

Loader