UBS expects China’s ‘One Belt’ investment to hit $200 billion in 3 years

Mainland China’s outward investment in “One Belt One Road” regions is tipped to surge in the next three years.

If global investment bank UBS is right, then mainland China’s outward investment in its ambitious “One Belt One Road” initiative to join the economies of China, Central Asia, Southeast Asia and Europe could double over the next three years, to as much as $200 billion.

“‘One Belt One Road’ investment is not just about energy and transport infrastructure, we see increasing investments from real estate, technology and finance,” UBS H-share strategist Lu Wenjie said in a conference call on Tuesday according to the South China Morning Post. “These sectors accounted for 50% of China’s foreign investment in the first half of 2015.”

Huawei, the telecommunications equipment giant and e-commerce leader Alibaba are among the private enterprises getting involved with investment in India this year, said Lu.

Mainland outbound direct investment jumped 14% in 2014 to a record $123 billion  and it’s expected to exceed $150 billion this year.

Chinese railway projects in Laos, Thailand and Indonesia will see significant progress ove the next six months, said Robin Xu, UBS transportation and infrastructure analyst.

Xu estimated the contracts to be signed will exceed US$20 billion, and that the China-Laos, China-Thailand and Jakarta-Bandung railways would be completed in three to five years.

“The future of the overseas railway market is very optimistic as long as the capital is put in place, since many countries are looking to improve their railway networks, including the US and Australia, which is not covered in ‘One Belt One Road’,” Xu said.



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