Corridors of power: ‘Belt and Road Initiative’ will bolster trade while strengthening Beijing’s economic and political influence

Last November, 60 lorries containing Chinese-made goods completed a landmark, 3,100km journey from Kashgar in China’s Xinjiang province to Pakistan’s port city of Gwadar on the southwestern coast of Balochistan. The merchandise was transported from there by sea to various destinations in Africa.

In Ethiopia, China’s Poly Group and GCL Grouptook advantage of an investment void left by retreating Russian and Malaysian companies to help the African country in its first liquefied natural gas export project that involves major infrastructure programmes in Djibouti in the horn of Africa.

Both projects show the grand scale and vast reach of Beijing’s trade and economic strategy, “Belt and Road Initiative”, that will see more than 1.5 trillion yuan (HK$1.72 trillion) ploughed into an infrastructure investment network stretching more than 10,000km in 60 countries and affecting the lives of 4.4 billion people in Asia, Europe, the Middle East and Africa.

Hilary Lau, energy and infrastructure partner at Herbert Smith Freehills, is advising stakeholders on several belt and road projects. He says the key to its success lies with Chinese companies tying up with local entities to maximise benefits.

“It’s about Chinese and foreign partnerships in the ‘Belt and Road Intiative’,” says Lau, whose firm is involved in the Pakistan and Ethiopia-Djibouti projects. “This is one of the key things to stress. It’s a joint initiative led by China, working with local parties to make it happen.

“Other parties that are interested can join in – it attracts international co-operation. A lot of these projects will be supported by Chinese money, and also non-Chinese money.”