International Finance Forum: The China 2021 Report

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New China Report covers Global  Economic Growth, the Belt and Road Initiative, Green Finance, Global Capital Markets and Fintech 

The International Finance Forum (IFF) has released its latest China Report,  outlining important China’s policy initiatives and the global cooperation opportunities in the context of COVID-19 and the Belt and Road Initiative. 

Established in 2003, the IFF is a non-profit and non-governmental unofficial international forum organization. Headquartered in Beijing, it is a high-level dialogue and academic exchange mechanism co-sponsored by business leaders and scholars in the global financial community and academic circles. 

The China 2021 Report includes 31 contributions from world’s leaders, premier policymakers, and financiers on global topics under the five themes: global economic growth in a post-pandemic era, the Belt-and-Road Initiative, green finance, global capital markets and fintech.

Han Seung-soo, Co-Chairman of IFF, and Chairman of the Silk Road International Association (SRIA) states that “COVID-19 has caused significant disruption to the world economy. However, the ecological implication of the pandemic is as consequential as the economic one, as the public health emergency is symptomatic of a deeper economic problem that undergirds it. To tackle the issue, a shift of focus to “new green infrastructure” is the key. The mission of the SRIA must be realigned to mobilize the investment necessary to cope with the ‘new normal’ after COVID-19. Producing solar and wind power on a large scale across the wasteland along BRI route would help generate clean power for the East, which should be a priority for the SRIA.”

Underscoring the key measure for a rapid global economic rebound in the post-COVID era, Jim Yong Kim, the 12th president of the World Bank, says in the Report that infrastructure investment should be “one of the priorities in helping developing countries recover more quickly from the pandemic”. Marcos Toyjo, president of the New Development Bank, notes that “new infrastructure must answer the demands of the fourth industrial revolution.”

The Report also highlights the role of BRI in fostering sustainability in terms of global development through the Silk Road Fund and the joint efforts of member countries in promoting green transition. To accelerate the green transition, the Report calls on the BRI countries for setting up carbon-neutrality targets in line with global sustainability goals and enforcing environmental protection legislation.

  • Lockdowns and social distancing: two-thirds of BRI projects hit by Covid-19 restrictions
  • Some governments are shifting priorities away from the BRI
  • No central bank reported a reduction in funding from China
  • Chinese development and state-owned banks still offer the most financial support
  • Financial markets provide very limited funding
  • Geopolitical tensions were cited as problematic by just 8%of respondents
  • 87% expect BRI projects to contribute to post-Covid recovery
  • 75% of these say the BRI can support a green recovery and sustainable development
  • There is greater scope for environmental standards and green energy/transport co-operation
  • Most respondents expect the BRI to boost GDP in the next five years
  • 88% of survey respondents expect the BRI to contribute to home-jurisdiction development
  • The BRI can help on infrastructure, job creation, and catalyze other foreign direct investment
  • There are low expectations of BRI alleviating poverty directly
  • Most development is taking place in transport and logistics, power, and oil and gas
  • Nearly 80% believe BRI projects are economically viable *
  • 23% said BRI debt is causing their external debt to rise to unsustainable levels
  • BRI debt terms appear similar or more favorable to other financing terms and conditions
  • Central banks would like to see BRI projects align more with national priorities.

The IFF China 2021 report is not yet available on the IFF website however please check back again later for access.

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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at silkroad@dezshira.com or visit www.dezshira.com

 

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