Sun, 24 Sep 2023

A view of Yangpu port in the Yangpu Economic Development Zone in Danzhou, Hainan Province, southern China, July 22, 2022. /Xinhua

The Belt and Road Initiative (BRI) is a very important investment theme this year for China and the world, especially in light of recent economic pressures, said Robin Xu, head of Asia industrials research at UBS Investment Research at a media conference on Tuesday.

Over the past several years, Xu said Chinese contractors have received "very good orders" from countries along the Belt and Road, and UBS expects more orders coming in the future.

In 2022, Chinese contractors gained $85 billion in revenue in BRI countries and signed $130 billion worth of new contracts, UBS said. 

China's direct investment into BRI countries totaled $242 billion in 2021, making up 46 percent of the country's total outbound foreign direct investment.

According to UBS calculations, the potential infrastructure needs of the 64 countries along the BRI could reach about $1.1 trillion per year, Xu said, adding that on more optimistic assumptions, infrastructure needs could reach $2 trillion a year.

When it comes to who will benefit from BRI investment, Xu said over the next 10 years, those who stand to gain make up the entire industrial chain of China's infrastructure construction sector. These, he said, include Chinese contractors, construction machinery companies, and raw material suppliers. 

Among the world's top 250 international contractors, 79 are from China, accounting for about 28 percent of all contractors' total revenue in 2021, UBS said.

Chinese construction firms have a large share of the international contracting market for electricity, water supply, and transport, Xu said. He said Chinese construction machinery is expected to replace the U.S. and Japanese construction machinery brands. 

Meanwhile, China's leading cement companies are looking to expand production capacity in countries along the BRI, while expanding overseas infrastructure investment could also ease domestic steel overcapacity, UBS said.

In recent years, the Chinese construction machinery sector has performed well in emerging markets, mainly because of the attractive price, good quality, sales network, and excellent service. And as infrastructure investment moves forward, construction machinery is likely to be the most positive export sector in the coming years, UBS said.

Source: CGTN

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