Belt and Road Initiative 'will boost China's global power sector footprint'

Industry News | | MIC Customs Solutions |

China's ambitious Belt and Road Initiative could be significant, according to new analysis.

China's multi-billion dollar Belt and Road Initiative (BRI) will significantly boost the nation's status in the global power sector and could benefit a range of other countries too, according to a new report.

Ratings and risk analysis agency Fitch has published its Key Projects Database to examine the impact of the enormous project and said it has made a number of interesting findings based on the research.

It said China's footprint in the global power sector is set to "grow substantially" as recipient countries aim to attract Chinese investment and China seeks to export domestic power sector overcapacity as part of BRI.

"Several countries in Asia, Africa, the Middle East, North Africa and Europe will be key beneficiaries of outwards Chinese investment into their respective power sectors," the Fitch report stated.

Despite global commitments to reducing greenhouse gas emissions, the report predicted that coal is to remain the core power technology export from China as part of the scheme, although this "will lead to greater international scrutiny" of its environmental efforts.

Indeed, markets such as Indonesia, Vietnam, Bangladesh and Pakistan are all likely to be looking to China to finance and develop cheap coal plants in a bid to support their industrialisation efforts, Fitch said.

The analysis found that 67GW of BRI projects are still in pre-construction and a further 44GW of capacity is currently under construction.

"This highlights the vast impact that these projects could have in their recipient countries over the coming decade, supporting electrification efforts in a large number of markets globally," the document said, adding that exports of the technology behind coal and hydropower are also likely to benefit China by providing growth opportunities in future.

The BRI has been hailed by official Chinese news agency Xinhua as "a Chinese solution to global economic blues".

Launched in September 2013 after President Xi called for the creation of a 'Silk Road Economic Belt', the ambitious development campaign aims to boost trade and stimulate economic growth by building huge infrastructure projects to connect China to other nations.

Among the initiatives are railways to Russia and bridges to Bangladesh in the hope of creating a new trading route as significant as the original Silk Road, which could start a new era of globalisation.