Belt and Road: Full steam ahead

There is uncertainty about global free trade agreements, but China’s Belt and Road initiative is opening up opportunities for goods in the border markets, according to Florence Chong.

As part of the China Belt and Road initiative, factories and logistics buildings are appearing in remote locations and forming the backbone of an emerging commercial route.

In Ethiopia’s northern Amhara regional state, close to the port of Djibouti, the first factories of Kombolcha Industrial Park are expected to begin production in February. Kombolcha is some 370km from the capital, Addis Ababa. But goods produced at this new US$90m (€73.5m) Chinese-built industrial park will soon be transported along a 752km Ethiopia-Djibouti rail link to markets elsewhere in Africa – and beyond.

The industrial park and rail line are typical of projects springing up in East Africa, and elsewhere, along the route of China’s Belt and Road programme, which passes through 65 countries.

In this case Ethiopia has been cooperating closely with China. Partly with the help of Chinese finances and experience, Ethiopia will develop the development belt of the long-running Ethiopia-Djibouti railway line. With what China is financing the development of a port, with costs of US $ 590 million, in the small neighboring state of Ethiopia, Djibouti. With this, Ethiopia hopes to attract its new investment industrial park from China, the United States and South Korea, which will also help its economy grow thanks to the initiative of the Belt and Road of China.

Moving miles away, in Cambodia, a poor country with no exit to Southeast Asia, which also enjoys the generosity of China. Since they have built and operate today in its Sinhanoukville Special Economic Zone, a project that has more than 100 companies from China, Japan, the United States and Europe.

According to the China’s Belt and Road portal, Chinese businesses have helped build 56 economic and trade co-operation zones in 20 countries along the Belt and Road, with a combined investment surpassing US$18.5bn.

Adam Rush, Cushman & Wakefield’s regional director for Greater China, says: “Infrastructure is at the heart of BRI [Belt and Road initiative], and if you are talking about property, BRI is having an impact in three sectors: logistics and logistics-related parks, hotels, and, to a lesser extent, residential projects.”

Publicated: JANUARY/FEBRUARY 2018

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