Belt Road Future Trends
The Belt and Road (BRI) project symbolises the relaunch of the ancient Silk Road, highlighting how today's economic relations are based upon the historical roots which have linked East and West for centuries.
The idea of building an infrastructure system which boosts trade was envisaged by Chinese President Xi Jinping in September 2013 during a speech at Nazarbayev University in Kazakhstan, and later reiterated during a visit to the Indonesian parliament in Jakarta. On both occasions Xi promoted the development of the new routes and the establishment of political relations with every country in the Eurasian zone.
With the new Silk Road, China has a number of core fundamental objectives: political coordination, increased connectivity and trade flow between nations, financial integration into economies with the use of the Chinese Yuan as an international currency, cultural promotion between different regions, the absorption of the overcapacity of local companies, the providing markets to ensure the continuation of the high level of GDP growth, access to resource rich regions, and the global development of the Chinese economy.
On March 23, 2019, President Conte and President Xi signed a strategic agreement in Rome on Italy's entry into the Belt and Road initiative. This action marked Italy as the first G7 country to join the new Silk Road, the first founding country of the European Union, and the largest economy by GDP to be part of the project. The agreement joined 29 other institutional and trade agreements between Italy and China in various sectors, and represents a strengthening of positive relations between the two countries.
Currently in 2021, the BRI has 143 members, representing both countries and regions which have joined the mega infrastructure project launched by Beijing.
According to data collected by analysts from "Refinitiv" regarding the Belt Road Initiative, a total of 1,820 projects were announced in June 2020, with a total value of $2,300 billion. The transport infrastructure sector remains is at the heart of the initiative with a value of $1,040 billion, corresponding to 46% of the total value of Belt and Road projects, followed by the energy sectors (19%) and real estate construction (16%) (second quarter 2020 data).
During the pandemic, the outbound supply of medical equipment from China to other countries was dubbed the Health Silk Road, highlighting the strategic role political and trade relations plays between Beijing and the Silk Road countries.
Although some of the major investment projects have slowed down, undoubtedly linked to travel restrictions and the economic crisis that has impacted each region, Beijing has relaunched relations between member countries with a specific focus on medical supplies, covid vaccines and trade.
The strategic importance of the Belt Road is confirmed by the US president's plan to promote a similar initiative among G7 countries: Build Back Better World (B3W) initiative, which promises $40 trillion in infrastructure investments by 2035 in the southern regions of the world.
In relation to economic trends, China is the lead nation in terms of trade and export volumes, the first country for GDP with purchasing power parities, the first destination for FDI and among the large economies has the most tax and free trade agreements signed with other nations.
In the first quarter of 2021 Beijing increased the volume of trade with Belt Road countries by 21.4% to 2.5 trillion yuan. In May 2021, Italian exports to China increased by 75% a clear display of the benefit of being part of the initiative before and after the pandemic.