• Trump's trade threats could end up boosting China's global economic clout

    29 Jun 2018 | Economic News


As the United States increasingly confronts China over trade and turns away from decades of championing lower tariffs, Beijing is seen getting a boost from its globe-spanning — and heavily marketed — investment program.

China’s Belt and Road Initiative is a massive infrastructure project that covers more than 80 countries, claims to seek the revival of historic Silk Road trade routes. Nomura estimates it could be worth at least $1.5 trillion in investments over the next 10 years.

The aim is to connect China with much of the rest of Asia, Europe, the Middle East and parts of Africa through massive commerce-boosting projects such as railroads, highways and ports — increasing China’s global reach all the while.

Carlos Casanova, Asia-Pacific economist at French trade credit insurer Coface, said there could be supply chain disruptions if access to the world’s largest economy is reduced, so that could force some countries involved in the Belt and Road to seek increased trade with China, in turn potentially providing it with more export markets as well.

Fred Neumann, co-head of Asian economics research at HSBC in Hong Kong, also said the Belt and Road Initiative can benefit China amid the trade standoff with the U.S.

”The underlying theme is really connectivity to foster trade relations,” Neumann said of the initiative. “And to the extent that they are succeeding in building this, it should help to offset potential drags on growth or drag on exports to the U.S.”


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