Belt and Road Initiative -1H2020

Read more about the latest developments of the “Belt & Road” Initiative (BRI) and its potential impact on the re/insurance industry.

Key takeaways

Overview of Belt and Road Initiative (BRI) progress

  • From January to June 2020, the value of newly-signed Chinese outward project contracts (OPC) with BRI countries reached USD 60.3 billion, down 5.2% year-on-year. The completed value of OPC was USD 35.6 billion in the same period.
  • Energy and power projects account for 58% of announced BRI investments this year. By region, Southeast Asia and South Asia attracted the greatest share (48%) of investments.

Special topic: COVID-19 and health risks in BRI countries

The COVID-19 pandemic continues to spread through BRI countries. Total confirmed infection cases globally reached over 14 million by 20 July. Emerging markets make up the majority of BRI countries but are particularly vulnerable to COVID-19, as well as to economic shocks, given their less established health and social protection systems.

We estimate that the countries making up the BRI region have a total health protection gap (HPG) of USD 177 billion in 2019, an increase of 60% in the past decade.

We expect emerging market central banks to continue to lower interest rates in 2020, alongside further easing in G7 countries, while the inflation environment should remain benign due to weakening demand. We forecast GDP growth of emerging markets globally to slow to -0.7% in 2020, or -2.9% for emerging markets excluding China.

As a result, the uncertainties faced by BRI projects in the following quarters are accumulating, which may drag on the progress of ongoing projects, drive up the risks involved in construction work and could even result in postponement of the projects in plan.


Expertise Publication Belt and Road Initiative -1H2020

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