Belt and Road Initiative -2H2020
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Read more about the latest developments of the “Belt & Road” Initiative (BRI) and its potential impact on the re/insurance industry.
Overview of Belt and Road Initiative (BRI) progress
- In 2020, the value of newly-signed Chinese outward project contracts (OPC) with BRI countries reached USD 141 billion, down 8.7% year-on-year (yoy). The completed value of OPC was USD 91billion in the same period, down 7%.
- Transportation projects accounted for 56% of announced BRI investments, followed by real estate projects (30%). By region, Europe attracted 30% of BRI investments, while rest of Asia (excl. China) accounted for 16%.
Special topic: RCEP, CAI to promote insurance opportunities in BRI markets
Against the backdrop of COVID-19 and ongoing US-China trade tensions, there has been increased emphasis in China on strengthening multilateral ties. The recently signed Regional Comprehensive Economic Partnership (RCEP) and the EU-China Comprehensive Agreement on Investment (CAI) demonstrate an acceleration of such efforts after many years of negotiation.
Multilateral economic agreements align with the principle of the BRI as set out by the Chinese government in 2013. This is to jointly form an open, inclusive and balanced cross-border economic architecture that benefits all. Such progress should boost trade most notably among BRI markets in Asia, with stronger investment in those markets and gains from greater market access. In particular, cross-border infrastructure investment along the BRI route in areas like transport and the digital economy will likely accelerate due to increased trade and regional integration.
Increased trade will support growth in cargo, marine and export credit lines of insurance business. Infrastructure development should benefit engineering and liability lines. Many personal lines will also gain from it. And, with continued rapid growth of the digital infrastructure sector and cross-border e-commerce, demand for cyber insurance is set to rise. Importantly, these developments will help to extend insurance best practice across BRI markets.