Property

Opportunities and Challenges of The Belt and Road Intiative

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Launched in 2013 and involving a total investment of more than US$100 billion, the Belt and Road Initiative focuses on creating new strategic routes and investment opportunities with China, passing through 65 countries across Asia, Europe, the Middle East and Africa. So far, most of the projects involved in the Belt and Road projects have been energy and infrastructure investments in Asia. However, over the mid- and long-term, these projects are expected to create synergistic potential among various industries in Mainland China including the property sector with professional services like infrastructure valuation, hospitality consultancy and property appraisals.

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To reduce China’s excess industrial capacity, infrastructure networks are the top priority for the Belt and Road Initiative as it will boost traffic and open new investment markets; the property market is also expected to benefit from scheme.
For example, Forest City, a project developed by Chinese property developer Country Garden, is connected to the Trans-Asian Railway via the Kuala Lumpur–Singapore High-Speed Rail Section.Therefore, with the effects of synergised railway transportation networks, real estate in Asia has become one of the most sought-after global investment choices. Benefiting from the ongoing construction of several large-scale projects, Hong Kong can then play a role as a "super-connector" to bridge mainland China and global markets. Additionally, local Hong Kong companies can offer various professional services during this pinnacle point of internationalisation.

Given the comprehensive coverage of countries in the Belt and Road Initiative and large amounts of investment, China is required to inject at least several billion dollars for every single project. If some investments are not sufficiently planned, the initiative could bring challenges to risk management of certain countries and enterprises and projects would be deemed ineffective, or so called ‘White Elephant’ projects. Meanwhile, exchange rate fluctuations, different legal and tax systems among countries, as well as geopolitics could add extra uncertainties for development projects across the various countries.

Looking back at the past year, several key milestones were established which included the approval and adding of The Belt and Road Initiative to the Party Constitution during the 19th CPC National Congress. Led by a group of national leaders in May, a number of cooperative agreements were signed following the Belt and Road Forum in Beijing, further reaffirming China’s ambition in the Belt and Road Initiative.

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