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China and the BRI in 2021 and Beyond

On March 25, 2021 the China-Luxembourg Chamber of Commerce (CHINALUX) hosted the webinar “China and the BRI in 2021 and Beyond” to explore the impact and influence of China’s Belt & Road Initiative (BRI) in 2021 and the near future. The webinar was opened by Ms. Zhujun XIE, President of CHINALUX, who welcomed the participants and thanked the speakers for their contributions.

H.E. Mrs. YANG Xiaorong, Chinese Ambassador to Luxembourg, held a brief video introduction where she thanked the organizers and participants of the webinar and stressed the role of the BRI in reinforcing development and international cooperation between Asia, Europe and beyond. Since the launch of the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road” by President Xi Jinping in 2013, 138 countries and 30 international organizations have signed cooperation agreements concerning the BRI with China. Luxembourg was the second EU member state to sign an MOU regarding the Belt & Road Initiative in 2018. Particularly the “Silk Road in the Air” airfreight project between Luxembourg and Zhengzhou has evolved into a vital line connecting China and Europe. H.E. Ambassador Yang particularly stressed the importance of this airfreight link as a lifeline between Luxembourg and China in the common fight to combat the COVID-19 pandemic.

During his brief presentation “China & the World: Post-Covid Opportunities”, Mr. James POMEROY, Global Economist at HSBC London, stressed the linkages between Chinese growth and global growth. As China’s economy has rebounded faster than the rest of the world from the impact of the COVID-19 pandemic, the country is expected to grow at 8% – 8.5% in 2021. Mr. Pomeroy pointed out Chinese growth will be a key driver of the global recovery in two ways – through increased domestic consumer demand and through Chinese FDI. Chinese demand is diversifying and the country is shifting from an importer of raw materials to a consumer-driven economy with an increased demand in finished products. A similar trend can be seen in the service sector, especially in tourism, where Chinese consumers are likely to be pivotal for global recovery of the industry. As China stands to replace the US as the world’s largest economy by the end of the 2020s, the global economy is increasingly being powered by China. As for Chinese investments abroad, which increasingly have been grouped under the expanding scope of the BRI, the potential as a motor for post-pandemic growth is immense. BRI investments have the potential to lift trade and growth two-fold by increasingly facilitating trade with China through infrastructure, as well as by making these BRI partner countries more lucrative places to invest by global investors. Therefore, Mr. Pomeroy concluded, it is both Chinese consumer demand and infrastructure investment that are likely to drive a fair share of global growth in the coming decade.

Next, Mr. GUO Zhiyao, Deputy General Manager of Bank of China Luxembourg Branch, addressed financial cooperation under the BRI in the post-pandemic era. He highlighted the importance to identify the new momentum of the BRI and recognize new opportunities for digital, green and sustainable development. Particularly with the ongoing pandemic in mind, these ‘new driving powers’ of digital, green and sustainable developments are finding their place in financial cooperation. Firstly, upgrading from ‘single product’ to ‘product portfolio’ investments help diversify investments in times of uncertainty. Secondly, upgrading from pure ‘business services’ to ‘platform services’ (such as information and matchmaking platforms) helps financial institutions to leverage their domestic and overseas client base in international financial cooperation. Finally, investment and financial systems are undergoing an upgrade to become more innovation-driven, multilateral and sustainable. Mr. Guo stressed the importance of Bank of China Luxembourg Branch as the headquarters of the BoC in Europe in these developments, as well as the bank’s continued support for the Belt & Road Initiative. The BoC is a lender in over 600 BRI projects with over $130bn in credit support and issues BRI-themed bonds.

In his short presentation on “BRI & International Debt Capital Markets”, Mr. Arnaud DELESTIENNE, Member of the Executive Committee of the Luxembourg Stock Exchange, addressed the opportunities of the Belt & Road Initiative for investors in the international debt security market. Although only about 7.5% of debt securities are issued in Asia, new issuances have reflected Asian growth year by year. This growth is mainly driven by China and its investments abroad. Mr. Delestienne addressed the question of how Luxembourg stands to profit from this development. As the largest fund center in Europe and a leader in bond issuance, as well as with its unique legal framework, Luxembourg has evolved as a global stronghold in the international debt security market. The Luxembourg Stock Exchange lists a number of BRI-linked bonds, such as the ICBC Climate Bond or the China Merchants Bank Sustainable Bond. Since its inauguration in 2016, the Luxembourg Green Exchange has become the undisputed global lending platform for green finance. Thus, Luxembourg stands to profit as a center for funding BRI projects, both traditional and sustainable.

As the final speaker of the webinar, Mr. WANG Yuanzhi, Co-Founder of Lingang Overseas Zeebrugge Park NV, introduced the Lingang Overseas Zeebrugge Industrial Park in Belgium, which has become an important component of the Belt & Road Initiative in Europe. Situated at a central position in Europe and serving as a logistics bridge head between the European mainland and Ireland, as well as a gateway between the EU and the UK, Zeebrugge profits from its strategic location. Zeebrugge Port has seen a number of BRI investments in recent years, with COSCO Shipping acquiring its deep-sea container terminal in 2017 and the China-Europe Railway Express pilot project running from Heilongjiang province to Belgium. In the future, Zeebrugge stands to capitalize on its position as a transhipment hub for Europe and the UK.


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