China's Belt and Road Initiative to benefit Southeast Asian countries

"I was in Sri Lanka four years ago as a tourist and getting from the hotel to airport took one and a half hours because the road conditions were so bad," said Leo Hu, a Singapore-based economist working for an asset management company.

"But when I visited Sri Lanka again recently as an investor, a highway had been built under China's Belt and Road Initiative and the same journey took me less than 45 minutes," he said.

Hu is the senior portfolio manager for Emerging Markets Debt (EMD) Hard Currency Strategies of NN Investment Partners. He is responsible for Asian hard currency sovereign and quasi-sovereign debt strategies for NN Investment Partners' pan-Asian and global emerging market hard currency portfolios.

According to the economist, China's Belt and Road Initiative has two unique features that have major benefits for the relevant countries, which are project execution expertise and cheap funding.

With regard to execution expertise, China's urbanization process has resulted in a vast amount of experience in large infrastructure projects.

This expertise will help those countries along the Belt and Road routes quickly fix their infrastructure bottlenecks and bolster their efficiency and productivity.

In terms of cheap funding, the loans for the projects within the framework of the Belt and Road Initiative are normally at concession rates, which tend to be much lower than the commercial borrowing rates.

"The cheap funding cost will reduce the fiscal burden of the receiving countries, which will allow them to use their limited resources on other much-needed areas such as education and social welfare," Hu said.

Edward Lee, who leads the ASEAN (the Association of the Southeast Asian Nations) economic research team of the Standard Chartered Bank, told Xinhua earlier this year that China tops the world when it comes to infrastructure construction, especially transportation infrastructure, therefore China can provide great support to some smaller and emerging ASEAN countries that have technology and financing shortfalls.

He said the infrastructural projects related to the Belt and Road Initiative can create huge job and procurement opportunities for Southeast Asian countries and benefit small and medium-sized enterprises in the region.

In the long run, the initiative will help regional countries to own complete and comprehensive infrastructure, which will continue to cast long-term and positive influences on their transportation costs, open trade, and economic cooperation, Lee said.

Tan Khee Giap, co-director of the Asia Competitiveness Institute (ACI) and associate professor at the Lee Kuan Yew School of Public Policy, National University of Singapore, also voiced his enthusiasm for the benefits to be brought by the Belt and Road Initiative to Southeast Asia and even the whole world.

"Without any thresholds, the Belt and Road Initiative is open to any country," he said, adding it can deepen regional trade cooperation in a very flexible way and be a shot in the aim of the global economic recovery.

He went on to say that with supports of the Belt and Road Initiative, the financing bottleneck for infrastructure in Southeast Asia will be removed, which will spur regional infrastructural construction, raise industrial productivity, create new job opportunities, and improve people's livelihood.

Meanwhile, the governments will see healthier balance sheets as the Belt and Road Initiative brings more regional trade activities, so that they can expand investment in public services.

Tan disagrees with the view that the Belt and Road Initiative will disturb the negotiations on regional free trade agreements. He said the two things are not mutually exclusive at all, and countries can always choose to have both, and to a certain degree they are complementary to each other.

On concern over the financing bottleneck of infrastructure projects related to the Belt and Road Initiative, he suggested that Singapore can build a financing hub for investment in infrastructure development so as to accelerate the realization of the Belt and Road Initiative.

He also said that Singapore has abundant experiences in aviation hub and airport construction, and it is willing to have closer cooperation with China in promoting unimpeded trade and personnel exchanges through air transport for the Belt and Road Initiative.