Six years into China's flagship Belt and Road Initiative (BRI), a much greater focus on risk management and geopolitical sensitivities means BRI is now becoming a more open and tangible opportunity for global organisations to consider.

That is one of the conclusions of a new report on the evolution of the Belt and Road Initiative by the Economist Corporate Network, supported by Baker McKenzie.

Through multiple in-depth interviews with BRI participants, including those from the Asian Infrastructure Investment Bank, ABB, InfraCo and many others, as well as detailed project analysis, this research was developed to provide a detailed picture of how the Belt and Road Initiative will likely be defined over the next new decade.

Indeed, despite the higher risks of doing business in many Belt and Road countries, with elevated project and risk management and multilateral engagement, the report suggests the 2020s will offer a whole new raft of opportunities for multinational companies to align and grow along with the BRI.

While the BRI has faced some well publicised challenges in recent years, not least of which due to the hugely altered geopolitical landscape, major BRI summits in Beijing in April and Hong Kong in September have effectively sought to "reboot" the BRI for the new decade, with a more inclusive, transparent and sustainable approach to projects.

One way the BRI is being rebooted is through adopting formal lending rules similar to those of the multilateral development banks (MDBs), while China has agreed to work much more closely with these development banks on BRI projects more generally.

Another form of refresh is in the launch of the so-called Digital Silk Road, which aims to link up internet infrastructure and cloud computing and to jointly develop common technology standards among the BRI countries.

A third way BRI is being re-engineered for the new decade is through a renewed focus on sustainability. While the report found that this area was still in its relative infancy, the concept of "greening" the Belt and Road is one that is becoming increasingly common in discussions about new BRI projects, according to market participants.

Ai Ai Wong, Asia Pacific Chair, Baker McKenzie, said: "Anyone who thinks the Belt and Road Initiative is a passing trend is very much mistaken. Those driving the BRI have proven quick learners, and pragmatic about what it will take to ensure the long term success of the Initiative. This report underscores the multiple ways the BRI has evolved to meet the needs of a more demanding stakeholder group, while staying true to its development and connectivity goals."

"For those multinationals that may possibly have thought that the BRI wasn't for their organisation, I would say look again," she added. "With new market participants, funding models and countries becoming part of the Initiative, we see new opportunities for work and partnership emerging every week."

Of course BRI projects are not without risk. The report also provide a checklist of six key considerations to ensure project risk is well managed:

BRI Risk Management Checklist

  1. Establish a strong business case for the project, including an assessment of the commercial viability of the project but also its impact on environmental, social and governance factors
  2. Understand the project’s full risk profile over its life cycle, and find ways to manage these risks down in a systematic way
  3. Develop strong partnerships with local companies, local governments and regulators
  4. Build strong capabilities in legal and regulatory expertise in those markets
  5. Devise performance metrics and milestones for the project, and track the progress of these indicators in a disciplined way
  6. Plan for alternate scenarios and formulate exit-mechanisms in case this becomes necessary
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