CBBC: Belt and Road Update – June 2018

This article was published in June 2018, FOCUS Magazine by China-Britain Business Council. To get an access to the full online Focus magazine, download their App on Apple Store or Google Play.

A round-up of the latest Belt and Road news

Dam troubling

A dam, backed by China and planned for Cambodia’s Mekong River, would destroy fisheries and heavily impact Vietnam, worsening tensions with the neighbouring South East Asian country, according to a report released last month.

The report, which was commissioned by the Cambodian government and produced by a US based organisation said that the Sambor Dam would “generate large power benefits to Cambodia, but at the probable cost of the destruction of the Mekong fishery, and the certain enmity of Vietnam.”

The dam, designed by China Southern Power Grid, is part of the Belt and Road Initiative. Environmentalists have long been opposed to the dam, which would create a 239 square mile reservoir making it easily the largest along the Mekong. The project is likely to be deferred until more studies can be completed.

BRI is a win-win for Gulf

“The Belt and Road Initiative is ambitious and broad in its nature … but by interacting with each other we can unlock potential opportunities,” Bahrain’s minister for transportation and telecommunications, Kamal bin Ahmed Mohammed, said at the Gateway Gulf Investment Forum last month. The summit was very positive about the Gulf’s involvement in the BRI as China has become the world’s largest importer of oil and the second largest importer of liquefied natural gas.

“The infrastructure already exists, we already have the routes and the (trade) corridor available, a politically stable region, a resilient financial sector, and there are a lot of areas in which both regions, China and the Gulf Cooperation Council, can benefit from each other,” said the minister.

EU cold towards Belt and Road

All but one EU ambassador to China signed a recent report criticizing China’s BRI. The report said that the BRI “runs counter to the EU agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies.” It said that with 89 percent of the BRI projects being carried out by Chinese companies, China has been too reluctant to welcome foreign investment. Ambassadors emphasised that they are not refusing to cooperate with the BRI but said that it is key that the EU’s terms should be “politely yet firmly” stated. The Hungarian Ambassador was the only nation’s representative that did not sign the report.

Egypt and Kuwait Plan Belt and Road Initiatives

The Afro-Asian Economic Council (AAEC) has launched a project to link Egypt, Kuwait and other North African countries to the BRI. According to Tareq bin Eid Al Obeid, head of the AAEC, the project will attract investments to Egypt and other North African countries and will also increase international shipping traffic through the Suez Canal.

The AAEC plans include rebuilding Madinat Al-Hareer (Silk City) in Kuwait. Kuwait has allocated $450 billion to the project and also aims to turn the country into a trade and financial hub. In June 2014, the Kuwaiti government signed a cooperation agreement with China for developing Silk City and Boubyan Island as an economic belt. The Jaber Causeway (a bridge that links Kuwait City to Silk City) is currently under construction.

New Malaysian leadership could cause upset

A surprise win by Malaysia’s opposite last month may well lead to a series of renegotiations with China over various BRI projects as new Prime Minister Mahathir Mohamed does not have the close ties his predecessor Najib Razak had with China. Mahathir has said he has no problem with China’s BRI but added, “we would not like to see too many warships in this area, because [a] warship attracts other warships.”

More trains arrive in Europe

In further landmark overland connections, the first freight train destined for Antwerp arrived in Belgium last month. Having left the Chinese port of Tangshan on 26 April, it arrived in Antwerp on 12 May, making it the first direct train between China and Belgium. The train travelled via the border crossing of Alashankou, Kazakhstan, Belarus, Poland and Germany and took less than half the time a containership would have taken.

Elsewhere, volumes of trade along the new routes from China to Europe have risen by 30 percent in the first three months of 2018. This was made up mostly of westbound freight coming from China. There has been a decline of 43 percent year on year of eastbound traffic. 

Macron on tour

French President Emmanuel Macron said in New Zealand that he wants balance against China in the Pacific in view of China’s growing influence of the region. He also called for the creation of a new strategic alliance among France, India and Australia in response to China’s growing assertiveness in the region. Macron’s growing influence in Europe has seen him become an unofficial spokesperson for the EU. Although Australian miners are hoping to benefit from selling coal to China for high-quality steel production, they are wary of China’s growing power.  Indian Prime Minister Narendra Modi meanwhile, met with Xi Jinping in China last month. Relations between the two nuclear powers are still tense and India, which is not supportive of the BRI, has still not signed up to the initiative. All this makes good reading for Macron’s new trade bloc plan.


Chinese Consul General in Los Angeles, Zhang Ping said that California could be the first region of America to be involved with China’s BRI. “California maintains a close economic and trade tie and people-to-people exchange with China,” Zhang said. “Cooperation under the framework of the Belt and Road Initiative may start with California.” The Golden State is a pioneer in green-energy and a leader in fighting climate change – something China is keen to emulate. However, the US’s involvement in the BRI might depend more on Trump and Xi’s relationship than any economic benefits.

BRI boosts China’s culture industry

More than 40 key projects in the fields of the creative cultural industry were presented at the Beijing-based Central Academy of Cultural Administration as China’s Ministry of Culture and Tourism look to further develop plans for the Belt and Road Initiative. Projects from teams promoting animation, acrobatics, tea culture and wood painting were all presented.

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