Opportunities and combinations of chinese "Belt and Road" initiative for national economies of Southeast Asia

A. A. Maslov ()

Russian Journal of Industrial Economics, 2020, vol. 13, issue 4

Abstract: Initially, the Belt and Road initiative was greeted with enthusiasm in Southeast Asia, as it made possible to support projects and bring the products from Southeast Asia to international markets. However, the overwhelming number of projects in Indonesia, Malaysia, Laos, Philippines, and Thailand are experiencing significant difficulties,and none of them has been completed. China’s main volumes of investments and loans are allocated exclusively for infrastructure projects, while serious funds are not allocated for innovative industrial facilities or IT structures. Railroads and logistics facilities will be used to export Chinese goods to these countries, import raw materials to China, or deliver local industry products. The economic feasibility and quality of investments in projects in Indonesia and Malaysia are in great doubt. Laos and Myanmar are taking loans from China to develop the railway network without developing their own industry, so these regions can only be traders of Chinese goods. These countries cannot recoup the projects at all, many of them turn out to be unfinished, and therefore the debt to China is growing. The mega-project of the South China-Southeast Asia corridor was not economically sustainable. Its economic feasibility for the participating countries (except for China itself) raises many questions.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ach:journl:y:2020:id:883

DOI: 10.17073/2072-1633-2020-4-482-493

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