Map of some of the currently planned parts of the Belt and Road Initiative (Image: World Bank)
China’s Belt and Road Initiative (BRI) – a huge network of overland corridors and maritime shipping lanes through 71 countries likened to a “21st century silk road” – is likely to boost world GDP by £7.1tn (£5.6bn) a year by 2040.
That’s according to a new study by global economic consultants Cebr, sponsored by the Chartered Institute of Building (CIOB) looking at the global economic impact of the BRI, which stretches from south east Asia to eastern Europe and Africa.
The study, out now in a report entitled From Silk Road to Silicon Road, How the Belt and Road Initiative Will Transform the Global Economy, looks at the economic impact on the global economy, on each of the ten regions of the world and on 25 leading economies.
The UK is forecast to be among the top 10 beneficiaries of the project, sitting seventh in the table of nations that will see the largest economic impact.
The BRI is regarded as the centrepiece of China’s international economic policy and is the world’s largest infrastructure project, attempting to rebuild and expand the old Silk Road between Europe and China.
Among the key points in the new report are:
- The BRI is likely to boost world GDP by 2040 by US$7.1 trillion per annum. This raises world GDP by 4.2% of likely GDP in 2040 (or 8.3% of GDP in 2019).
- The benefits of the BRI are likely to be widespread. As many as 56 different countries are forecast to have their annual GDP in 2040 boosted by more than $10bn (£7.9bn) as a result of the project.
- Other than China, which by 2040 will be the world’s largest economy by far and which will therefore benefit from any boost to the world economy, the biggest single potential beneficiary of the BRI is likely to be the USA, even though it isn’t participating directly in the project. This is because the sheer size of the US economy means that it gains from the indirect effects of world GDP being boosted. Even though the boost to US GDP is only 1.4% (much smaller than most other major economies) the absolute size of the US economy is still such that this is more than the absolute boost to any other economy except China.
- The next largest impact is in Russia, followed by Japan, Indonesia, Korea and the UK.
- GDP is likely to be boosted in western Europe by 5%.
Another key conclusion of the report is that as the BRI develops, it is likely to attract further countries; it is highly likely that western Europe, which has largely stayed aloof so far, will join in as the project develops momentum.
The study claimed it is even possible that it will result in significant investment, in the longer-term, in upgraded infrastructure for road and rail routes along the east coast of the UK. The BRI includes plans to reach Rotterdam, Europe’s largest port, and enhance links between north-western continental Europe, Scandinavia and the UK.
Chris Soffe, president of the CIOB, said: “This report is a fascinating look at plans to build what is effectively a road halfway round the world, with impact way beyond its boundaries. The Belt and Road initiative is the most significant global infrastructure initiative ever seen. Looking at the potential outcomes for the global economy and the opportunities for our industry – and the future of our industry – is something we should all be interested in.”
Cebr deputy chairman Douglas McWilliams said: “This is a transformative economic project that will reshape the world’s geography by linking places that were previously unconnected. It will give a huge boost to the world’s economy not only through creating new infrastructure but more importantly by boosting trade.”
The full report can be downloaded from the CIOB web site.
