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China’s Belt and Road drives Southeast Asia port development

China’s Belt and Road drives Southeast Asia port development


Southeast Asia’s infrastructure is emerging as a major beneficiary of China’s Belt and Road initiative, with Chinese companies accounting for 17 per cent of infrastructure investment across the region over the course of 2015, according to Citibank.

In a note to investors, the bank said the favourable demographics, strong natural resource base and strategic location of the Association of Southeast Asian Nations (ASEAN) member countries mean they are attracting a high proportion of China’s overseas direct investment outflows, nearly one-third of which goes toward infrastructure development projects.

Citibank estimates ASEAN’s infrastructure needs to be in the order of US$100bn annually over the course of the coming 10 to 15 years, up to six times historical levels, with particularly high demand for the funding of transportation and power generation infrastructure. In the case of the former, improving port infrastructure and hinterland links is widely seen as central to reducing logistics costs and increasing the overall competitiveness of economies, such as Indonesia, the Philippines, Cambodia and Myanmar, where ports and hinterland links suffer from congestion, inefficiencies and poor productivity.