The Only Way is Up for Indonesia in China's One Belt One Road Initiative
Jakarta. Indonesia stands to be the biggest beneficiary of China's One Belt One Road initiative in Southeast Asia which will pump around $87 billion into infrastructure projects, a report shows early this week.
The report, titled ASEAN Connections, was written by the Economist Corporate Network on behalf of law firm Baker & McKenzie. In it, 144 business leaders from large multinational companies were asked their views on trade initiatives and their impact on the Asean business environment.
The report found the companies were expecting an increase in trade and investment as a result of regional trade and investment deals.
Other than China’s One Belt One Road, major regional trade initiatives also include the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), which have been claimed to improve connectivity and overall business environment in the region.
“These mega-regional trade initiatives should drive growth in the region and Asean is certainly set to benefit from increased inter- and intra-regional trade and investments flows, as well as from the potential infrastructure investment that China will bring into the region,” said Eugene Lim, Asia Pacific Head of Baker & McKenzie’s Trade & Commerce division, on Monday (16/05).
Asean companies were more than happy to dive into these initiatives to be part of the global value chain, Lim said.
According to the report, 80 percent of the surveyed leaders thought One Belt One Road’s greatest impact could be the increase of Chinese influence throughout the region. 59 percent expect their involvement will lead to partnerships with Chinese companies and 50 percent believe the project will boost investment in Asean.
“One Belt One Road may still seem a distant goal for some, but the reality is that many businesses are already taking the initiative themselves so they can prepare for the opportunities and challenges that may arise,” said Bee Chun Boo, Partner at Baker & McKenzie Beijing in a statement.
More than two third of the companies have begun preparing for One Belt One Road by building up their human capital as well as looking for joint venture partners and potential acquisitions—intensifying competition between multinational companies in Asean, the report also showed.
From One Belt One Road, companies expect to reap benefits particularly for their infrastructure and construction projects, and also in manufacturing, e-commerce and logistics.
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