Executive Intelligence Review


‘Sun Never Sets’ on the Belt and Road; BRI Bond Issuance Begins

Jan. 29, 2018 (EIRNS)—An analysis in Bloomberg News yesterday, which is unable to decide whether it is serious or sour grapes about China’s Belt and Road Initiative (BRI), frames President Trump’s State of the Union Tuesday night in an interesting manner. “As the U.S. President drafts a $1 trillion overhaul to fix America’s aging roads and bridges,” Bloomberg writes, Chinese President Xi Jinping’s “infrastructure-building endeavor is pushing into the U.S.’s backyard.” The piece is headlined, “China’s Infrastructure Push Reaches Arctic, Leaving Out U.S.”

The opening is somewhat inaccurate but its intention is quite clear. With the addition of the Arctic and Latin America last week,

“With the addition of the Arctic and Latin America last week, Chinese President Xi Jinping’s signature Belt and Road Initiative has become truly global. Only the U.S., its neighbor Canada and ally Japan have yet to be included in the plan, which seeks to build or upgrade a network of highways, railways, ports and pipelines.”

Later, it acknowledges that Xi “has invited the United States to join the Belt and Road Initiative”; that “Japanese Prime Minister Shinzo Abe has expressed an interest in participating”; and that Canada has joined China-initiated multilateral Asian Infrastructure Investment Bank.

The article ends with a brief chronology of how the Belt and Road grew to represent a global paradigm, from its first announcement in late 2013 by Xi Jinping. CNBC, meanwhile, reported that issuance of official “Belt and Road Bonds” has begun in China, with the issue of a roughly 300 million yuan ($47 million) bond for three years on the Shanghai Stock Exchange by a cement company, to buy equipment for a Belt and Road project in Laos. Though other companies had raised private investor funds in Chinese markets for projects, this bond was “officially” linked to the BRI in that it was the first one approved by China’s Securities Regulatory Commission as a BRI bond.

The purpose is an important one: To allow Chinese investors to invest abroad through BRI projects, rather than through speculative investments, and earn (in this case) a return over 6% on a government-regulated bond.