New'One Belt, One Road' investment to reach US$200b in three years
But initiative unlikely to soak up excess capacity at home, say analysts
Mainland China's outward investment in "One Belt, One Road" regions is tipped to surge in the next three years, but analysts do not expect it to solve the problem of excess capacity at home.
UBS expects mainland investment in "One Belt, One Road" initiatives to double in the next three years, hitting a total of US$200 billion.
"'One Belt, One Road' investment is not just about energy and transport infrastructure, we see increasing investments from real estate, technology and finance," UBS H-share strategist Lu Wenjie said on Tuesday. "These sectors accounted for 50 per cent of China's foreign investment in the first half of 2015."
Lu said more private enterprises were getting involved in "One Belt, One Road", citing telecommunications equipment giant Huawei and e-commerce leader Alibaba's investments in India this year.
Mainland outbound direct investment hit a record US$123 billion last year, up 14 per cent from 2013. It is expected to exceed US$150 billion this year.
UBS transportation and infrastructure analyst Robin Xu said railway projects in Laos, Thailand and Indonesia would make big progress in next three to six months. Xu estimated contracts to be signed would exceed US$20 billion, and that the China-Laos, China-Thailand and Jakarta-Bandung railways would be completed in three to five years.