Is this just the beginning of ‘belt and road’ disputes between China and its partners?
As Beijing’s ambitious initiative turns five the time is ripe for business disagreements to arise
Be prepared to see a lot more business disputes on projects linked to China’s “Belt and Road Initiative”, warns Sarah Grimmer, secretary general of Hong Kong International Arbitration Centre (HKIAC).
Five years after Beijing rolled out its ambitious plan to improve regional and transcontinental connectivity, the time is ripe for disputes to arise as contracts mature, she said.
“Typically, we see a deal struck one year and, between two and five years later, that’s when we see disputes, so that’s when we start to see the cases come out of these transactions,” Grimmer said.
“So I expect that we will start to see disputes arising from the belt and road strategy around now. Over the next five to 10 years, we will see a lot more, and then it will continue. I think we are just at the beginning of the dispute phase.”
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The ambitious plan proposed by Chinese President Xi Jinping covers more than 65 countries from Asia, Africa and Europe and accounts for 30 per cent of global gross domestic product and more than 60 per cent of the world’s population. Estimates of funding for these projects range from US$1 trillion to US$8 trillion.
So far infrastructure projects are the mainstay of the initiative but the grand vision includes trade, transport, and even cultural and people-to-people exchanges.
In the run up to its fifth anniversary this month, the initiative has faced various setbacks, from the withdrawal of contracts to reassessment of costs, sometimes due to changes of government in participating countries.