BRI Finance: Important Roles of the Capital Market

Introducing BRI finance into the capital market can meet BRI countries’ demand for sustainable funding over the long term, and the economic transformation in BRI countries may be expedited via the sharing of managerial experience, introduction of industrial resources, and optimization of resource usage. For Chinese funds, BRI countries boast various investment options which may enhance potential returns. For Chinese-funded financial intermediaries, the BRI projects can drive their globalization. For China’s capital market, the deepening of cooperation with exchanges in BRI countries may expand the capital markets. Moreover, experience in the development of BRI capital markets can be used as a reference for loan growth and resolution of debt defaults in BRI finance. BRI capital markets remain small in scale at the current stage. However, we expect them to prosper given the multitude of opportunities. China’s capital investment can cater to the needs of BRI countries that are developing their capital markets in ways such as increase in non-US dollar denominated financing, long-term funding support, and sharing of industrial experience and resources. Over the short to medium term, strengthening of policy support could reduce the current regulatory cost and enhance business capabilities. Over the medium to long term, we think BRI capital markets may grow swiftly over the next 5–10 years as the economic and trade cooperation between China and BRI countries deepens.