The second Belt and Road Forum for International Cooperation (BRF), which came to a close recently, saw participating countries reaching a consensus to push for the realisation of what has been touted the ‘project of the century’ – an outcome that is essential for Beijing as the forum was considered a means to convince the international community of its intentions as well as the success of the Belt and Road Initiative (BRI).

But what has changed since the introduction of the initiative back in October 2013?

Sherry Madera, Refinitiv’s Global Head of Industry and Government Affairs, weighs in on the investment opportunities that come with the Belt and Road Initiative, the subsequent revival of some large Belt and Road (BR)-linked infrastructure projects, as well as the importance of greater transparency, governance and sustainability in the award and implementation of these BR projects.

Smart Investor (SI): After a year of uncertainty, will the announcement by Prime Minister Tun Mahathir Mohamad that Malaysia fully supports China’s Belt and Road Initiative (BRI) lead to enlarged trade and investment opportunities with China and countries along the BR corridor?

Sherry Madera (SM): Malaysia’s support opens up opportunities for both countries to find new ways to invest and collaborate in important infrastructure projects. Our data shows that there has been a shift in global investment to BRI participant markets. Since 2013, investment from China, US and EU into BRI countries has increased considerably in terms of both the value and the number of deals. Excluding China, global investment into BRI regions in 2018 increased 33% compared to 2013. It can be expected that as a BRI signatory some investment flows will shift to Malaysia.

Investment into BRI countries from China’s private sectors has increased at a fast pace as well. Private sector investment into BRI countries in 2018 increased almost 5 times compared to 2013.

From a trade perspective, when two countries can work together to lower barriers that creates positive conditions to facilitating greater trade. China and Malaysia already have a strong trading relationship.

China has been Malaysia’s biggest trade partner for the past 10 years while Malaysia is one of China’s top 10 trade partners. Bilateral trade grew to US$108.62 bil (RM448.8 bil) in 2018, an increase of 13% form 2017. Malaysia’s support of the BRI should further help to encourage efforts between the countries to further develop their trade relationship while also opening up potential opportunities for Malaysian companies to enter broader international supply chains along the BRI.

SI: Are there any positives arising from the suspension and subsequent revival of some large BR infrastructure projects in Malaysia involving China parties over the past year?

SM: The BRI is an extremely long term project with a horizon of decades rather than years. The public and private sector relationships involved in its implementation will certainly evolve over time. It’s important that governments and the citizens they represent feel that these projects are in their best interest.

Malaysia’s decision to review the projects was meant to ensure that they were comfortable with the terms moving forward through the full implementation of the projects. As both countries have reached an agreement I think it is positive that they were able to resolve this through dialogue to ensure that those important investments continue.

In the future both parties will have a better understanding of each other’s expectations. I think that is a positive development as well as it can lead to future projects that have stronger public support and a clearer framework for success.

SI: Issues such as the lack of transparency and good governance are often highlighted by critics when it comes to the BRI. How important is the need for greater transparency, governance and sustainability in the award and implementation of BR projects?

SM: Transparency, good governance and sustainability are critically important for large infrastructure projects as the period that these structures will be built and in use will stretch decades. This is an area where Refinitiv plays an important role by providing essential data for investors to evaluate these projects and by screening counterparties along the supply chain for financial crime risk.

As global financial firms look for opportunities that meet their risk-reward profile along the BRI they need to satisfy their own internal governance standards, including compliance with any of the myriad global regulations they operate under, including anti-money laundering and Know Your Customer.

A major challenge is the highly dynamic nature of BRI projects and the geopolitical environment they are intrinsically tied to. The BRI covers a range of regions with distinct ethnic, political, religious, and economic characteristics, as well as some that are challenged by conflict.  As risks evolve firms need to track them; so fast, accurate and trusted news is vital to understand emerging risks.

A challenge facing global investors looking to invest in BRI projects has been a lack of data in particular areas: project information, supply chain visibility and information to help firms with risk analysis. Helping to mitigate these issues will be essential to encouraging private capital to invest in these projects as well. This shift of private funds as well as public ones will be integral to whether the BRI is seen as a success in the future.

Green Finance has continued to increase in importance for the BRI and was a key issue at the recently held BRI Forum in Beijing. An example of this heightened importance can be found in the City of London Corporation‘s Green Finance Initiative (GFI) which has partnered with China’s Green Finance Committee (GFC) to create green investment principles for the BRI.

Building on existing responsible finance initiatives, the Green Investment Principles aim to incorporate low-carbon and sustainable development into projects in Belt and Road countries. These countries represent approximately 40% of the earth’s total land area and 55% of total CO2 emissions. As of April 2019 28 firms had signed up to the principles. Green finance is a critical part of the success of the BRI.

SI: How can Malaysia and other BRI participants avoid the risk of unsustainable debt arising from BR projects?

SM: At the recent Belt and Road Forum Senior Chinese officials acknowledged that some countries were anxious about their debt levels for BRI projects. They reiterated their commitment to ensuring greater transparency and highlighting the importance of global standards must be championed.

Transparency is important as BRI participants need to ensure that they have appropriate data to effectively weigh the long term costs and benefits of these projects. With more information available participants can ensure they are able to make decisions that limits the risk of being burdened by unsustainable debt.

China is also expected to take action directly on this issue. At the recent BRI forum, Finance Minister Liu Kun said China would release a framework to “prevent debt risks”. The “debt sustainability analysis framework” encourages Chinese financial institutions and BRI countries to voluntarily improve debt management levels. This may also prove to be a beneficial tool to prevent unsustainable debt related to the BRI.


Sherry Madera is the Global Head of Industry and Government Affairs at Refinitiv and was recently appointed to enhance the company’s engagement across government, policy initiatives, industry trends and regulatory developments.

This engagement will support Refinitiv’s role as an essential part of global financial markets and offer customers further opportunity to drive efficiency, transparency and collaboration across the public and private sector.

Madera joins Refinitiv from the City of London Corporation, where she was economic ambassador to Asia. She brings over 20 years’ experience across both public and private sector including corporate finance, banking, asset management and entrepreneurial ventures and, more recently, global policy leadership and advocacy in financial and professional services. Prior to her role at the City of London Corporation, Madera was Minister-Counsellor for the UK’s Department for International Trade based in Beijing.