China’s Belt and Road drives Southeast Asia port development

Southeast Asia’s infrastructure is emerging as a major beneficiary of China’s Belt and Road initiative with Chinese companies accounting for 17 percent of infrastructure investment across the region over the course of 2015, according to Citibank.

Citi estimates ASEAN’s infrastructure needs to be in the order of $100 billion annually over the course of the coming 10 to 15 years, up to six times historical levels, with particularly high demand for the funding of transportation and power generation infrastructure.

Major Chinese-invested port projects in Southeast Asia include
• the expansion of Kuantan Port and phase one development of Samalaju Port, both in Malaysia, by Guanxi Beibu International Port Group and China Harbour Engineering Company;
• the development of Tanjung Sauh Port on Batam Island in Indonesia by China CAMC Engineering Company, and
• the construction of a deep-sea port on Madae Island, Rakhine State, Myanmar, by China National Petroleum Corporation.

According to Citibank, Chinese policymakers have four main objectives with Belt and Road.
• As a facilitator of Europe-Asia connectivity, one of these is to expand international markets for Chinese goods.
• A second is to secure raw materials for China, which the bank says is becoming a more pressing issue owing to vertical integration of regional supply chains within China.
• to provide outlets for excess capacity in China’s restructuring economy.
• to promote the internationalization of the Renminbi as an invoicing currency for international trade.