EIR reported on Feb. 22 that “Real value in China’s economy, and also in its investments in countries along its Belt and Road Initiative, is shifting to infrastructure projects and rising rapidly, as detailed in a report just published by the PricewaterhouseCoopers accounting and audit firm (PwC).”
A closer study of that detailed PwC report reveals its more fundamental point, the “Atlas”-like character of the “win-win” Belt and Road Initiative since 2013, in effectively holding up the world’s economy after the financial crash of the trans-Atlantic banking systems.
Xinhua had reported Feb. 21, that PwC found that the economic value of announced infrastructure projects in which China is participating, surged by 47% in 2016 in 66 countries and regions that fall under the China-proposed Belt and Road Initiative (BRI). The BRI region had infrastructure projects underway and deals valued at $500 billion in 2016, only one-third of which total was in China.
In fact, that investment had made its biggest surge in 2013-14, rising from just under $300 billion to $400 billion in project investments, and kept rising from there. But with the impact of the 2007-08 crash, economic growth even in the 67 OBOR countries, primarily in Asia, had started falling in 2011 from an average 8% annually across the region, to just 4.5% average growth of the 67 OBOR countries in 2016. [Still much higher, of course, that America’s 1.5% and Europe’s 0.4% stagnation.
Only during 2016 did the economic slide reverse itself, and rise — and this, in China itself as well. In China, the average project size increased by 14% last year. Across the BRI region, the value of invested projects has been growing at a compound annual growth rate of 33% since 2013, PWC reported.
Even as world trade has stagnated in real terms, the great “economic connectivity” projects of OBOR, in utilities, transport, power, telecom, construction, etc., have been the ultimate “countercyclical investments.” They have lifted the whole OBOR region from joining the trans-Atlantic collapse.