Chinese Companies Invest $60 Billion on Belt and Road Projects

(Beijing) — Chinese enterprises have invested over $60 billion in countries participating in the Belt and Road Initiative from 2013 to 2016, Ning Jizhe, director of the National Bureau of Statistics (NBS), said on Friday.

A large chunk of China’s direct outbound investment, estimated to be between $600 billion to $800 billion per annum over the next five years, will flow into these countries, said Ning, as Beijing prepares to host a major two-day conference with heads of state and ministers from partner countries starting on Sunday.

The Belt and Road Initiative, proposed by President Xi Jinping in 2013, is an ambitious program that aims to build infrastructure connecting China with energy-rich Central Asia, Europe and Africa.

It is also part of China’s attempts to export its excess steel, cement and output from other heavy industries that are grappling with overcapacity after years of expansion owing to a massive state stimulus.

Xin Guobin, deputy minister of the Ministry of Industry and Information Technology, said China will encourage firms in the petrochemical industry, steel, construction materials and telecommunication sectors to take the lead in international cooperation projects.

For example, state-owned Hebei Iron and Steel Group Co. Ltd (HBIS) has signed a deal that would give it a controlling stake in a venture with the Industrial Development Corp. of South Africa to build China’s biggest overseas steel mill outside the mainland. The plant will produce five million tons of steel per annum, said Xin.

HBIS group has trimmed 6.84 million tons of steel production capacity in recent years, according to the state-run Hebei Daily, and the group plans to cut output by another 3.4 million tons this year.

By end 2016, Chinese enterprises had built 56 industrial parks in countries that are part of the Belt and Road Initiative and more than 1,000 enterprises have already set up businesses in them, said Ning. He didn’t offer details on whether these entities were foreign companies or Chinese-owned ones, but said they have created more than 180,000 jobs and contributed US$1.1 billion in taxes to the countries’ governments, he said.

The Belt and Road Forum will be held from May 14-15 in Beijing with 29 heads of state and government leaders from participating countries in attendance, Foreign Ministry spokesman Geng Shuang said Thursday.

Contact reporter Pan Che (chepan@caixin.com)