Belt and Road Initiative Presents “Enormous Opportunity”: Caterpillar
US Construction and mining equipment producer Caterpillar Inc is upbeat on business opportunities to be generated by China’s Belt and Road Initiative, saying it will “deliver another wave of prosperity” for China and the rest of the world. Building an infrastructure network, a priority of the initiative, will promote free flow and more effective allocation of resources, integration of markets, and coordination of economic policies among nations, according to a white paper released by the company.
Building infrastructure will help lower the cost of logistics, boost the competitiveness of emerging economies, and reduce inequality between regions, the white paper said. The initiative presents “an enormous opportunity” for the rest of the world, it said, noting that infrastructure plays a key role in facilitating trade and boosting productivity and growth. For example, in Asia, a 10-percent increase in paved roads and Internet facilities can drive up economic growth by 5 percent and 2 percent, respectively, while a 1 percent drop in electricity transmission and distribution losses can lift growth by 1.1 percent, according to research from the Asian Development Bank (ADB).
Between 2010 and 2020, countries in Asia will need to invest 8 trillion U.S. dollars in national infrastructure if they want to reach average global infrastructure levels, with an additional 300 billion dollars required for a regional infrastructure system, the ADB research showed. Caterpillar views the Belt and Road Initiative as “an open and inclusive” framework allowing all countries along the routes to participate in project construction. “It is not intended as and cannot be a solo effort of China,” said the white paper.
The company values the business opportunities offered by the initiative and hopes to participate more in projects along the routes, said Chen Qihua, vice president of Caterpillar Inc. and chairman of Caterpillar China.
Caterpillar has seen rapid growth in business related to the Belt and Road projects in Southeast Asia, the Middle East and Russia this year, he told reporters at a press briefing.
Proposed by China in 2013, the Belt and Road is envisioned as an infrastructure and trade network connecting Asia with Europe and Africa along ancient trade routes. Regions along the Belt and Road account for 63 percent of the global population and 29 percent of the global economy, statistics show.