BHP chief executive officer Andrew Mackenzie has lauded China’s Belt and Road Initiative (BRI), saying the initiative will help China “achieve greater cross-border cooperation” and revitalise an “ancient trade corridor”.
The Chinese policy, announced by Chinese President Xi Jinping in 2013, involves the creation of extensive road, rail and sea networks to promote intercontinental trade, infrastructure and cultural exchange, particularly in developing and emerging Central Asian economies. The initiative’s name references the historic Silk Road that ran from southeast Asia to southern Europe.
Mackenzie, speaking as a guest at the China Development Forum in Beijing, compared the BRI to Silk Road, which he called a “prototype for globalisation”.
“It was aimed, as I think Belt and Road is also about, to create a blend of best of what is west and best of what is east,” Mackenzie said.
He also cited BHP data that shows the BRI could generate up to 150 million tonnes of incremental growth in steel demand, equivalent to a 9 per cent increase in annual steel demand over a 10-year period, while copper could increase by 1.6 million tonnes.
“Our research indicates that about 30 per cent of the Belt and Road related investment will flow into new economic zones, industrial parks, manufacturing facilities and public buildings, all across economies that are emerging, in the wake, of China’s rise, and will provide a very important ladder of economic development to those economies,” Mackenzie said.
He also downplayed criticisms of the policy, which generally focus on China’s perceived trading dominance as a result of the initiative’s implementation.
Mackenzie expressed the belief that while BRI could fill an infrastructure funding deficit among Asia’s developing nations, participants should also have the right to evaluate the risks and benefits of participating in the BRI on their own terms.
“Inevitably a project of this scale, its complexity, its risk, is going to suffer the odd setback and criticism, but I have a sense that China, as the main architect of the Belt and Road along with many of the other participants are learning from this, as they translate it into reality,” Mackenzie added.
Cost estimates for the completion of the BRI vary, but the minimum figure is generally accepted to be around $US1 trillion ($1.41 trillion), with other estimates placing the figure somewhere between $US4–8 trillion.