Analysis of Sustainability of BRI Projects from an Industry Perspective

To achieve sustainable development of BRI projects, we think cooperating parties should complement each other at the industry level to bring mutual benefits and unlock the potential for win–win cooperation. In addition, an effective policy design is needed to allow BRI cooperation to improve people’s well-being and enable all stakeholders to benefit from this cooperation. International relations are the largest source of transaction costs in international economic and trade activities. Even if there is potential for win–win cooperation at the industry level, whether such potential can be transformed into sustainable cooperation depends on the extent to which relevant policies can improve international relations to reduce cross-border transaction costs. There are two core areas from the perspective of win–win cooperation at the industry level, namely “overland bridge countries”, i.e., countries in the zone stretching from Eastern Europe, Central Asia, and West Asia to North Africa, and “maritime bridge countries”, which include Southeast Asia countries. For (1) Primary goods: Traditional energy sources such as oil and natural gas are mainly concentrated in overland bridge countries. Industrial metals and new energy metals are geographically dispersed. (2) Infrastructure construction and heavy industries: maritime bridge countries, which has large population, urbanization rate of 30–60%, and good environmental carrying capacity, has significant growth potential and willingness to develop these industries. (3) Equipment manufacturing: Southeast Asia has strong demand for construction machinery, while West Asia, North Africa, and South America have large market potential for renewable energy equipment such as solar photovoltaics (PV) and wind power. (4) Technological innovation: BRI countries can help provide diversified market demand incentives. (5) Consumer goods: Southeast Asia may be the key target market in terms of trade cooperation in consumer industries such as textiles & apparel, home appliances, and automobiles, followed by South Asia and North Africa. We think opening up China’s tourism and consumer markets to Southeast Asia would enhance China’s attractiveness to Southeast Asian countries. The significance of policies for the sustainability of BRI projects can be understood from at least two perspectives: One is the building of a distribution mechanism that facilitates the sharing of the benefits of cooperation among different groups, and the other is the reduction of cross-border transaction costs. We think the biggest transnational transaction cost comes from international relations. Managing relations with host countries is the core issue in lowering transnational transaction costs. In the two core areas of industry-level cooperation (i.e., in overland bridge countries and maritime bridge countries), a more comprehensive approach is needed to reduce cross-border transaction costs. Chinese companies participating in BRI cooperation have both international transaction costs similar to those faced by companies in developed countries when they go global, and high intra-country transaction costs caused by the underdeveloped business environments of BRI countries. Therefore, China can provide stronger policy support to Chinese companies participating in BRI cooperation. In addition to policy-oriented financial support, China may also consider giving more support to chambers of commerce established by overseas Chinese enterprises. China could also provide employment training and guidance on laws, regulations, and labor arbitration so as to enhance the ability of Chinese enterprises to cope with risks.