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Is OBOR more than a buzzword?

China’s epic infrastructure project, ‘one belt one road’, is getting its own index, according to the Hong Kong Stock Exchange. But OBOR does not excite fund managers.
by Fund Selector Asia
Schroders

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The estimated $5trn investment amount is significant, but smaller than China’s annual domestic fixed asset investments, which stood at nearly RMB 60trn ($8.8trn) in 2016, said Schroders head of China A-share research Jack Lee.

China’s State Council earlier estimated belt-and-road investments can top $8trn if fully implemented. Committed investments stand at $1.3trn.

“It’s a thematic investment, and it’s not that simple,” he said.

“We did see some smaller scale [mainland manufacturers] which are growing sales orders. And some sectors, such as railway equipment makers, have matured in technology and can win some businesses overseas.

“But we don’t consider the [one belt one road] theme will fundamentally change domestic companies. The new businesses [driven by one-belt-one-road projects] might offset the slowdown domestically, or induce small growth. China is just too big.”

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