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China’s Massive One Belt One Road Project: 4 Key Insights from Oversea-Chinese Banking Corporation Limited

You can’t say that China is short on ambition.

China’s One Belt One Road (OBOR) project is a massive infrastructure program that will stretch into 60 countries in Africa, Asia and Europe. It will cover 60% of the world’s population and represent one-third of the world’s gross domestic product.

Banks in Singapore, like Oversea-Chinese Banking Corporation Limited (SGX: O39), could stand to benefit from the programme. Here’re four key things to know:

1. The One Belt, One Road concept – click here

2. Beyond infrastructure – click here

3. Absorbing opportunities  

OCBC chief Samuel Tsien added that the current bank structure is sufficient to absorb the opportunities that flow from OBOR:

“In the future, I expect One Belt, One Road to move beyond infrastructure, beyond project financing into certain other capital investments and we will be involved in that as well.

We believe that it is not necessary to set up a One Belt, One Road office because if you look at the ingredients of the banking opportunities of the One Belt, One Road, those can actually be absorbed into the current structure, and the expertise in the current structure is probably better equipped to service those requirements going forward.

So it’s a very positive development”

Structurally, Tsien believes that it will be able to absorb any opportunities that flow to the bank. But strategically, OCBC has a few areas of focus.

4. A focused effort

To be sure, OCBC will not be able to manage to vie for all the opportunities that flow from OBOR. Tsien was candid on OCBC’s geographical limitations. He noted:

“We have been able to capture opportunities along the way already. But we cannot follow the 64 countries that One Belt, One Road covers because we are only in 18.”

However, OCBC is focused on five countries for OBOR. Tsien added:

“But within the 18, we are really focusing on resource-rich countries, which is Malaysia, Indonesia, Myanmar and Thailand and Vietnam.”

OBOR involves a significant number of countries, so there is likely to be political and economic challenges to overcome when it is implemented. It is too early to say how much Singapore companies can benefit from it. But to be sure, there could be plenty of projects to go around.      

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.