China's One-Belt-One-Road initiative and political risks


While OBOR requires a very large and sustained investment effort, there are many uncertainties and risks, not least in the political sphere, related to investing in developing countries in Asia and Africa. Infrastructure investment is at the heart of OBOR, but because of the high costs and often low returns, this kind of investment in many instances becomes profitable only after a longer period of time.

During this time the host country must be politically stable, or else profitability is likely to suffer. Because of the huge size of OBOR, it can only succeed if a very large number of investors - both from China and internationally - consider the relevant projects commercially viable and the risks acceptable. Assuming that European-style colonization of Africa and Asia is not an option for China's leaders, how do they intend to manage the balance between political risks to and commercial returns of infrastructure projects in developing countries?

Chapter in Shao Binhong ed., 'Looking for a Road: China debates its and the world's future', Leiden/Boston 2017. Click on the image below to go to the chapter.