A KPMG guide on the opportunities, challenges, and the firm’s strengths along the Belt and Road
Since its launch in 2013, China’s Belt and Road Initiative (BRI) continues to present significant opportunities to promote economic cooperation and connectivity between countries, companies and people across the globe. As an international finance centre, a global super-connector of trade and investment, and a leading city within the Greater Bay Area, Hong Kong is set to play a prominent role in supporting the delivery of the BRI.
This publication provides an overview of the BRI’s opportunities and challenges, and serves as a guide to how businesses can partner with KPMG in Hong Kong to capitalise on these opportunities and drive profitable growth along the Belt and Road.
Infrastructure development: Infrastructure investment, financing and construction are major areas of initial focus for countries and companies seeking to participate in the BRI.
Real estate opportunities:The BRI will create significant opportunities for development, investment, operations and service provision across the traditional real estate sectors.
Capital markets growth: Hong Kong remains a leading market for listing and trading securities, with a deep capital pool comprising both institutional and retail investors. As an international finance centre, the city continues to act as a key connector to global capital markets, which is expected to play an increasingly pivotal role in the development of the BRI.
M&A, investment and valuation: In addition to greenfield projects, the BRI is expected to offer significant M&A investment and financing opportunities for Chinese and international players. These include SOE privatisation programmes, joint venture (JV) investment opportunities and the acquisition of assets already in Belt and Road countries.
The tax roadmap: Enterprises participating in the BRI have to plan ahead and properly manage their investment and tax risks to mitigate potential exposures for both enterprises and their employees.
Financial services: The level of sophistication and reliability of local financial markets, systems and regulatory frameworks vary from country to country along the Belt and Road. The financing of BRI projects is key, and there is a need for a hub to consolidate financing needs and investor activity. As an international finance centre and global super-connector of trade and investment, Hong Kong holds a significant advantage.
Digital Belt and Road: The ability to capitalise on state-of-the-art innovation and technology initiatives presents a leapfrog opportunity for many emerging BRI economies and companies.
Opening new consumer markets: The BRI is expected to create significant economic and social development opportunities for the countries along the Belt and Road, which will generate growth opportunities for new and existing brands, retailers and manufacturers in the region.
The people opportunity: In order to achieve long-term BRI success, it will be important for companies to put the right people and organisational structures in place.