The Impact of China’s ‘One Belt, One Road’ Initiative on Chinese Overseas Property Investment
The Silk Road Economic Belt and the 21st-century Maritime Silk Road or The ‘Belt and Road Initiative’ (BRI) is a trillion dollar infrastructure development strategy proposed by the Chinese government focusing on connectivity and cooperation between Europe, Asia and Africa.
The Chinese government plans to build a network of new trade routes through various infrastructure projects with the intent to “bind more than 65 countries and two thirds of the world’s population to its economy.” (1)
The initiative will involve developing rail networks, ports and free trade zones across the globe through the land-based ‘Silk Road Economic Belt’ and the ocean-going ‘Maritime Silk Road’.
China’s objective is to increase trade by approximately $2.5 trillion within one decade by penetrating world markets with Chinese goods. China will to invest approximately $150 billion each year into these infrastructure projects. (2)
The Chinese government describes the initiative as “a bid to enhance regional connectivity and embrace a brighter future” (3) while critics call it a push from China to take a larger role in global affairs with a China-centric trading network.
Close neighbour countries to China such as Thailand, Malaysia and Vietnam will benefit from the One Belt, One Road initiative due to their geographical location. In addition to infrastructure investment, Chinese individual investors with a strong interest in overseas property have built on their property investment portfolios in Thailand, thus pushing up house pricing by 13% in past twelve months, closely followed by Malaysia with a 10% annual house price rise and a 7-8% increase in Vietnam.
Indonesia, Cambodia and more SEA countries are also seeing house prices increase as Chinese property investors spot the value of investing in these currently low-priced local markets.
Australia is not currently part of the trillion-dollar ‘One Belt, One Road’ initiative, but individual investment projects in Australia are still allowed to sign up and be part of it.
The proposed Australian Legend World at Nerang, Gold Coast, to be developed by Chinese theme park giant Songcheng at a cost of more than $400 million will be the company’s first overseas theme park.
The plans for the park also include housing for up to 2,000 residents and a high-rise development — it will also feature one of the world’s largest indoor ski fields.
China’s Ministry of Culture has listed this Gold Coast theme park as a “key cultural trade and investment project”(4) among 11 other cultural projects globally that are linked to the country’s ambitious Belt and Road investment plan.
Gold Coast Mayor Tom Tate welcomed China’s decision to list the project: “I look forward to seeing this theme park development progress as it will bring significant financial and social benefits for our city.” (5)
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- “China wants ‘new Silk Road’ One Belt One Road project to help it dominate world trade”, Matthew Carney, ABC News, May 2017
- “The $900bn question: What is the Belt and Road initiative?”, Tom Phillips, The Guardian, May 2017
- “China unveils action plan on Belt and Road Initiative”, China Daily, Mar 2017
- “One Belt One Road: China lists $400m Gold Coast theme park as ‘key project’ of global initiative”, Michael Walsh, Mar 2018
- “Gold Coast Theme Park Gets Green Light”, Travel Weekly, Mar 2018