Kroll Bond Rating Agency Release Research Report: “China’s Imperial Ambitions”

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has released a macro-market research report entitled, “China’s Imperial Ambitions.” The key points made in the report are:

  • A slowing economy and sharply increased debt have shaped policymakers’ commitment to finding new sources of growth through the $1 trillion “One Belt One Road” infrastructure initiative.
  • One Belt One Road will enhance China’s commercial, diplomatic, and geopolitical importance in the global economy.
  • New multilateral development banks—the Asian Infrastructure Investment Bank and the New Development Bank — play a important part in the One Belt One Road program. Their ownership structures are likely to enhance shareholder support and loan performance.
  • Ongoing but uneven capital account liberalization, and the yuan’s recent acceptance into the basket of currencies of the IMF’s SDR are steps in the direction of hopeful reserve currency status.

The report discusses the macro backdrop to China’s $1 trillion “One Belt One Road” initiative, and also what it sets to achieve. The One Belt One Road program is far-reaching, aimed at invigorating faster growth while strengthening China’s dominance in the global economy through commercial and diplomatic channels primarily across Asia and Europe, but beyond those borders as well. The program builds upon China’s recent infrastructure investments across frontier and emerging economies, especially in commodity-related ventures.

Two new multilateral development banks, the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), will be involved in the One Belt One Road program. AIIB’s largest shareholder is China, and NDB is the new BRICS bank owned by China, India, South Africa, Russia and Brazil.

Policymakers have begun slowly, albeit unevenly, to liberalize China’s capital market with an eye to both improving efficiencies and to positioning the yuan to join the elite rank of reserve currency status.

To view the report, please click here.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency
Joan Feldbaum-Vidra, 646-731-2362
Managing Director
jfeldbaumvidra@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Joan Feldbaum-Vidra, 646-731-2362
Managing Director
jfeldbaumvidra@kbra.com