Belt & Road Info: Assessment Index and Report on Political Risks of Energy Investment in the Belt and Road 2017 Released
10 Feb 2017

Recently, the Assessment Index and Report on Political Risks of Energy Investment in the Belt and Road 2017 was released in Beijing. At the regional level, South Asia, Western Asia and North Africa are high-risk areas for investment while Central and Eastern Europe and CIS countries are seeing obvious accumulation of the investment risks. Viewed holistically, however, Central and Eastern Europe still has low investment risks and Central Asia has remained steady.


The Report looks at the three reasons that caused the above-mentioned changes: firstly, the significant devaluation of Euro led to a shift in exchange rates in Central and Eastern European countries; secondly, the economic sanctions imposed on Russia after the crisis in Ukraine caused implications of many dimensions; thirdly, the falling oil price undermined resource-oriented economies.


According to the Report, co-investment in energy strengthens the energy security, reduces poverty, improves livelihood, and lays the groundwork for the cooperation between China and the countries along the route.


The Report was completed by the research team led by Mr. Xu Qinhua, Director of the Center for International Energy and Environment Strategy Studies (CIEESS) of the National Academy of Development and Strategy of Renmin University of China (RUC). With reference to 11 large global databases, the Report integrated six dimensions, including economic foundation, social risk, political risk, China factor, energy factor and environmental risk, and 37 sub-indexes. It aims to comprehensively quantify and assess the risk level for Chinese enterprises to invest in the 64 countries along the Belt and Road and major causes of changes in political risk of energy and resources investment in these countries.


Mr. Xu Qinhua reminds that investment always comes along with risks. The amount of energy investment is relatively large, and political risk, among all, is the most unquantifiable and uncontrollable one which should be prevented in advance. Countries and regions with high environmental risk of energy and resources investment experience great pressure from the global responsibility of climate change. In case the legislations and regulations of these areas are not clear and well-established, they expose to greater risk of sudden change in law or being highly politicized. Energy and resources investment is therefore prone to greater uncertainty.


Source: China Council for the Promotion of International Trade


Translated by: Ms. Kelly Peng, Ms. Jenny Lam


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