At present, China’s BRI finance is mainly dominated by state-owned banks, and bank loans constitute the largest portion of funds that flow to BRI countries. Given the significance of BRI finance, we think it is reasonable and necessary for policy banks and the big four state-owned banks to take the lead in the initial stage. However, there have been concerns as to whether the status quo (i.e., investment projects concentrated on a few industries and geographical regions) can meet the needs of BRI countries over the long term, and whether the introduction of more financial instruments is practical and necessary.

In recent years, the capital market has made initial contributions to the economic linkage and development of BRI countries, such as China’s issuance of BRI bonds, BRI countries’ issuance of panda bonds (RMB-denominated bonds issued by non-Chinese issuers in the Chinese mainland) and dim sum bonds (RMB-denominated bonds issued in Hong Kong SAR), Chinese-funded private equity (PE) companies’ establishment of special BRI funds or investment in firms from BRI countries, and Chinese-funded securities brokers’ assistance with the listing of firms from BRI countries on HK- and US-share markets.

This chapter is organized as follows. Section 1 focuses on the feasibility and necessity of introducing capital markets into BRI finance from the perspectives of economic development in BRI countries and benefits for Chinese funds and financial institutions. Section 2 elaborates on the current capital markets in BRI countries, and the status quo, structure, and characteristics of capital market tools in BRI finance. Section 3 analyzes the opportunities in BRI capital markets. Section 4 offers a glimpse of the development of BRI capital markets in the future.

5.1 Importance and Role of Capital Markets in BRI Finance

Policy-based financial institutions and state-owned banks are major sources of funding for BRI finance. The funds, raised mostly via bank loans, are mainly invested in resources, energy, and infrastructure projects in developing countries in Asia, Africa, and Latin America. BRI finance includes development finance (which is led by policy-based financial institutions and state-owned banks, and takes the form of bank loans) and diversified finance (which provides various financing channels such as equities, stocks, and bonds via China’s capital market). In the past, BRI finance focused on infrastructure projects to meet basic needs for infrastructure construction and economic growth in BRI countries. As infrastructure facilities are not very appealing to the profit-oriented private sector, government-led development finance became an important way to provide and regulate public goods in less developed countries.

5.1.1 Importance of Diversified BRI Finance for BRI Countries

  1. (1)

    Introduction of capital markets can meet funding demand in BRI countries

As previously stated, the current BRI investment and financing system is mainly based on developmental financial tools, mostly bank loans. However, some BRI countries have less developed economies that are faced with major financial pressures. This leads to high uncertainty over long investment periods. The risk level does not match bank loans for which companies’ short-term solvency and the quality of tangible assets matter the most. Hence, fiscal incentives such as loan discounts or policy-based guarantees may be required to distribute the funding costs and risk of losses.

Capital markets can enhance the risk tolerance via risk pricing, and provide sustainable short- to long-term financial services based on companies’ life cycles. Data from the World Bank shows that BRI countries’ demand for infrastructure investment alone may reach US $649.9 bn in 2030,Footnote 1 and demand for funding may be even greater considering that actual construction is not limited to infrastructure. To guarantee sufficient and sustainable funding, a market-oriented investment system led by the private sector and guided by governments may need to be built.Footnote 2 Capital markets in most BRI countries, restrained by economic scale, are small and subject to issues like limited liquidity. It is therefore important to leverage China’s financing and investment capabilities, and to introduce diversified financial instruments into BRI finance.

Specifically, PE and venture capital (VC) with high risk tolerance and long investment periods may become a major source of funds for medium-sized, small, and start-up companies in BRI countries. China has a large-scale, internationalized, and multi-layer capital market. Its stock market financing, such as A- and HK-share listing and refinancing, can provide additional financing channels for growth-stage companies in BRI countries. Bonds can be introduced to attract funds with different levels of risk preferences such as non-bank institutions, and provide fund support for projects with relatively controllable risks, like infrastructure construction.

Judging by the historical development of global markets, we think funds that initially flowed to emerging markets were mostly in the form of loans and trade-related borrowings, and gradually expanded to other financial instruments, including equity investment, secondary stock investment, secondary bond investment, and loans and others. According to the World Bank, over three-fourths of net fund inflows into developing countries over 1980–1982 were loans and trade-related borrowings for sovereign governments. The share of bond investments was low, and secondary stock investments barely existed. The investment risks and trade costs decreased after developing countries loosened regulations on financial markets, technologies and financial instruments improved, economic conditions stabilized, and liabilities declined.

Moreover, some developing countries delivered strong economic growth, which offered high expected returns and solid investment opportunities. As a result, fund flows to developing countries via secondary stock and bond markets and FDI rose significantly, and their share in total fund inflows exceeded 75% in 1995–1996. In addition, the major receivers of funds shifted from governments to the private sector. Over 1986–1995, the number of emerging market country funds and regional or global emerging market funds rose from 19 and nine to around 500 and 800, and combined assets of all emerging market funds increased from US $1.9 bn to US $130 bn.Footnote 3 Based on data from the Institute of International Finance (IIF),Footnote 4 we estimate the shares of equity investment, other creditors’ rights investment, bank loans, and stock investment in global net private capital flows to emerging markets by 2014 were 45%, 30%, 15%, and 10%, respectively.

  1. (2)

    China’s capital market can provide financial development experience and support for industrial development in BRI countries

Overall, most BRI countries still lag developed countries in the development of capital markets and real industries. In addition to economic support like loans, advanced development experience and industrial resource support are also needed during the transformation of capital markets and real industries. China’s multi-layer capital market and its institutional structure have steadily improved. We think BRI countries can learn from China in the development of capital markets and system construction, including the building and improvement of financial regulation systems, the construction of multi-layer capital markets, the approach to boosting the real economy via capital markets, and the development of green finance and environmental, social, and governance (ESG) practices. Moreover, China’s capital market can facilitate industrial growth in BRI countries through approaches like introducing industrial resources. Equity investment companies can provide BRI firms with business models and link them to strategic shareholders and corporate partners in China. The M&A and restructuring market allows high-quality companies to expand externally and achieve economies of scale, and companies with weaker operating capabilities to be acquired or restructured.

During China’s development, the capital market played an important role in boosting the growth of the economy and companies, and in expediting the transformation of the economic structure. After more than 30 years of development, China’s capital market has been the world’s second largest as of 2020s. Total market cap of the A-share market by end-2022 totaled Rmb79 trn, with the balance of bonds reaching Rmb141 trn. The multi-layered capital market (i.e., integration of regional equity markets, NEEQ, Beijing Stock Exchange, ChiNext, Sci-Tech Innovation Board, and Main Board) contributed to the development of the real economy, economic transformation and financial sector reform, and optimization of corporate governance.

First, the capital market boosted growth in direct financing and the real economy. Cumulative equity financing in China exceeded Rmb21 trn as of end-2020.Footnote 5 According to the People’s Bank of China, the balance of direct financing by end-2022 totaled Rmb101.8 trn, accounting for around 29.6% of the balance of social financing.

Second, the capital market expedited economic transformation. Since 2018, companies in emerging industries of strategic importance such as the semiconductor, information technology, and medical care industries have raised funds via the A-share market. The registration-based IPO reform allowed the listing of unprofitable innovation companies, red chips, and those with special equity structures.

Third, the capital market boosted reforms and opening-up in the financial sector. As interconnection mechanisms improved and expanded, and with restrictions on investment quotas and on the ratio of foreign shareholdings being lifted, fund flows in China’s financial market accelerated. The share of foreign funds in the market cap of A-share outstanding stocks rose from 3.7% in 2014 to 9.8% at end-2022.Footnote 6

Fourth, requirements for information disclosure and tightening of regulations helped improve corporate governance at listed firms and bond issuing companies.

5.1.2 Diversification of BRI Finance and Capital Market Development

For Chinese funds and investors, as China switched from rapid growth to high-quality growth and some new-economy sectors matured, investment opportunities and returns began to decline. Meanwhile, BRI countries have various economic entities, and some countries remain in the early stages of economic transformation. This provides more investment options and potential additional returns for domestic capital market investors. First, the variance of bond investment returns among BRI countries could be high due to the large spread of their international ratings, which helps Chinese-funded institutions optimize their risk investment portfolio and enhance investment returns. Second, the interconnection of Chinese stock exchanges with those in BRI countries, if built, would provide additional channels for fund outflows. Moreover, as the reform of the Stock Connect system continues, high-quality companies from BRI countries may be listed in the A-share and H-share markets, providing more investment choices for domestic investors. Third, as for equity investment, new economy industries in some BRI countries remain in the early stages of development, presenting opportunities for investment, M&A, and restructuring. For example, digital payment volume in BRI countries like Indonesia, the Philippines, and Vietnam reported higher growth than the global average after infrastructure facilities improved. Moreover, fields such as digital finance have become a focus of investment in Southeast Asia. China’s PE firms may continue to benefit from the boom in BRI internet markets.

For financial intermediaries like securities brokers, a sustainable and improved system for opening-up may expedite their globalization. China’s securities companies are generally in the early stages of global expansion, and mainly provide cross-border services for local clients. Given the solid cooperation between China and BRI countries and the similarity of culture in China and some BRI countries (mostly Asian countries), we think BRI projects may help Chinese-funded securities firms expand their overseas business and establish a global presence, creating a new revenue driver.

In addition, the interconnection of exchanges and infrastructure facilities for payment, clearing, and settlement between China and BRI countries could reduce the friction cost of foreign exchange related issues. The communication between exchanges, technologies, and other fields can boost the opening-up of China’s capital market and create mutual benefits for both China and BRI countries.

Lastly, the development of BRI capital markets may set an example for the development of loans and resolution of debt defaults in BRI finance. BRI capital markets are a comprehensive way to export capital, industrial resources, and managerial experience rather than pure fund outflows. This helps enhance the possibility of successful investment and investment returns, and helps prevent failures and debt defaults caused by low efficiency. The overall scale of BRI capital markets remains small, and they cannot replace BRI loans. However, we think the market experience can be used as a reference for company assessment and project risk control for loan granting, thus reducing the default risk.

5.2 Structure and Characteristics of Existing BRI Capital Markets

After analyzing the importance of capital markets to BRI countries, Chinese capital, and Chinese financial institutions, we summarize the structure of capital markets in, the sources of overseas capital inflows into, and China’s capital investment in BRI countries.

5.2.1 BRI Capital Markets Are Generally not Large, but Each Have Their Own Characteristics

The development of capital markets is correlated with the stage of economic growth. Capital markets are mature in developed countries like South Korea, Italy, Luxemburg, and Singapore, but have developed slowly or have yet to be established in developing or less developed countries.

However, developed BRI countries are restricted by the size of their economies, and they still have smaller capital markets than China. As of end-2022, the total market cap of listed companies in South Korea was merely US $1.6 trn, which was low compared with total market cap of listed companies of Rmb79 trn or US $11.3 trn in the A-share market. For the bond market, outstanding bonds in Italy totaled around US $3.5 trn by end-2022, while the amount in China was Rmb141 trn or US $20.3 trn.

Developing and emerging-market BRI countries have smaller stock and bond markets, and their financing capabilities are relatively weak. By end-2022, the market cap of listed companies in the United Arab Emirates, Indonesia, Russia, and Argentina totaled US $873.6 bn, US $610.3 bn, US $150.1 bn, and US $53 bn, and the balance of bonds reached US $239 bn, US $552.6 bn, US $646.1 bn, and US $339.7 bn.

It is worth noting that amid their economic growth, the stock markets of some BRI countries have grown rapidly. The Indonesian stock market, for example, is a multi-layered and multi-type investment market comprising a main board, development board, acceleration board, and new-economy board. It has become one of the most active IPO markets in Southeast Asia. According to the World Federation of Exchanges (WFE), 429 companies were listed in Indonesia over 2010–2022, with total IPO proceeds reaching US $39.04 bn, both ranking No. 1 in Southeast Asia. By market cap of outstanding shares, Indonesia-listed companies are mainly financial firms such as banks and companies in industries with local advantages. By end-2022, foreign investors accounted for one-third of stock transactions in Indonesia.

Emerging-market countries, which were late entrants into the bond market, mostly started with sovereign bonds (especially fixed-interest rate sovereign bonds), and expanded to credit bonds. Their bond markets show different characteristics due to the differences in economic development, politics, and culture. For example, bond markets in South Africa are more developed and boast high liquidity, and credit bonds are mainly issued by banks. According to AsiaBondsOnline, Malaysia is one of the most developed bond markets among ASEAN countries, as well as the world’s largest Islamic bonds market. The proportion of overseas investors as of end-2021 reached as high as one-third.

5.2.2 Share of Capital Market Investments like Equity and Bonds in Sources of Overseas Capital Varies Significantly Among BRI Countries

Sources of overseas capital vary significantly among BRI countries due to factors such as the economy, culture, and the size and structure of their capital markets. In countries with relatively developed capital markets, overseas investment mainly goes to equities and debt securities (e.g., according to IMF, around 60% for South Korea and over 40% for New Zealand in 2022 vs. about 15% for Argentina in 2022, which has a less developed capital market). Specifically, South Korea relies more on foreign investment in equity securities. Moreover, a country’s reliance on financing via equity or debt securities also fluctuated in different years as the financial environment changed.

5.2.3 Development of Equity and Bond Markets in BRI Capital Markets

The relatively modest size of the financial markets in BRI countries restricts the amount of China’s investment in BRI capital markets. By end-2022, BRI countries accounted for around 2.1% of China’s PE investment, and companies from BRI countries comprised merely 3% of Hong Kong SAR listings and 2% of US listings. As for bonds, domestic BRI bonds by end-2022 accounted for only 0.06% of China’s total domestic bonds, and BRI countries made up 0.35% of RMB-denominated bonds issued by non-Chinese issuers in the Chinese mainland, and 6.7% of RMB-denominated bonds issued in Hong Kong SAR. Meanwhile, BRI countries as of end-2021 accounted for around 22% of global GDP, 40% of China’s exports, and 44.9% of China’s imports, according to data from the World Bank World Development Indicators (WDI) and United Nations Conference on Trade and Development (UNCTAD).

First, PE investment is small in scale, and BRI funds are mainly invested in companies with BRI-related businesses. According to Zero2IPO, domestic PE companies’ annual average direct investment in BRI countries since 2014 was merely Rmb46.8 bn, accounting for around 2% of total PE investment and 14% of overseas direct investment. China’s PE investment in BRI countries has been falling in recent years, dropping from a high of Rmb91.5 bn in 2017 to Rmb34.6 bn in 2022. Data from Pedata shows that China had eight registered BRI PE funds by end-March 2023. Only one fund directly invested in a local company in the United Arab Emirates (China Investment Capital Funds Management’s BRI satellite media fund), while the others indirectly invested in BRI markets through domestic companies with BRI businesses.

Second, the size of IPOs of companies from BRI countries is relatively small. As of end-2022, the H-share market had 90 companies from BRI countries (3% of total listings), and the US-share market had 87 companies from BRI countries (2% of total listings). Moreover, these companies were mainly from countries with mature economic development, such as Singapore, Malaysia, Argentina, and South Korea.

In addition, Chinese-funded securities brokers still need to strengthen their competitiveness compared with foreign investment banks, and they did not participate as much in the IPO of companies from BRI countries in Hong Kong SAR and the US. By end-2022, Chinese-funded securities firms accounted for 23% of the H-share IPO underwriting of BRI companies (US $2.25 bn) and 2% of the US-share IPO underwriting of BRI companies (US $51 mn).

Third, issuance of RMB-denominated bonds in BRI countries is limited. The BRI capital markets currently mainly focus on two types of bonds: (1) Domestic BRI bonds or bonds with funds raised for BRI projects; and (2) cross-border bonds, including RMB-denominated bonds issued by non-Chinese issuers in the Chinese mainland and RMB-denominated bonds issued in Hong Kong SAR. According to Wind, the issuance of domestic BRI bonds fluctuated sharply over 2016–2019, reaching its peak of Rmb46.1 bn in 2018 and staying below Rmb10 bn in other years. The issuance volume has stayed above Rmb20 bn from 2020 onwards. The net increase in the issuance of domestic BRI bonds dropped to below zero in 2021 due to the maturity of a significant amount of bonds, and rebounded in 2022.

Although the issuance volume of panda bonds and dim sum bonds has been high, few such bonds were issued by companies from BRI countries. International development companies gained regulatory approval to issue RMB-denominated bonds in the Chinese mainland in 2005, but the initial issuance amount was low. The issuance volume only began to rise significantly after pilot firms’ overseas parent companies were allowed to issue RMB-denominated bonds in the Chinese mainland, and the policy clarified that funds for subsidiaries in the Chinese mainland are not included in the risk-weighted balance of cross-border financing in April 2016. Issuance of panda bonds hit a historical high of Rmb130 bn in 2016, delivering a net increase of Rmb124.7 bn. The annual issuance volume has since ranged between Rmb50 bn and Rmb110 bn. Companies from BRI countries—including Singapore, Malaysia, Russia, Italy, and South Korea—have issued panda bonds, but their share in total panda bond issuance remains low.

The first dim sum bond was issued in 2007. The issuance amount reached Rmb570.2 bn in 2014 before subsequently falling due to RMB FX reform, but rebounded in 2018, exceeding Rmb1 trn in 2022. As of end-2022, the balance of dim sum bonds in BRI countries was Rmb81.2 bn, around 6.7% of the total balance. Issuing dim sum bonds does not require regulatory approval, but the FX cost of using funds may be a major reason for the limited issuance of these bonds overseas.

5.3 Growth Opportunities for BRI Capital Markets

BRI capital markets remain relatively small in scale, and still face challenges from existing policies and their stages of financial development. However, there are also opportunities for growth. China’s capital investment may boost the development of BRI capital markets in various ways.

5.3.1 BRI Countries’ Demand for Capital Markets and Financing

Most BRI countries have relatively small capital markets, and development of capital markets is a prerequisite for economic growth. The injection of funds from other countries is therefore necessary to fill the short-term gap in funds.

BRI countries need financing denominated in currencies other than the US dollar. The dominance of the US dollar has created both opportunities and challenges for countries across the globe over the past few years. Major changes to US monetary policy have challenged the stability of the global financial market, especially BRI countries with less developed capital markets. Financing denominated in currencies other than the US dollar can help BRI countries reduce their reliance on the US dollar, and prevent market fluctuations caused by large volumes of inflows and outflows of US dollar funds.

BRI countries need long-term funding support. Emerging BRI countries need a long-term vision and stable funds that focus on long-term returns. Expanding sources of funds from countries other than the US and European countries is also good for BRI countries that want to diversify their financing over the medium to long term and boost long-term economic growth.

It is important for BRI countries to learn from other countries’ experience in developing capital markets. China’s capital market developed rapidly over the past few decades, and BRI countries can learn from its experience. In addition, BRI countries need industrial experience and resources. Moreover, resource consolidation and potential business opportunities would bolster economic growth in BRI countries.

5.3.2 What China’s Capital Market Can Bring for BRI Countries

First, China can provide stable non-US dollar-denominated financing for BRI countries to ease the impact of volatile US-dollar inflows and outflows on their financial stability. The sharp fluctuations in inflows and outflows of US dollar funds caused by the US Federal Reserve’s adjustments to monetary policy may exert negative impacts on the financial stability in BRI countries. The US Federal Reserve cut the interest rate by 225 bp at the end of 2018, and hiked the rate 10 times by a total of 500 bp between early 2022 and May 2023. Its control over the supply and overseas FX rate of the US dollar via adjustments to the target range for the Federal funds rate to some extent disrupts the financial stability in other countries.

Under the current international currency system, the spillover effect of US dollar funds has become a major trigger of the global financial crisis. In 2022, after the Federal Reserve announced a new round of rate hikes, over 90 economies across the globeFootnote 7 followed suit, leading to an increase in financing costs. For BRI countries, excessive reliance on the US dollar may weaken the effectiveness of their monetary policies and cause financial risks. Hence, it is necessary for them to increase non-US dollar-denominated financing to maintain financial stability.

The RMB is less volatile in terms of FX rate and interest rate, and can provide stable non-US dollar-denominated financing for BRI countries. Following its inclusion in the Special Drawing Rights Basket in 2016, the RMB has increasingly become an “anchor currency” for BRI countries. Data on the FX rate of currencies in BRI countries shows that over half of the currencies maintained a more stable FX rate against the RMB than against the US dollar, and currencies with a more stable FX rate against the US dollar are mainly commodity currencies affected by the oil dollar, such as the Emirati dirham, Saudi riyal, and Kuwaiti dinar. The RMB rate fluctuates less than the US dollar rate. RMB-denominated financing can help reduce the volatility in financing costs for BRI countries.

Second, China can provide stable long-term funding support for BRI countries. The domestic capital return rate in China is currently relatively low due to economic slowdown, driving up demand for capital outflows. Currently, the real economy sector in China exhibits low willingness and ability for additional leverage, and demand for social financing may remain weak. Coupled with a possible economic downturn and low inflation, this may keep China’s interest rates from rebounding to a high level over the near term. Domestic interest rates therefore may remain lower than overseas interest rates over the long term, boosting demand for overseas investment.

We learned from overseas Chinese-funded institutional investors that they have shifted their offshore investment focus away from Chinese-issued US dollar bonds to BRI-issued US dollar bonds. As the RMB interest rate dropped to below the US dollar interest rate, and the supply of Chinese-issued US dollar bonds declined on the low cost of domestic loans, Chinese-funded financial institutions began to explore investment opportunities in US dollar bonds issued by other BRI countries. Financing of lower-cost and long-term funds also caters to the demand of BRI countries amid US dollar rate hikes and rising fund costs. Hence, we think China may sustain high demand for overseas investment over a long period of time, while BRI countries can acquire low-cost and long-term sources of financing.

Third, China can share its experience in developing capital markets with BRI countries. Chinese financial companies can share with BRI countries their experience in developing businesses such as equity investment, PE financial consulting, and IPOs for new-economy industries like information and communication technology (ICT) and e-commerce. Moreover, they can leverage their expertise in M&A funds, M&A financial consulting, and IPOs to help local companies in BRI countries with relatively high levels of economic development and strong capital. Market-oriented capital market services can offer funding support for BRI countries and facilitate the transformation of their economic structures.

Moreover, China can help BRI countries create more long-term opportunities to grow their industries. Globalization has strengthened economies of scale, and even small countries can benefit via free trade. However, the rising trend of deglobalization has impeded countries’ participation in the global market. Developing countries would be more heavily affected by factors like the COVID-19 pandemic, geopolitical conditions, and global economic downturn. As BRI countries generally have small economic scale, we think BRI finance and industrial cooperation can help related countries benefit from China’s economies of scale amid deglobalization, and introduce companies from BRI countries into China’s mature industrial value chain. This should facilitate industrial upgrades in both China and BRI countries and create long-term growth opportunities. The flow of Chinese funds to BRI countries is in sync with BRI countries’ goals of developing capital markets and attracting investment, and we expect opportunities for growth for BRI capital markets.

5.4 Reflections and Insights

We expect the BRI capital markets to rapidly scale up over the next 5–10 years, boosted by the aforementioned opportunities for growth, policy support, and incremental investment. As capital projects are not yet fully deregulated, China’s outward direct investment in BRI countries is currently more active than cross-border fund flows in the secondary market (Fig. 5.1). Through outward direct investment, we think Chinese companies can better understand the national institutions and business environments in BRI countries, and reduce the barriers to secondary market investment. This can also help BRI countries understand the Chinese market and boost fund inflows.

Fig. 5.1
A bar chart and a line graph of China's direct investment in B R I countries and the percentage in China's total outward F D I versus the years from 2015 to 2021. The investment is the highest in 2021 at $21 billion. The line first declines, followed by a fluctuating rising trend.

Source Wind, CICC Research

China’s direct investment in BRI countries steadily edged up.

Full size image

Looking forward, we believe financial cooperation, especially in capital markets, will enter a new stage of development. Wind data indicates that China’s outward financial investment surged from US $55.3 bn in 2010 to US $300.4 bn in 2021, a CAGR of 16.6% (Fig. 5.2). Nevertheless, the proportion of overseas financial investment in total financial assets and liabilities remains low compared with developed countries (1.8% in 2021 in China vs. around 11% since 2005 in the US, according to Haver). Hence, we think China’s outward financial investment still has considerable market potential as the financial opening-up and economic structure transformation continue.

Fig. 5.2
A bar chart and a line graph of China's outward financial investment and the percentage y-o-y growth versus the years from 2010 to 2021. The investment is the highest in 2021 at $290 billion. The line first declines, peaks at 52, followed by a fluctuating declining trend.

Source Wind, CICC Research

China’s outbound financial investment surged.

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Over the medium to long term, we expect the share of outward financial investment in China’s total financial assets and liabilities to rise to 5%. Based on the growth of China’s overseas financial assets and liabilities over the past decade, we estimate China’s outward financial investment may reach US $1 trn in the next ten years.Footnote 8 China’s direct investment in BRI countries grew steadily over 2015–2021. Its share in China’s total direct investment was 11.4% in 2021, and we expect the ratio to reach or even exceed 15% over the long term as more supportive polices are introduced and as economic and trade cooperation between China and BRI countries deepens further. We estimate the BRI finance market may reach close to US $200 bn.