A second wind for an ancient route(2)

The Asian Development Bank estimates infrastructure financing demand in Asia will be around $8 trillion between 2010 and 2020. The latest HSBC global research report also said that China's infrastructure sector has the capacity to meet the needs of Asia and further abroad. It also said China's overseas investment should also generate demand for its exports and help take up the economic slack.

"Since the investment will be in roads, railways, ports and airports, it should benefit all parties, due to lower trade costs. Investing in infrastructure along the Belt and Road routes will serve to develop new export markets for China, generate better longer-term returns on its foreign reserves, and act as another channel through which China can internationalize its currency, complemented by the likely boost to trade flows," the HSBC report said.

Chang said that more than 30 potential partner countries had expressed interest so far, accounting for more than 60 percent of world's population and 30 percent of global GDP.

"We think the new Silk Road plan offers a structured platform to leverage comparative advantages, improve economic cooperation and increase synergies across the region. New growth areas will be cultivated and new competitive edges could emerge through strengthening value-added, innovation, investment and market activities," Chang said.

She said that by building interdependent relationships based on shared economic interests, the initiatives would deepen political linkages, improve mutual understanding and foster long-term stability in the region.

"The agreement to set up the AIIB by countries that have territorial disputes with China suggests lower geopolitical risk and a lower probability of military conflicts," she said.

However, the HSBC report warns that details of the allocation and management of the Silk Road fund are yet to be determined and financing and operational risks could endanger the Belt and Road strategy.

As most Chinese enterprises are still at an early stage of overseas investment, there is ample room for improvement in areas such as due diligence, environmental protection and working standards, according to the report.

Southeast Asia-oriented

The willingness of China and ASEAN members to build the 21st Century Maritime Silk Road will inject impetus into upgrading the ASEAN-China Free Trade Area over the long term, industry experts say.

ASEAN Community Affairs Development Director Danny Lee said the creation of the new Maritime Silk Road is a very good concept and will bring new opportunities for China and ASEAN to cooperate in many sectors, such as trade, infrastructure and cultural exchange.

Lee, a Singaporean who joined the ASEAN Secretariat in February 2011, said there is historical and practical basis for ASEAN and China to cooperate under the framework of Maritime Silk Road vision.

"The now ASEAN member nations and China built good and frequent trade cooperation 600 years ago, evidenced by the great voyage to Southeast Asia by Admiral Zheng He (1371-1433) during the Ming Dynasty (1368-1644)," he said.

Since ancient times, Southeast Asia has been an important hub along the historical Maritime Silk Road.

Lee said that nine countries out of the 10-member ASEAN are maritime nations and ocean trade with China is vital for the development of ASEAN members.