It is important here to examine here just HOW the BRI is being financed. Over the past 5 years, China’s state-owned enterprises (SOEs), which are listed on exchanges in Shanghai and Hong Kong, have carried out 3,116 BRI projects. SOEs constitute one component of BRI’s financial backbone, with the others coming from banks and multilateral institutions such as the Asia Infrastructure Investment Bank (AIIB) and the Silk Road Fund. A successful example of SOEs in action is China Merchant Port Holdings’ investment in the massive Bagamoyo port in Tanzania, which is slated to become the largest in Africa. Another success story is at the Greek port of Piraeus, where China COSCO, a shipping and logistics SOE, has a controlling stake.

Yet betting on SOEs will not prove ideal investing grounds- for the time being. Hermes’ head of emerging markets, Gary Greenburg, regards the BRI as a tool for strategic gain rather than providing a return on investment for minority investors, a view also argued by Mihir Kapadia, Sun Global Investment’s founder. BRI projects, Mr. Greenburg highlights, should not be the primary basis for investing in China’s SOEs.

It should further be noted that a considerable number of the recipient ‘partner’ countries are ranked lowly in terms of good governance, as shown through countries such as Laos (#135), Kenya (#143) and Turkmenistan (#167) in Transparency International’s 2018 Corruption Perceptions Index. Political and reputational risks in countries such as Pakistan and Myanmar, in which several BRI related projects lie in areas of armed conflict, understandably shake investors’ confidences.

Moving away from Chinese SOEs, investors would do well to keep an eye on foreign firms from developed countries involved in the BRI, who are estimated to make profits. Multinational companies (MNCs) focused on innovative technology stand to gain big. One such MNC is ABB, a Swiss-Swedish multinational specializing in robotics, heavy machinery and automation technology. The company has ridden the ‘BRI wave’-for example, it established the ABB Xinjiang Service Centre in Urumqi-a key area in the BRI-as early as 2015. The centre has aided a diverse number of firms looking to profit in Xinjiang with services ranging from installation and upgrading of existing technologies to training and consulting.

ABB also secured pioneering projects within the region, the most notable being the world’s first 1,100 KW ultra-high voltage direct current (UHVDC) transmission link from Changji to Fuquan. Similarly, Caterpillar, the American construction machinery and equipment company, has positioned itself to be a vital cog of the belt and road progress; it saw a 22% rise in its Asia Pacific sales, half of that increase being attributed to China. Leveraging its reputation and range of expertise, Caterpillar has come out on top in striking deals for projects at the expense of its Chinese rivals.

On the surface, the same level of optimism is seen in the digital sector. There is a seemingly ‘symbiotic’ (albeit tense and tenuous) relationship between China’s leadership and the country’s internet companies through the initiative, as a research article in the International Journal of Communication notes. In essence the former puts said companies at the forefront of the BRI in the hopes of driving forward the building of a China-centric transnational network infrastructure, promoting an internet-powered ‘inclusive globalization.’

The latter group have also sought the initiative as a means to secure funding and political support to aid their development and growth. One can take J.D.com’s plans to open up 20 warehouses across BRI-affiliated countries as an example. More pronounced, however, is Alibaba’s expansion into South and Southeast Asia. Its 2017 launch of a ‘digital free trade zone’ (DFTZ) with the Malaysian government (then under ousted Prime Minister Najib Razak), and its acquisition of Daraz, a Pakistani e-commerce site, send resounding signals on its ambitions for expansion within said countries.