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00:00. NEJRA WAS TALKING ABOUT THE RISKS ASSOCIATED WITH THESE PROJECTS. YOU TALKED ABOUT BELT AND ROAD INITIATIVE MARK TWO. THE GOVERNMENT IS STRESSED TO ENSURE THESE PROJECTS ARE SUSTAINABLE. THEY ADDRESS THE RISKS IN TERMS OF FINANCING ENVIRONMENTAL STANDARDS. ARE YOU SEEING ANY OF THOSE COMMITMENTS BY BEIJING IMPLEMENTED ON THE GROUND? > > AN INSTRUMENT STATEMENT WAS MADE BY PRESIDENT XI. HE SAID THE NEXT STAGE HAD TO BE OPEN, GREEN, AND CLEAN. WE ARE SEEING A FOCUS OF EFFORT TO MAKE SURE THAT INTERNATIONAL PROJECTS ARE MUCH MORE OPEN AND INCLUSIVE IN TERMS OF INTERNATIONAL INVOLVEMENT, THE FINANCING, THE FEASIBILITY BEHIND THESE PROJECTS IS ROBUST ENOUGH TO ATTRACT CAPITAL FROM MULTIPLE SOURCES. TOM: THERE HAS BEEN A MATERIAL CHANGE. MANY WOULD SAY THOSE ARE NICE WORDS. THE REALITY IS, IT IS NOT BEING MET. > > WE ARE IN THE MIDST OF THAT CHANGE RIGHT NOW. WHAT I WOULD HOPE TO SEE, THERE WILL BE A NUMBER OF THESE TRANSACTIONS WHICH EVIDENCE PROOF OF CONTACT -- CONCEPT. TOM: HOW DO YOU ADVISE BUSINESSES IN TERMS OF NAVIGATING SOME OF THESE RISKS? > > THE ADVICE WE PROVIDE, WE PROVIDE CONDUCTIVITY AND GENETIC TIP -- GEOGRAPHICAL OPPORTUNITIES. I THINK THE ADVICE THAT WE HAVE TO GIVE CLIENTS IS HOW TO NAVIGATE THOSE COMPLEXITIES. WHETHER THEY ARE POLITICAL RISK COMPLEXITIES, CREDIT RISK COMPLEXITIES. OF ALL -- HOW TO ASSURE THE THE EXECUTION RISKS ARE WELL TAILORED AND WELL MET. TOM: THE VALUE OF THESE PROJECTS FELL IN 2018 BY ABOUT 13%. IT FELL 7% IN THE YEAR TO AUGUST 2019. IS THAT A REFLECTION OF THE LACK OF FUNDING OR A PUSH BACK FROM THESE HOST COUNTRIES? > > IT ' S DIFFICULT TO GIVE YOU SPECIFIC REASONING BEHIND THAT. SOME OF THIS RELATES TO THE FACT THAT EVENT SPACE ACTIVITY, LARGE CROSS-BORDER M & A, DIDN ' T REPEAT YEAR ON YEAR. SOME OF THE VOLUME DROP MAY BE RELATED TO THAT. OTHER ASPECTS OF DECLINE MIGHT BE THAT THE PROJECTS ARE TAKING LONGER TO NEGOTIATE AS COUNTRIES ARE BECOMING MORE CONCERNED AROUND FISCAL COMMENTS AND ENSURING THAT WHATEVER THEY DO COMMIT TO IN TERMS OF LONG-TERM EXPENDITURE IS SOUNDLY STRUCTURED AND MET. TOM: HOW DOES THE TRADE WAR IN THE SLOWING GLOBAL ECONOMY IMPACT THE BELT AND ROAD INITIATIVE? > > WHAT IT ACTUALLY HAS PROVIDED FOR IS A DIVERSIFICATION. IT RELIES HISTORICALLY ENTREE BETWEEN THE U.S. AND CHINA. IT HAS BEEN REPLACED BY A RECOGNITION THAT THERE IS A DIVERSIFICATION OPPORTUNITY AVAILABLE IN TERMS OF TRADING. WE SEE INJURE ASIA TRADE AS BEING SOMETHING THAT WILL CONTINUE TO GROW AT A FAST RATE THAN TRADE WITH EUROPE OR THE U.S.. TOM: SOME A VISIT ABOUT -- SOME OF IT IS SHIFTING THAT CAPACITY AS WELL. > > AS CHINA MOVES UP THE SUPPLY CHAIN IN THE VALUE CHAIN OF ACTIVITY, THE OPPORTUNITY FOR CHINA TO PUSH DOWN LOWER COST ACTIVITY INTO OTHER MORE EFFICIENT CENTERS. THE ANON, BANGLADESH. THEY HAVE BEEN SIGNIFICANT BENEFICIARIES OF SUPPLY CHAIN RENEGOTIATION. TOM: HSBC HAS BEEN INVOLVED SINCE DAY ONE. WHAT WAS THE VALUE TO YOUR BUSINESS? COULD YOU GIVE US A METRIC? > > FOR HSBC, THIS INITIATIVE PLAYS OUT IN MANY DIFFERENT RESPECTS ACROSS OUR GEOGRAPHIES AND LINES OF BUSINESS. IT ' S NOT JUST ONE TRANSACTION IN ONE MARKET. WE HAVE A VERY LARGE CATCH OF OPPORTUNITIES. ACROSS OUR BUSINESSES, WE THINK THE VOLUME OF OVERALL BUSINESS WE HAVE ORIGINATED THROUGH THE BELT AND WROTE IS IN A IS OF $100 BILLION. .

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HSBC’s Hussain on China’s Belt & Road Initiative, Project Risks, HSBC Benefit

Mukhtar Hussain, head of Belt and Road initiative at HSBC, discusses China’s Belt & Road initiative, the risks associated with some of the projects, how he’s advising businesses around these risks, how the trade war is impacting the initiative, and how it plays out for HSBC’s bottom line. He speaks on “Bloomberg Daybreak: Europe.” (Source: Bloomberg)

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