Chinese firms wary of political risks on Xi's Belt and Road initiative

Hong Kong

AS the global limelight fades from Chinese President Xi Jinping's "Belt and Road" summit, the main actors - Chinese state-owned companies - are warning about the political risks that they face along the route.

Earlier this month, Mr Xi outlined plans to direct as much as 840 billion yuan (S$170 billion) to build roads, railways, ports and pipelines across Asia and beyond, securing China's central role in world trade. The plan has the country's state-owned enterprises weighing investments in 65 participant nations, almost two-thirds of which have sovereign debt ratings below investment grade.

"Chinese companies' risk awareness has grown, but they still lack the ability to discern where to invest or effectively manage overseas risks," said Yin Yili, a vice-president at a unit of China Communications Construction Co (CCCC), one of the nation's largest state-owned companies. "Over these past years,…