China's rise will change how investors view riskiest markets

Singapore

CHINA'S Belt and Road initiative will be a boon for frontier markets, but investors should be careful reading into the implications, says Exotix Partners LLP's Hasnain Malik.

Unlike the International Monetary Fund, China doesn't tie the provision of funds to changes in policy by the recipient country, said Mr Malik, the Dubai-based head of equities research at the investment firm that specialises in frontier and illiquid markets.

"The start of an IMF programme can signal a positive change from policies, which were unfriendly to private and foreign investors," he said. "The start of China funding likely reinforces existing good or bad policies for private, foreign investors." Conceived in 2013 as a way of deepening China's ties with countries along the Silk Road route, Belt and Road has become President Xi Jinping's signature international initiative. Expanded to include nations as far afield as Fiji and the Maldives, it's also seen as China attempting to move into a space traditionally filled by the US, which has p…