The New Silk Road: 3 Growth Opportunities
The New Silk Road, a modern revival of the ancient trade route connecting East and West, presents a plethora of growth opportunities. This economic region accounts for over 40% of the global economy, and is being driven by three major trends:
- The energy transition
- Global supply chain disruption
- Geopolitical tensions and regionalization
These shifts are creating a new wave of opportunity in various industries. This article will highlight three of the most exciting opportunities:
Energy Transition
The New Silk Road is the world’s largest energy producer and consumer. While fossil fuels remain a significant part of its energy mix, the region is working to navigate a post-oil energy transition.
- GCC Localization Ambitions: The GCC countries have ambitious plans to localize their renewable energy infrastructure. This will create opportunities for partnerships with Asian countries, which are leading innovators in clean technologies. For example, China is a major exporter of clean technology, particularly in batteries and EVs.
- Chinese Clean Technology Sector: Chinese-made clean technology products, such as solar panels and wind turbines, are becoming increasingly popular across the New Silk Road. Chinese companies seeking to expand in these markets should partner with local entities to navigate the regulatory and cultural landscape.
Supply Chain Reshaping
Global supply chains are rapidly evolving, and the New Silk Road is at the center of this transformation.
- China+1 Strategies: While China remains a critical manufacturing hub, multinational corporations are implementing “China+1” strategies, diversifying their production to other countries in the region. This shift is being driven by a desire to mitigate risk and capitalize on lower costs in countries like Vietnam, India, and Indonesia.
- Emerging Private Capital Opportunities: The relocation of production from China is creating new opportunities for private capital investment in other New Silk Road countries. This includes investments in manufacturing, logistics, and real estate.
Financial Services
The New Silk Road’s financial sector is poised for significant growth, driven by rising wealth and changing geopolitical dynamics.
- Wealth Management Taps Private Markets: The region’s increasing affluence is creating a wealth management boom. High-net-worth individuals (HNWIs) are seeking to invest in the region’s private markets, offering opportunities for asset managers and regional banks with strong local networks.
- The Rapid Rise of Institutional Investors: The New Silk Road is a growing pool of wealth for institutional investors like mutual funds, pension funds, and insurance companies. Global and regional asset managers will play a key role in servicing these investors and driving growth in the region’s debt and equity markets.
Read Full Report
96 pages
Register New Account
• Loading times may vary •
