'Belt and Road' initiative faces challenges, may increase mistrust between big powers: think tank

China's "Belt and Road" initiative will not only bring economic opportunities but also face geopolitical, legal and market risks, as it may find it hard to protect the interests of big powers, and instead increase distrust among them, according to a recent think tank report.

A majority of countries along the Belt and Road have different religions and cultures, and they may question the purpose of the "Belt and Road" initiative if the relations with the local public are not handled properly under the initiative, the Beijing-based Center for China and Globalization (CCG) said in the report, stressing that the enterprises should learn the local customs before making investments there in order not to evoke nationalist sentiment among the local people.

Most of the countries covered by the "Belt and Road" initiative are ones facing complicated geopolitical problems, which may pose a potential political risk to the implementation of the initiative, the report said.

The report cited the high tensions in the Middle East and Ukraine as an example, saying that the political instability in the regions may deteriorate the investment environment there.

The report also said that the countries along the Belt and Road such as Pakistan and Afghanistan are undergoing political transformation, with rampant separatist and extremist activities. These risks may lead to turbulence and even a war, which can harm the investments by outside enterprises.

In terms of the big power relations, the "Belt and Road" initiative will to some extent affect the international economic structure, challenging the interests of the established powers including the US and Russia, according to the report.

Besides, the investment in the countries along the Belt and Road may meet some resistance, as these countries normally lack sound economic governance system and many investors are not familiar with the local economic and trade laws, the report said, adding that it will increase these investors' investment costs there.

The report also highlighted the differences between the countries along the Belt and Road in market openness and supervision, which it said would increase the complexity of investment evaluation and the possibility of a default, thus damping down the desire for investment there.

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