The Munich-based German think tank ifo Institute published a study on Wednesday, saying that the China-proposed Belt and Road Initiative (BRI) can help Bavarian companies enter new markets and ease access to raw materials.
Thanks to the BRI, trade between Germany’s Bavaria and China is expected to increase by 8 percent, with exports to China expected to grow by 2.2 billion euros, indicated the new study.
In addition, trade between Bavaria and the transit countries in Central Asia could increase by 3 percent, with exports to those countries and regions expected to expand by 53 million euros, according to the study.
“The initiative’s improved infrastructure would above all help to reduce transport costs,” the Institute underlined.
In the meantime, ifo Institute cautioned about investment risks in regions like Central Asia, where economic and political risk levels remain high.
Moreover, the think tank called on German policy makers to put in place the framework necessary to make the Belt and Road Initiative an economic success for Bavaria and Germany at large.
“This would enable European companies to benefit from changes in the countries along the Silk Road and remain competitive,” it noted, adding that it would be worthwhile to deepen relations with these countries and to work toward a reliable legal and economic basis for business, as this would facilitate market access for German companies. (one euro currently equals to 1.11 U.S. dollars)