Report: Companies must be aware of risks, rewards

Companies from China should be aware of the significant risks and the considerable opportunities as the government implements a strategy to revive the historical trading connections along the ancient Silk Road, said a report from a United Kingdom-based think tank.

Though the Silk Road Economic Belt and the 21st Century Maritime Silk Road offer many opportunities to boost trade, they also bring challenges due to the uncertain political, economic and regulatory conditions in the involved countries and regions despite their strategic importance to China's foreign relations, the Economist Intelligence Unit said in its report.

Citing an example, the report highlighted the political stability risk in Kazakhstan and said popular protests could drive an increasingly nationalist agenda. Similarly, foreign firms may suffer unfair rulings on contractual disputes in the local courts in Vietnam. Labor market risks in Malaysia may increase as the labor shortages are likely to persist, it said.