Chinese President Xi Jinping pledged a major funding boost to the country’s Silk Road Fund, saying that an extra RMB100 billion (US$14.50 billion) will be pumped into the fund to help finance infrastructure projects in Asia and upgrade trade and transportation networks between China, Central Asia and Europe.
At the same time, Xi said that China will also provide RMB380 billion (US$55 billion) in loans from two Chinese policy banks and RMB60 billion (US$8.7 billion) in aid to developing countries and international bodies in countries along the trade routes.
Chinese financial institutions will be encouraged to expand their overseas Yuan fund businesses to the tune of RMB300 billion (US$43.5 billion), Xi announced during the One Belt One Road Forum over the weekend in Beijing, without giving a timetable.
“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi told leaders from 29 countries attending the two-day forum, which was staged to deepen China’s Belt and Road Initiative. Proposed by Xi in 2013, the development strategy focuses on connectivity and cooperation among nations in Asia, Africa, Europe and beyond.
The Chinese government established the Silk Road Fund in 2014 with a target of US$40 billion to invest in infrastructure projects in Asia. The fund’s first installment of US$10 billion is composed of US$6.5 billion from the State Administration of Foreign Exchange, US$1.5 billion from China Investment Corp., US$1.5 billion from Export-Import Bank of China and US$500 million from China Development Bank, according to its website.
In January, the Silk Road Fund teamed up with China Investment Corp. and Singapore’s Temasek Holdings, as well as ARM Holdings plc and two other investors, to raise US$800 million to invest in the mobile Internet, Internet-of-Things (IoT) and artificial intelligence sectors globally.
Some investments by the Silk Road Fund include a US$100 million pre-IPO investment in BOC Aviation Ltd. and the acquisition of a 10% stake in SIBUR Holding, Russia’s largest gas processing and petrochemicals company, last year.