By Li Qiaoyi, Beijing, May 14 (Global Times)– China will add 100 billion yuan ($14.49 billion) to the Silk Road Fund as part of the country’s efforts to provide greater financial support to the Belt and Road initiative, Chinese President Xi Jinping said at the Belt and Road Forum for International Cooperation on Sunday.
China encourages financial institutions to expand their overseas yuan fund for investments with an estimated amount of about 300 billion yuan. In addition, China Development Bank and the Export-Import Bank of China will also set up special lending schemes worth 250 billion yuan equivalent and 130 billion yuan equivalent respectively to support Belt and Road cooperation on infrastructure, industrial capacity and financing, Xi said at the opening ceremony of the forum which included 29 heads of state.
“Financing bottlenecks are a key challenge to realizing connectivity,” Xi said in his keynote address, the Xinhua News Agency reported. Expanded financial connectivity has been realized since the Belt and Road initiative was proposed in 2013.
The Asian Infrastructure Investment Bank (AIIB) has provided loans worth $1.7 billion for nine projects in Belt and Road participating countries. The Silk Road Fund, officially launched at the end of 2014, has invested $4 billion, and the 16+1 financial holding company linking China and Central and Eastern European countries has been created.
“A multi-tiered Belt and Road financial cooperation network has taken an initial shape,” Xi said.
“It’s a good idea,” Radek Pyffel, the representative for Poland at the AIIB, said on China’s upgrade in funding for the Belt and Road initiative.
It’s hard to tell how much the increase will help. It depends on how much money is committed and the projects in the coming years, but I’m optimistic,” he told the Global Times on the sidelines of the forum.
The 100 billion yuan additional commitment to the Silk Road Fund and other sources of funding shows China is putting words into action to support Belt and Road related projects, said Xu Hongcai, deputy chief economist at the China Center for International Economic Exchanges, noting that a total of 380 billion yuan in loans from the two policy banks will encourage private investors to help fund Belt and Road projects.
More loans from policy banks will be a boon to Chinese companies seeking a foothold in Belt and Road participating countries, Sun Pishu, chairman of Inspur, a supercomputing company that is betting big on opportunities in cloud computing along the route of the Belt and Road initiative, told the Global Times on Sunday.