Progressing with the World
Common Development and Prosperity
A board of directors and a senior management team have been selected for the US $40 billion Silk Road Fund, which will start investing soon, its chief executive, Jin Qi, said at a press conference that ran concurrently with China’s annual NPC session on March 12.
According to Jin, the fund will invest mainly in infrastructure and resources, as well as industrial and financial cooperation, in an effort to achieve common development and prosperity.
President Xi Jinping announced the creation of the fund in November 2014, and it was established on December 29, 2014. It is part of China’s national strategy to revive the continental and maritime Silk Roads by financing major infrastructure projects along the centuries-old trading routes. The fund has drawn wide international attention as it is by far the largest China has ever proposed to finance multilateral projects in the Eurasian economic circle.
The fund has been assessed as a good alternative to the China-led Asian Infrastructure Investment Bank for financing infrastructure projects such as high-speed railways, airports and roads in Asia. Analysts say that the fund will help expand international markets for Chinese industries including construction, equipment manufacturing, utilities, high-speed railway, oil and energy, some of which are struggling with excess capacity at home.
The fund is not an aid agency, said Jin, who expects market-oriented principles to be put into operation and reasonable returns for shareholders. The company was jointly backed by China’s foreign exchange reserves, the China Investment Corp., the Export-Import Bank of China and China Development Bank. In the first phase, the company raised US $10 billion, with foreign exchange reserves taking up 65 percent, the China Development Bank, 5 percent and the other two companies each investing 15 percent.
The fund will comply with market rules and the international order of finance, welcoming participation by domestic and overseas investors such as the China-Africa Development Fund and the Asian Infrastructure Investment Bank, Jin added.
The Belt and Road Initiatives are not just a path forward for China, but a common cause for all countries along the routes. China will not enjoy the benefits alone, but share them with the rest of the world.
