BEIJING
Chinese President Xi Jinping announced Sunday a $40 billion injection to kick-start the ‘Silk Road Fund’ to link Asian economies, state media reported.
Speaking at a meeting of leaders gathered for this week’s Asia Pacific Economic Cooperation summit in Beijing, Xi said the fund aimed to "break the bottleneck in Asian connectivity by building a financing platform," according to Xinhua news agency.
Addressing leaders from Tajikistan, Pakistan, Bangladesh, Cambodia, Laos, Mongolia and Myanmar, Xi invited them "to get on board the train of China's development."
He added: "Asian countries are just like a cluster of bright lanterns. Only when we link them together, can we light up the night sky in our continent."
The trade plan, named after the historic land route that once linked China to Europe, follows the last month’s announcement of the creation of a China-backed Asian development bank, the Asian Infrastructure Investment Bank, widely viewed as a challenge to U.S.-backed international banks.
China is increasingly seeking to carve out a role as a regional leader and the meeting of the 21 APEC nations is the ideal opportunity.
Xi made the pledge while proposing connected development in the Asia-Pacific region. The new fund will provide investment for infrastructure and industrial and financial cooperation projects on the “belt and road,” a reference to China’s Silk Road Economic Belt and 21st Century Maritime Silk Road initiatives.
A recent Asian Development Bank report estimated that Asia needs $730 billion a year in infrastructure investment before 2020.
Xi said funding was the greatest challenge facing Asia. "To address these and other problems, the efforts by a single or several countries are far from adequate," he added.
"Only by building extensive partnerships where all will think and work in unison, can we expect to achieve positive results.”
Unlike the Asian Infrastructure Investment Bank, which will not be operational until the end of next year, the Silk Road Fund can be effective immediately, according to Yao Zhizhong, deputy head of the Institute of World Economics and Politics.
Xi cautioned that connectivity is "not merely about building roads and bridges or making linear connection of different places on surface.
"More importantly, it should be a three-way combination of infrastructure, institutions and people-to-people exchanges and a five-way progress in policy communication, infrastructure connectivity, trade link, capital flow and understanding among peoples.”
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