China will contribute $40 billion to its new Silk Road fund designed to improve trade and transport links in Asia, President Xi Jinping announced yesterday.
The goal of the fund is to "break the connectivity bottleneck" in Asia, state media quoted Xi as saying during a neighbourhood summit in Beijing with leaders from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.
The announcement comes on top of a $50 billion Asian Infrastructure Investment Bank (AIIB) that China established last month with 20 other nations.
Xi said this past week that the bank and the new Silk Road fund would help to finance China's plans to develop a “Silk Road Economic Belt” and a “21st Century Maritime Silk Road.”
The “Economic Belt” is a network of highways, railways and other critical infrastructure linking China to Central and South Asia, the Mideast and Europe. The maritime route entails building or expanding ports and industrial parks in Asia, the Mideast, Africa and Europe.
Together, analysts have said, the plans are designed to put China at the centre of Asian trade and transport and secure more opportunities for major Chinese construction and engineering firms, writes The Wall Street Journal.
It was not immediately clear precisely how the fund would work, when it would start operations or where it would be based, though in all likelihood it would be China, reports Reuters.
According to Xinhua, it would focus on China's “Belt and Road” initiative, which aim to build roads, railways, ports and airports across Central and South Asia.
Xi said the new Silk Road fund will be used for providing investment and financing support to carry out infrastructure, resources, industrial cooperation, financial cooperation and other projects related to connectivity for countries along the "Belt and Road".
He added that the fund will be "open" to active participation by investors from both within and outside of Asia.
The summit was organised ahead of tomorrow's meeting of Asia Pacific Economic Cooperation (APEC) leaders in which a host of world leaders including US President Barack Obama, his Russian counterpart Vladimir Putin and Japanese Prime Minister Shinzo Abe are scheduled to take part.
Bangladesh President Abdul Hamid, Pakistan's PM Nawaz Sharif and representatives of the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and the Shanghai Cooperation Organisation (SCO) attended the meet.
Indian PM Narendra Modi was invited too but he could not make it, PTI wrote. Indian officials said Modi could not make it to the summit due to his commitments to attend next week's East Asia summit in Myanmar followed by G-20 meeting in Australia.
AIIB; HAMID-XI TALKS
Xi unveiled the $50 billion China-backed Asian Infrastructure Investment Bank, seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.
China has sought to allay concerns that its new bank aims to undermine the WB and ADB, saying it wants to learn from their experience and that there are more than enough projects around for all the lenders to fund, reports Reuters.
Twenty-first Asian countries -- Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam -- signed the memorandum of understanding last month in Beijing on establishing the bank.
The Chinese president yesterday morning at his meeting with Bangladesh President Abdul Hamid said Bangladesh is welcome to join AIIB as a founding member.
Describing Bangladesh as an important partner of China in South Asia and Indian Ocean region, he said the bilateral relationship features friendship, trust and cooperation.
The two countries must enhance cooperation in trade, agriculture, infrastructure development and maritime industry.
China's vision to build the “Belt and Road” will create chances for both countries. Dhaka and Beijing should work together also to push the building of Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC), XI added.
At the meeting, Hamid said Bangladesh expects to learn from China's experience in poverty alleviation and seize the chance brought by the Silk Road Economic Belt and the 21st Century Maritime Silk Road to promote trade and connectivity.
'ONE BELT, ONE ROAD'
Xi earlier had announced that China will accelerate the construction of the economic belt and the maritime silk road, and strengthen cooperation with the countries involved.
"We should prepare timetables and road maps for the coming years for the 'One Belt and One Road' project," he said while presiding over the eighth meeting of the Central Leading Group on Financial and Economic Affairs on Tuesday.
"We will focus on some significant projects and let the construction of 'One Belt and One Road' commence as soon as possible," he said, adding that the cooperation between China and the countries involved would be mutually beneficial.
China-led “Belt and Road” initiatives could help solve security problems in Asia, said experts at an international forum on Wednesday.
Despite many differences and disputes, China and almost all its neighbouring countries, put economic development as their foremost goal in their policy agenda, using diplomacy to serve this goal, said Yang Xiyu, senior research fellow of China Institute of International Studies.
The two-day forum, which concluded on Wednesday, was held in Xi'an, capital city of northwest China's Shaanxi Province, to mark the International Day of Peace.
Xi'an, home to the well-known terracotta warriors, was where the ancient Silk Road started. An older name of the city, Chang'an, means "lasting stability and peace."
"A simultaneous revival of the Silk Road in different forms would mean not only trade. It could also mean that nations with trade are always going to have a better relationship and peace will automatically come about, because it is opportunity cost," said Siddhant Raj Pandey, member of Board of Directors of the Nepal Institute of International and Strategic Studies.
"If, even after thousands of years, the terra cotta soldiers can be unearthed, then I'm hopeful that the 2,000-year-old Silk Road can be revived and its modern version the maritime Silk Road as well can be developed and made more active and vibrant in the future," he said.
The "One Belt and One Road" initiatives were brought up by Chinese President Xi Jinping last year.
Different from the ancient Silk Road, which mainly focused on trade, the "One Belt and One Road" could also include the flow of financial elements, information, technology and personnel, Xia Liping, dean of the School of Political Science & International Relations with Tongji University.
Xia believes the construction of the new initiatives would help to boost mutual trust among related countries, which will consequently promote the building of security cooperation across all of Asia.