China hopes that its Silk Road initiative worth USD 40 billion aimed at building Asian infrastructure can be further levaraged with private investment to the tune of USD 8 trillion.
“Chinese President Xi Jinping has pledged USD 40 billion last month to finance his pet projects ‘One Belt and One Road’ referring to the Silk Road economic belt and the 21st century Maritime Silk Road. The fund serves as a driving force for China and the construction of basic infrastructure is vital in the strategy,” an article in state run Global Times said.
“This long-term project needs cooperative financing provided by the government and different commercial institutions such as banks. It is predicted that across the Asia-Pacific region, around USD 8 trillion will be committed to infrastructure projects over the next decade,” it said.
Through innovative financing such as bonds, concepts stock and public placement, the USD 40 billion of Silk Road Fund can be leveraged into a much greater amount, the article said.
“Under such circumstances, it is necessary to get private capital involved, making it the highlight of this Chinese initiative,” it said.
Through this fund, China’s excess capacity and private capital can go overseas, paving the way for the country’s development strategy of moving beyond its own borders, read the article.
China hopes that the Silk Road fund coupled with USD 50 billion of Asia Infrastructure and BRICS Bank would be a catalyst for its Silk Road initiative which connects the nation with Europe through a maze of routes from Central and South Asia.