China pledges USD124 bln for new Silk Road infrastructure plan

china lantern

May 15, 2017 (LBO) – Chinese President Xi Jinping pledged 124 billion dollars in government investments and loans on Sunday for his new Silk Road plan and called for the abandonment of old development models based on rivalry and diplomatic power games, Reuters reported.

Xi used a summit on the initiative, attended by leaders from around the world, to bolster China’s global leadership ambitions as U.S. President Donald Trump promotes “America First” and questions existing global free trade deals.

“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi told the opening of the two-day gathering in Beijing.

Xi unveiled the “Belt and Road” initiative in 2013 to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment.

He pledged a major funding boost to the new Silk Road, including an extra 100 billion yuan ($14.50 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in countries along the new trade routes.

In addition, Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of 300 billion yuan, without giving a time frame.

Britain’s finance minister told the summit his country was a “natural partner” in the new Silk Road, while the prime minister of Pakistan, Nawaz Sharif, a close Chinese ally, praised China’s “vision and ingenuity”.

“Such a broad sweep and scale of interlocking economic partnerships and investments is unprecedented in history,” Sharif said.

White House adviser Matt Pottinger said the United States welcomed efforts by China to promote infrastructure connectivity as part of its Belt and Road initiative, and U.S. companies could offer top value services.

India refused to send an official delegation to Beijing, reflecting displeasure with China for developing a $57 billion trade corridor through Pakistan that also crosses the disputed territory of Kashmir.

China plans to import $2 trillion of products from countries participating in its Belt and Road initiative over the next five years.

Australian Trade Minister Steven Ciobo said Canberra was receptive to exploring commercial opportunities China’s new Silk Road presented, but any decisions would remain incumbent on national interest.

“China is willing to share its development experience with all countries,” Xi said. “We will not interfere in other countries’ internal affairs. We will not export our system of society and development model, and even more will not impose our views on others.”

“In advancing the Belt and Road, we will not re-tread the old path of games between foes. Instead we will create a new model of cooperation and mutual benefit,” Xi said.

Xi said the new Silk Road would be open to all, including Africa and the Americas, which are not situated on the traditional Silk Road.

“No matter if they are from Asia and Europe, or Africa or the Americas, they are all cooperative partners in building the Belt and Road.”

At the forum, finance ministries from 27 countries, including China, approved a set of principles that will guide project financing along the new Silk Road.

Germany, which was not among the countries that approved the financing guidelines, said its firms were willing to support the Belt and Road initiative, but more transparency was needed.