Wednesday, November 5, 2014
China to spend $16.3B on new Silk Road infrastructure
As China’s President Xi Jinping continues his plans to revive the centuries-old Silk Road trading route, the nation is planning a $16.3 billion fund to finance construction of the necessary infrastructure to connect its markets to three continents.
The fund will be used to build and expand railways, roads and pipelines in Chinese provinces to facilitate trade over land and shipping routes, according to government officials who helped create the plan.
Officials who asked not to be named said that policies would soon be implemented to encourage Chinese lenders to finance infrastructure in countries along the route connecting China to Europe. They said Chinese companies would also be encouraged to invest in the countries and bid for contracts.
The New Silk Road plan envisions an economic cooperation bloc through to the Mediterranean that involves maritime and land routes that will revive the old Silk Road, where trade helped develop civilizations along the route.
"Previously, China focused on attracting foreign investment, but now the shift is being made -- China’s more and more encouraging its capital to go abroad," said Feng Yujun, senior researcher at the China Institutes of Contemporary International Relations in Beijing.
Xi is trying to shape China as a great power, restoring its maritime dominance in the Asia-Pacific and extending its political and economic influence across the region, which has manifested itself in territorial spats.
The fund will finance domestic infrastructure construction and will be overseen by Chinese policy banks including China Development Bank, officials said. They also said that financing will be limited to regions outlined in the Silk Road plan: Central Asia, the Middle East, South Asia, Southeast Asia and parts of Europe.
For more of the Bloomberg story: www.bloomberg.com
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