China's Silk Road dream falls into place with US$40b fund
Beijing takes a long-term view on returns from investment as it seeks to boost its clout
Beijing has launched its US$40 billion Silk Road infrastructure fund along the lines of a long-term private equity venture to boost businesses in countries and regions along the route, the central bank governor said yesterday.
The announcement serves as a prelude to the publication of a blueprint that sheds light on the country's ambitions to create the New Silk Road economic belt and the 21st-century maritime Silk Road.
People's Bank of China governor Zhou Xiaochuan told China Business News that the fund would be similar to the World Bank's investment arm International Finance Corp and the African Development Bank's mutual development fund.
The funds are financed by a small group of investors rather than raising capital from the public.
This also marks a practical new approach by China to seek better returns on its investments.
Some of its overseas investments, such as those in Venezuela, appeared to have been partly driven by political considerations with analysts openly questioning investments that carried high risks, especially when there was political turbulence in the host countries.