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China is proposing to create a financial firm to fund projects in central and eastern Europe, Premier Li Keqiang said yesterday, extending the nation's global reach as it flexes its economic muscles.
Beijing scored a major diplomatic success earlier this year when it set up the Asian Infrastructure Investment Bank, with key European countries signing up over objections from Washington.
Shanghai is also home to a new multilateral bank dedicated to the emerging BRICS countries of Brazil, Russia, India, China and South Africa, which is expected to go into operation soon.
Li told officials from 16 central and eastern European countries gathered for a regional summit in Suzhou that Beijing was "ready to work with all parties to explore the possibility of setting up a 16+1 financial company to support cooperation".
Li dangled the offer of cheap Chinese funds from both the government and commercial banks to the area, which has lagged behind more prosperous nations in the western part of the continent.
"We can provide financing for central and eastern European countries in line with your needs," state television showed him saying.
"As long as these projects use Chinese products and Chinese equipment, China is willing to provide low-cost financing support."
The country's biggest lender, Industrial and Commercial Bank of China, and the government policy-directed China Export Import Bank, which serves as an export credit agency, would spearhead efforts to boost lending, Li said.
But he played down the possibility of competition with other multilateral organisations, such as the European Bank for Reconstruction and Development, saying Chinese financial institutions were encouraged to "strengthen exchanges and cooperation".
China also signed separate deals with Hungary and Serbia yesterday on construction and revamping of a rail link between the Serbian and Hungarian capitals.
Details of the two deals made on the sidelines of an annual summit meeting between Chinese and central and eastern European leaders were not immediately available, but Li pledged earlier in the day that construction of the railway would be underway by the end of this year and be finished within two years, Xinhua reported.


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China formally applied to join the London-based lender after President Xi Jinping visited the UK last month. Photo: SCMP Pictures

President Xi Jinping, front centre, at a meeting of Asian Infrastructure Investment Bank delegates last year. Photo: SCMP Pictures

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President Xi Jinping (centre) with other leaders at the launch ceremony of the Asian Infrastructure Investment Bank last October in Beijing. Photo: Reuters

China's new 'One Belt, One Road' development strategy was launched in 2013 after President Xi Jinping called for a revival of the 2,000-year-old land-based Silk Road and a maritime silk route. Graphic: SCMP

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President Xi Jinping (right) with Sweden's Prime Minister Stefan Lofven. Sweden is one of the founding members of the AIIB. Photo: Xinhua

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epa05018878 Workers sort out parcels at a sorting center of an express delivery company, one day ahead online shopping festival in Beijing, China, 10 November 2015. The upcoming Singles' Day online shopping festival in China will fall on 11 November, when more than 760 million parcels are expected to be handled during the online shopping spree from 11 to 16 November, according to the State Post Bureau. EPA/WU HONG

A man walks past an advertisement promoting China's renminbi (RMB) or yuan, U.S. dollar and Euro exchange services at foreign exchange store in Hong Kong, China, August 13, 2015. German Bund yields edged up on Thursday following efforts by China's central bank to slow a sharp descent of the yuan that has prompted investors this week to seek safe-haven assets. REUTERS/Tyrone Siu

(FILES) In this photograph taken on July 10, 2008, a Chinese soldier (L) and an Indian soldier stand guard at the Chinese side of the ancient Nathu La border crossing between India and China. India's foreign minister announced plans on April 25, 2013, to visit China amid a border dispute, saying both countries had a mutual interest in not allowing it to "destroy" long-term progress in ties. According to officials in New Delhi, a platoon of Chinese troops set up a camp inside Indian territory on April 15, 2013. India has since called on the Chinese soldiers to withdraw, but several meetings between local army commanders and diplomats from both sides have failed to resolve the stand-off. AFP PHOTO/ Diptendu DUTTA/ FILES

A worker measures a newly-made steel block at a factory of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province, China, October 13, 2015. China's economic growth is expected to fall below 7 percent for the first time since the global financial crisis in the third quarter, putting pressure on policymakers to roll out more support measures as fears of a sharper slowdown spook investors. Picture taken October 13, 2015. REUTERS/China Daily CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA. TPX IMAGES OF THE DAY.

Rise of Asian Infrastructure Investment Bank and New Development Bank reinforces need for World Bank/IMF reform

IMF managing director Christine Lagarde shakes hands with UN secretary general Ban Ki-moon in Lima. Photo: AP

Activists from civil society groups and unions take part in a protest against the IMF/World Bank meetings in Lima, Peru. Photo: EPA

World Bank president Jim Yong Kim delivers a speech at the World Bank/IMF meetings in Lima. Photo: Xinhua 

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