China has set up a € 10 billion (HK$86 billion) investment fund to finance projects in Central and Eastern Europe, Industrial and Commercial Bank of China said in a statement issued on Sunday. The China-Central Eastern Europe fund will be run by Sino-CEE Financial Holdings a company established by the bank earlier this year. The company was formally launched by Premier Li Keqiang during a visit to Riga, Latvia on Saturday. Xi Jinping to sign raft of deals during trip to Poland as China seeks closer economic ties with eastern Europe The fund was aiming to raise € 50 billion in project finance for sectors such as infrastructure, hi-tech manufacturing and consumer goods, the bank said. While targeting Central and Eastern Europe (CEE), it could extend to the rest of Europe and other regions, it said. The fund would be government-backed but operate under business principles and be guided by the market, it added. Central and Eastern Europe are part of China’s modern Silk Road, where Beijing is hoping to carve out new export markets for its companies as the domestic economy slows. China’s burgeoning central and eastern Europe ties are useful check on power of US and Russia Vice Commerce Minister Gao Yan said last year that Chinese companies had already invested more than US$5 billion in CEE countries. But China’s push for more investment at the gateway to the European Union comes amid growing calls in Germany to restrict Chinese investment in some sectors. Riga is hosting a summit of leaders from 16 central and eastern European countries and China, a group dubbed 16+1 by Beijing. On Saturday, Li said China would maintain steady growth and speed up economic transformation, and would be able to overcome current challenges, Xinhua reported. ICBC’s push into central, eastern Europe elicits cautious response from China banking regulator official China is trying to rebalance its economy to adapt to slower growth both at home and abroad but policymakers are struggling to contain a range of domestic issues such as surging home prices and rising debt levels. Li said China’s moves to ensure “supply-side structural reform” while appropriately expanding aggregate demand had boosted the domestic economy, and economic restructuring and liberalisation had also generated new areas of growth.