US$70 billion plan to export China’s spare industrial capacity
Two-pronged scheme sees US$30 billion fund for industrial joint ventures overseas backed by US$40 billion sovereign wealth fund initiative
Beijing will set aside US$70 billion in capital for international ventures by Chinese enterprises as the country steps up infrastructure investment abroad amid an economic downturn and production over capacity.
Premier Li Keqiang announced yesterday during his visit to Brazil there would be a US$30 billion fund for promoting international cooperation in ventures that export China’s industrial capacity. In addition, China’s sovereign wealth fund, China Investment Corporation, would set up an overseas investment vehicle with a capitalisation possibly greater than the US$40 billion Silk Road Fund to support the strategy.
Li said the US$30 billion fund would be open to cooperation projects with no political strings attached. He said Chinese enterprises were willing to participate in railway construction, high-voltage electrical power transmission, internet technology and next-generation mobile telecommunications technology, Xinhua reported.
Watch: China and Brazil unveil multibillion trade and investment deals
In a separate development, Gu Dawei, director of foreign capital utilisation at the National Development and Reform 8CommissionÖ, said yesterday that a proposal to establish a CIC subsidiary focused on direct investment in overseas equity had been approved. “The company has 8already been set up and started initial operations, adopting a 8series of measures to support enterprises [in overseas ventures],” Gu was quoted as saying.
The State Council had on Saturday released a guideline on boosting international cooperation on exporting China’s industrial capacity and equipment manufacturing. This highlighted that “international cooperation is critical for China to sustain medium-to-high GDP expansion as sales of industrial capacity will foster new growth areas”.
