During his visits to Central and Southeast Asia in September and October 2013, Chinese President Xi Jinping proposed to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road in cooperation with related countries, drawing much attention from the international community.
On November 8, 2014, President Xi Jinping announced that China would contribute US$40 billion to set up Silk Road Fund at the Asia-Pacific Economic Cooperation Dialogue on Strengthening Connectivity Partnership. On December 29, 2014, the Fund was officially established in Beijing. Setting up the Fund is an important component of the efforts to implement the Belt and Road Initiative.
Honoring the philosophy of openness, inclusiveness and mutual benefit, the Fund is committed to providing investment and financing support to countries and regions joining the Belt and Road Initiative, in order to strengthen their economic and trade cooperation and connectivity with China. In collaboration with domestic and international enterprises and financial institutions, the Fund seeks to promote shared development and prosperity among the BRI regions and countries.
President Xi Jinping announced that China would scale up financing support for the Belt and Road Initiative by contributing another RMB100 billion to Silk Road Fund at the opening ceremony of the Belt and Road Forum for International Cooperation on May 14, 2017. The commitment further enhanced the investment capacity of Silk Road Fund, making the Fund a dual-currency fund. Therefore, the Fund is able to offer financing solutions with flexible currency choices to suit the needs of individual projects and to help enterprises mitigate currency exchange risks. The dual-currency capitalization also allows the Fund to meet the need of investment- recipient countries to diversify the currency composition of their foreign reserves and could facilitate multilateral and bilateral economic and trade cooperation.
Participation in the Belt and Road Initiative provides relevant parties with great opportunities for further development. Countries and regions joining the BRI have a huge demand for infrastructure and industrial capacity cooperation. Cross-border cooperation in these fields could generate lots of job opportunities, fulfilling the aspiration of the international community.
By injecting into target projects much needed medium to long-term equity capital and also adopting diverse investment tools, Silk Road Fund effectively provides credit enhancement to the underlying projects and helps them attract more capital. Such investments will also help destination countries unlock their potentials and achieve green and sustainable development. They will also help produce mutually beneficial results and promote shared prosperity.
