Chinese President Xi Jinping pledged $40 billion to set up a Silk Road Fund that will finance the construction of infrastructure linking markets across Asia.
The fund’s goal is to “break the connectivity bottleneck” in Asia, the official Xinhua News Agency cited Xi as saying during a meeting with officials from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan. Representatives from the United Nations Economic and Social Commission for Asia and the Pacific and the Shanghai Cooperation Organization were also present, according to Xinhua.
Providing financial support for neighboring nations bolsters China’s push to expand its influence in Asia. Xi first proposed reviving the centuries-old Silk Road trading route a year ago during a visit to Kazakhstan, with the plan envisioning an economic cooperation bloc through to the Mediterranean.
The Silk Road fund will be open and welcome investors from Asia and beyond to actively participate in projects, Xi was cited by Xinhua as saying at the meeting.
China will set aside tens of billions of dollars from its foreign exchange reserves to finance the fund, government officials familiar with the matter said this week. The nation also plans to set aside about 100 billion yuan to build domestic infrastructure that will link up with projects being constructed overseas, according to other government officials familiar with the plan.
The world’s second-largest economy has also promoted the creation of a $50 billion Asian Infrastructure Investment Bank, which would also help finance construction in the region. India, Vietnam, Singapore and Thailand were among 21 nations to sign a memorandum for its establishment last month.
The U.S. has opposed the bank, a potential rival to institutions such as the Asian Development Bank, and has asked its allies not to participate, the New York Times reported.