Facebook Twitter 新浪微博 Instagram YouTube Thursday, May 11, 2017

Risks on Belt &Road loans controllable

(Xinhua)    21:00, May 11, 2017

BEIJING, May 11 (Xinhua) -- Chinese loans to countries and regions along the Belt and Road will not add to local debt burden, while risks rising from such loans are under control, bank officials said Thursday.

Ding Xiangqun, vice president of China Development Bank (CDB), said at a press conference that the majority of projects supported by the CDB generated sufficient cash flow to pay back the principal and interest.

"It's quite biased to say that our loans add to local debt burden as we choose the projects very carefully, making sure they have economic value," said Ding..

She added that the bank also had strict credit requirements for sovereign loans, making sure the terms on these loans are in line with those required by the International Monetary Fund.

Sun Ping, vice president of the Export-Import Bank of China (China Exim Bank), said the bank has established risk-control mechanisms to evaluate the feasibility of loans based on the upper limit of debt that each country could bear, and widespread defaults on sovereign debts are unlikely.

"With strict measures to mitigate risks, I'm confident that the level of non-performing loans will remain under control," said Sun.

Since the launch of the Belt of Road Initiative in 2013, China Exim Bank has supported more than 1,200 projects related to the initiative, with contracted value surpassing 700 billion yuan (about 101.4 billion U.S. dollars)

By the end of 2016, CDB had given more than 160 billion U.S. dollars of loans to countries along the Belt and Road to support development in industries such as infrastructure and energy resources, according to Ding.

As China steps up financial support for the Belt and Road Initiative, Chinese financial institutions are also increasing their global presence.

A China-proposed association to promote financial cooperation among Asian countries and regions will be established soon, according to Pan Guangwei, vice head of the China Banking Association.

The China Banking Association will take the lead in the establishment of such an institution, Pan said at the press conference.

An Asian financial cooperation association was proposed by Chinese Premier Li Keqiang at the 2016 Boao Forum for Asia, with the aim to improve markets and prevent financial turmoil.

By the end of 2016, nine Chinese-funded banks have set up 62 direct branches and representative offices in 26 countries along the Belt and Road, offering tailored services to local clients, according to Pan.

At the same time, 54 commercial banks from 20 countries and regions along the Belt and Road have established branches, finance companies, or representative offices in China, seeking cooperation opportunities rising from the initiative.

While providing financial support to Belt and Road Initiative,Chinese-funded banks are also improving their own global competitiveness, Pan said.

China will host the Belt and Road Forum for International Cooperation in Beijing from May 14 to 15.

More than 1,500 delegates, including officials, academics,entrepreneurs, representatives of financial institutions and media organizations from 130 nations, as well as representatives from more than 70 international organizations, will attend.

The Belt and Road Initiative aims to expand links between Asia, Africa and Europe through billions of dollars in infrastructure investment.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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