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Silk Road Fund sustainable, 100 billion RMB funding not aimed at buying influence

(People's Daily Online)    16:08, May 15, 2017

Investment in the Silk Road Fund is sustainable, and China is not using capital injection as a means of buying influence in the global arena, said a senior official of China’s central bank on Sunday.

The remarks were made on May 14 by Yi Gang, deputy governor of the People’s Bank of China (PBOC), after Chinese President Xi Jinping promised that the country will contribute an additional 100 billion RMB to the Silk Road Fund. The decision has elicited a mixed reaction from the public. Under the hashtag “FocusOnBeltAndRoad," which had garnered over 6 billion page views on Sina Weibo as of press time, many netizens commented that the move will stimulate China’s economy. At the same time, others worried about the profitability of the investment, speculating that the government may be making a reckless bet.

In response to public concern, Yi said that the fund currently has a large reserve of projects, and the demand for funds will be greater in the future.

“We must bear in mind that the Silk Road Fund is an investment fund. It is not unidirectional financial support or a surrender of profits. Our investment will see commercial returns and is sustainable,” Yi told the Xinhua News Agency during an interview.

According to Yi, the capital injection will help the fund to be maximally flexible and efficient, and more funding will also boost its leveraging role.

By the end of the first quarter of 2017, 15 programs had been signed under the Silk Road Fund, with a total investment of $6 billion. The programs cover various countries and regions along the "Belt and Road" route, including Russia, Mongolia, Central Asia, South Asia, Southeast Asia, West Asia, North Africa and Europe.

“It is very necessary to increase the capital of the Silk Road Fund at the current stage,” Yi emphasized.

To provide more funding for "Belt and Road" cooperation, China will also encourage financial institutions to conduct overseas business using RMB at an estimated level of about 300 billion RMB, Xinhua reported.

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

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