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China dangles $40 bn fund to push Silk Road infrastructure plan

08 November 2014

China has pledged $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, in a bid to ensure its continued economic growth.

President Xi Jinping President Xi Jinping also offered financial and trade incentives to countries, mostly in Central and South Asia, for backing efforts to resurrect the old Silk Road trading route that once carried treasures between China and the Mediterranean.

The fund will be for investing in infrastructure, resources and industrial and financial cooperation, among other projects, Xi said, according to Xinhua.

The goal of the fund is to "break the connectivity bottleneck" in Asia, state media quoted Xi as saying during a meeting in Beijing with leaders from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.

The Silk Road Fund will be "open" to investors from Asia and beyond to "actively" take part in the project, Xi was quoted as saying earlier during a summit of the Asia Pacific Economic Cooperation (APEC) grouping, also in Beijing.

It is not clear when and how the fund, which would be based in China, would start operating and what precisely it would fund.

Xinhua said it would focus on China's Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, which aim to build roads, railways, ports and airports across Central Asia and South Asia.

"Such a framework accommodates the needs of various countries and covers both land and sea-related projects," Xi said, adding China is ready to welcome its neighbours "to get on board the train of China's development."

In fact, Xi has been asking Bangladesh to push the building of an economic corridor linking Bangladesh, China, India and Myanmar.

China will also provide neighbouring countries with 20,000 places for training "connectivity professionals" over the next five years, Xi said.

China, meanwhile, sought to address fears that its aggressive economic growth also inevitably brings about a more assertive, diplomatic and military approach to issues such as territorial disputes.

The moves comes after China last month unveiled a $50-billion China-backed Asian Infrastructure Investment Bank, seen as a challenge to multilateral lenders such as the World Bank and the Asian Development Bank.

Xi had invited Prime Minister Narendra Modi to attend the summit during their first meeting in Brazil. Modi, however, could not make it to the summit due to his commitments to attend next week's East Asia Summit in Myanmar and the G-20 leaders meeting in Australia.

Modi, however, is expected to meet Chinese leaders on the sidelines of these meetings.

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