Silk Road Fund and Asian Infrastructure Investment Bank

1、   Silk Road Fund

The Silk Road Fund was established in Beijing on December 29, 2014, following President Xi Jinping’s announcement on November 8 that China would contribute 40 billion US dollars for this purpose.

The Fund follows a philosophy of openness, inclusiveness and mutual benefit, mainly providing investment and financing support for trade and economic cooperation and connectivity under the framework of the Belt and Road Initiative.

The Fund is designed to promote common development and prosperity of China and other countries and regions involved in the Belt and Road Initiative.

The Fund is a medium to long-term development and investment fund. Through a variety of forms of investment and financings, primarily equity investment, the Fund is dedicated to supporting infrastructure, resources and energy development, industrial capacity cooperation and financial cooperation in countries and regions involved in the Belt and Road Initiative to ensure medium and long-term financial sustainability and reasonable returns on investment.

The Fund makes investment decisions based on market principles, international practice and professional standard. The Fund invests in equity, debt and other funds. It can work with international development organisations, financial institutions to jointly set up funds, and also manage entrusted assets and commission others to invest.

The Fund has a total capital of 40 billion US dollars which shall be made in installment. The first installment of 10 billion US dollars is composed of 6.5 billion US dollars contributed by the State Administration of Foreign Exchange of China, 1.5 billion US dollars by China Investment Corporation, 1.5 billion US dollars by Export-Import Bank of China and 500 million US dollars by China Development Bank. In the past four years, the Fund has made 4 billion US dollars of investment.

On May 14, 2017, President Xi Jinping announced at the opening ceremony of the “Belt and Road Forum for International Cooperation” (BRF) that China would scale up financing support for the Belt and Road Initiative by contributing an additional RMB 100 billion (around 14.5 billion US dollars) to the Silk Road Fund.

Since the Fund was established, its management has visited many countries and regions and received visits of important delegations. This has helped relevant countries and regions to have a better understanding of the Belt and Road Initiative and the Fund and has broadened areas for cooperation.

2、   Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is a new multilateral inter-governmental development institution focused on supporting infrastructure development. It is founded on December 25, 2015 with its headquarters in Beijing, China. It aims to bring countries together to address the daunting infrastructure needs.

By furthering interconnectivity and economic development through advancements in infrastructure and other productive sectors, the AIIB can help stimulate growth and improve access to basic services.

The core principles of the AIIB are openness, transparency, independence and accountability and the mode of operating is “Lean, Clean and Green”.

The Bank’s emerging thematic priorities are sustainable infrastructure, cross-country connectivity and private capital mobilisation. It promotes green infrastructure and supports countries to meet their environmental and development goals. It prioritises cross-border infrastructure, ranging from roads and rail, to ports, energy pipelines and telecoms across Central Asia, South East and South Asia, the Middle East, and beyond.

It devises innovative solutions that catalyse private capital, in partnership with other MDBs, governments, private financiers and other partners. In the past four years, the Asian Infrastructure Investment Bank has provided 1.7 billion US dollars of loans for 9 projects in Belt and Road participating countries.

More and more countries and regions show strong interest in the AIIB and seek its membership. By the Belt and Road Forum for International Cooperation held in May 2017, the AIIB’s membership had reached 77, second only to that of the World Bank. Among them, there are China, India, Indonesia, Australia, Russia, Saudi Arabia, Turkey, France, Germany, Italy, Netherlands, United Kingdom, Canada, Brazil, Chile, Peru, Venezuela, Bolivia and etc.

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