(Reuters) – China will contribute $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the largesse of its own economic growth.
China has dangled financial and trade incentives before, mostly to Central Asia but also to countries in South Asia, 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” and welcome investors from Asia and beyond to “actively” take part in the project, Xi was cited as saying, ahead of a separate summit of the Asia Pacific Economic Cooperation (APEC) grouping, also being held in the Chinese capital.
It was not immediately clear precisely how the fund would work, when it would start operations or where it would be based, though in all likelihood it would be China.
But 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 neighbors “to get on board the train of China’s development.”
China will also provide neighboring countries with 20,000 places for training “connectivity professionals” over the next five years, Xi said.
China has sought to address fears in the region – and globally – that its bounding economic growth will inevitably bring about a more assertive, muscular diplomatic and military approach to issues such as territorial disputes.
One of the ways it has done this is to offer large loans to places like Southeast Asia and Africa, to show that China is a benign growing power only interested in helping others escape poverty in the way it has itself over the past three decades.
Last month, Xi unveiled the $50 billion China-backed Asian Infrastructure Investment Bank, seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.
China has sought to allay concerns that its new bank aims to undermine the World Bank and Asian Development Bank, saying it wants to learn from their experience and that there are more than enough projects around for all the lenders to fund.