PBOC official: China increases Silk Road Fund capital to meet enormous demand

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A senior official from China's central bank said on Sunday that the country's decision to contribute an extra 100 billion yuan (about 14.5 billion US dollars) to the Silk Road Fund derives from enormous funding demand.

The capital increment was announced by Chinese President Xi Jinping earlier on Sunday at the opening ceremony of the Belt and Road Forum for International Cooperation.

Chinese President Xi Jinping addresses the opening of the Belt and Road Forum for International Cooperation in Beijing on May 14, 2017. /Xinhua Photo

"It is very necessary to increase the capital of the Silk Road Fund at the current stage," Yi Gang, deputy governor of the People's Bank of China (PBOC), told Xinhua News Agency.

Yi explained the fund has a large reserve of projects and the demand for funding will be greater in the future. He added more capital will also help the fund to play a leveraging role.

The PBOC official stressed the capital boost will not change the market-oriented operating principle of the fund, which will get fair returns on investments while funding Belt and Road construction.

Yi Gang, deputy governor of the People's Bank of China. /VCG Photo

The fund was established in December 2014, and is jointly backed by China's foreign exchange reserves, China Investment Corp., Export-Import Bank of China and China Development Bank.

As of the first quarter this year, the fund had signed 15 project agreements with promised investment amounting to six billion US dollars in aggregate.

The fund has established working contacts with more than 30 countries and regions, and has explored diversified ways of cooperation with international multilateral organizations such as the International Finance Corporation, the European Bank for Reconstruction and Development, the European Investment Bank, and the Asian Infrastructure Investment Bank.

The fund will in the future facilitate the alignment of the China-proposed Belt and Road Initiative with other Belt and Road countries' development strategies, said Yi.

The PBOC official noted the fund will continue to champion the concept of green and sustainable development, incorporating social responsibilities such as environmental protection into its feasibility evaluation and risk management system.

(With inputs from Xinhua)

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