World

Xi pledges $174 billion for Silk Road plan

Chinese president opens Belt and Road forum

BEIJING: Chinese President Xi Jinping pledged US$124 billion (S$174 billion) yesterday for his ambitious new Silk Road plan to forge a path of peace, inclusiveness and free trade.

He called for the abandonment of old models based on rivalry and diplomatic power games.

Mr Xi used a summit on the initiative, attended by leaders and top officials from around the world, to bolster China's global leadership ambitions as US President Donald Trump promotes "America First" and questions existing global free trade deals.

"We should build an open platform of cooperation and uphold and grow an open world economy," he told the opening of the two-day gathering in Beijing.

China has touted what it formally calls the Belt and Road initiative as a new way to boost global development since Mr Xi unveiled the plan in 2013.

It aims to expand links between Asia, Africa, Europe and beyond, underpinned by billions of dollars in infrastructure investment.

Mr Xi said the world must create conditions that promote open development and encourage the building of systems of "fair, reasonable and transparent global trade and investment rules".

He pledged a major funding boost to the new Silk Road, including an extra 100 billion yuan (S$20 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in nations along the new trade routes.

In addition, Mr Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of 300 billion yuan.

He did not give a time frame for the new loans, aid and funding pledged yesterday.

Leaders from 29 countries, as well as the heads of the United Nations, International Monetary Fund and World Bank, are attending the forum.

Britain's finance minister told the summit his country was a "natural partner" in the new Silk Road, while the prime minister of Pakistan, Mr Nawaz Sharif, a close Chinese ally, praised China's"vision and ingenuity". The initiative spans some 65 countries representing 60 per cent of the world population and around a third of global gross domestic product.

But some Western diplomats have expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally.

They are also concerned about transparency and access for foreign firms to the scheme.

Mr Xi said the new Silk Road would be open to all, including Africa and the Americas, which are not situated on the traditional Silk Road.

At the forum, finance ministries from 27 countries including China approved a set of principles that will guide project financing along the new Silk Road.

Germany, which was not among the countries that approved the financing guidelines, said its firms are willing to support the Belt and Road initiative, but more transparency is needed.

Some of China's most reliable allies and partners are at the forum, including Russian President Vladimir Putin, Cambodian Prime Minister Hun Sen and Kazakh President Nursultan Nazarbayev. - REUTERS

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