BEIJING - Chinese President Xi Jinping has pledged $40 billion to set up a ‘Silk Road Fund’ that will finance the construction of infrastructure linking markets across Asia.
The fund’s goal is to ‘break the connectivity bottleneck’ in Asia, the official Xinhua News Agency cited Xi as saying during a meeting with officials from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.
Representatives from the US Economic and Social Commission for Asia and the Pacific and the Shanghai Cooperation Organization were also present, according to Xinhua. Providing financial support for neighbouring countries bolsters China’s push to expand its influence in Asia. Xi first proposed reviving the centuries-old Silk Road trading route a year ago during a visit to Kazakhstan, with the plan envisioning an economic cooperation bloc through to the Mediterranean.
The Silk Road fund will be open and welcome investors from Asia and beyond to actively participate in projects, Xi was cited by Xinhua as saying at the meeting. China will set aside tens of billions of dollars from its $4 trillion in foreign-exchange reserves to finance the fund, government officials familiar with the matter said this week. The country also plans to set aside about 100 billion yuan to build domestic infrastructure that will link up with projects being constructed overseas, according to other government officials familiar with the plan.
The world’s second-largest economy has also promoted the creation of a $50 billion Asian Infrastructure Investment Bank, which would also help finance construction in the region. India, Vietnam, Singapore and Thailand were among 21 countries to sign a memorandum for its establishment last month. The US has opposed the bank, a potential rival to institutions such as the Asian Development Bank, and has asked its allies not to participate, the New York Times reported.
Moreover, countries of Asia and the Pacific region have agreed to set up a network to share information on corruption. Apec members said in a statement that the purpose of the agreement, proposed by China, was to deny safe haven to anyone engaged in corruption.
It comes amid efforts by Chinese President Xi Jinping to clamp down on corrupt officials, including those who try to escape abroad. Apec leaders are expected to back the deal at a summit in Beijing next week. US Secretary of State John Kerry hailed the move as a ‘major step forward’. ‘Corruption not only creates an unfair playing field, it not only distorts economic relationships, but corruption also steals from the people of every country the belief that the system can work for everybody,’ he told journalists. The Asia Pacific Economic Cooperation (Apec) group statement said it had set up the Network of Anti-Corruption Authorities and Law Enforcement Agencies (ACT-NET).
The network commits its 21 member states to ‘deny safe haven to those engaged in corruption, including through extradition, mutual legal assistance and the recovery and return of proceeds of corruption’. It will also ‘establish measures and systems to protect whistleblowers’. Officials say that the proposal was initiated by China and backed by the US. But correspondents say it is not clear how the agreement will work between countries that do not have bilateral extradition treaties.
The US, Canada and Australia - all seen as friendly to Chinese emigrants - have no extradition treaties with China because of concerns about capital punishment and the alleged use of torture in the Chinese judicial system. China is currently involved in a huge campaign to root out corruption at all levels of society. More than 13,000 Chinese officials were found guilty of corruption and bribery in the first nine months of 2014 alone. This year saw the launch of Operation Fox Hunt, widening the scope of the campaign to include officials who have fled abroad.
President Xi has warned that the campaign would target both ‘tigers’ and ‘flies’, indicating that no-one, even senior party members, was exempt from the crackdown. Since he came to power, some of China’s biggest political heavyweights, including the vice-chairman of China’s parliament and the former security chief have been targeted.