China to establish $52 billion Silk Road infrastructure fund

China's President Xi Jinping speaks at the Dialogue On Strengthening Connectivity Partnership at the Diaoyutai State Guesthouse in Beijing on Nov 8, 2014 . -- PHOTO: REUTERS
China's President Xi Jinping speaks at the Dialogue On Strengthening Connectivity Partnership at the Diaoyutai State Guesthouse in Beijing on Nov 8, 2014 . -- PHOTO: REUTERS

BEIJING (REUTERS) - China will contribute US$40 billion (S$52 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 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.

Last month, Xi unveiled the US$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.