ASEAN top in priority
Published October 16, 2018, 10:00 PM
By Bernie Cahiles-Magkilat
ZHANJIAJIE, CHINA — ASEAN countries, particularly the Philippines, have been targetted as major beneficiaries of the initial $7.2-billion Silk Road Development Fund of the Belt and Road Initiative (BRI), an ambitious investment-led trade link that China aims to reestablish the old trade route connecting Asia, Africa, Middle East and Europe.
Lu Jianzhong, Chairman of Silk Road Chamber of International Commerce, is set to announce today the establishment of the Silkroad Development Fund at the opening of the two-day 2018 Silk Road Business Summit here.
“This fund will serve different Silk Road international chambers all over the world,” said Lu, noting there are now 129 international chambers in 77 countries.
In an interview prior to the opening of the summit, Lu told Filipino journalists that the fund has a seed capital of 50 billion RMB, approximately $7.2 billion, to be implemented over the next seven years.
Already, $1.5 billion would be made available starting next month, November.
According to Lu, ASEAN countries, particularly the Philippines, are expected to become major beneficiaries of the new fund, which creation was only approved in December last year.
There has been no project proposal yet for financing under the newly-established development fund, but Lu said they have already identified initial priority sectors.
In the Philippines, Lu cited tourism, cultural-related, and environmental protection projects.
Lu explained that under the scheme, the private sector can propose projects for financing through their respective local Silk Road chamber. In the Philippines, the local chamber is headed by Francis Chua, who is also chairman emeritus of the Philippine Chamber of Commerce and Industry.
The local Silk Road chamber will either enter into a joint venture with the local project proponent or offer straight financing or loan for the venture.
“We are flexible,” said Lu.
The fund comes from the private sector with a minimum stake from the Chinese government.
“The fund can be unlimited because other international chambers are also interested to invest in,” he said.
“As long as the proposed is good, there will always be funding,” Lu said.
BRI is China’s ambitious program to connect Asia with Africa and Europe via land and maritime networks along six corridors with the aim of improving regional integration, increasing trade and stimulating economic growth.
The name was coined in 2013 by China’s President Xi Jinping, who drew inspiration from the concept of the Silk Road established during the Han Dynasty 2,000 years ago – an ancient network of trade routes that connected China to the Mediterranean via Eurasia for centuries.
The BRI comprises a Silk Road Economic Belt – a trans-continental passage that links China with south east Asia, south Asia, Central Asia, Russia and Europe by land – and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe.
The initiative defines five major priorities: policy coordination; infrastructure connectivity; unimpeded trade; financial integration; and connecting people.
The program is expected to involve over US$1 trillion in investments, largely in infrastructure development for ports, roads, railways and airports, as well as power plants and telecommunications networks.