The new Silk Road fund may not be as historic as the ancient trade route, but its grand ambition is nevertheless reflected in its name. Seeded with US$40 billion, the Beijing-backed fund aims to boost economic and trade ties with countries in Central and South Asia.
It’s part of the so-called “one belt, one road” policy. The economic belt will improve transport links to China’s neighbours in Central Asia; the “road” will be the 21st century maritime “Silk Road”, an idea put forward by President Xi Jinping in 2013 to expand trade ties with Southeast Asia.
This will involve funding to build roads, railways and airports in friendly countries. Besides infrastructure construction, exploration of natural resources, industrial cooperation and financial services will be part of a multilateral project aiming eventually to cover 60 per cent of the world’s population.
Given Beijing’s ambition, Hong Kong is right to want a bite of the cherry. That’s why finance chief John Tsang Chun-wah has urged Hong Kong’s manufacturers in the Pearl River Delta and the city’s financial services companies to start looking for fresh opportunities in the new trade strategy.
If successful, a new trade bloc in Central and South Asia may grow to rival the Atlantic trade between North America and the European Union. This is clearly China’s moment to assert its influence across Asia.
In this context, the Silk Road fund is comparable to the New Development Bank, formerly called the Brics Development Bank. As a multilateral development bank operated by the Brics nations of Brazil, Russia, India, China and South Africa, it aims to work as an alternative to the US-dominated World Bank and International Monetary Fund.
As new sources of alternative funding and trade outside the Western-dominated system, Beijing’s series of initiatives should be welcome to many developing countries. (SCMP)