China Investment Corporation Seeking Partners for New Belt and Road Development Bank
April 24, 2019 (EIRNS)—Going into the Second Belt and Road Forum for International Cooperation, the ChinaWatch supplement, sponsored China Daily for publication in various major U.S. newspapers, leads with a report that China’s largest sovereign wealth fund is seeking to create a Belt and Road development bank with international partners. The article, originally run in China Daily on March 18, was highlighted by an April 14 tweet by Schiller Institute President Helga Zepp-LaRouche urging U.S. President Donald Trump to “put it on the agenda.” (See EIR Daily Alert, Monday, April 15, 2019.)
China Investment Corporation (CIC) “is seeking global partners to jointly establish a special cross-border investment instrument that will further finance Belt and Road projects, a senior [CIC] executive said,” according to the China Daily story, “BRI funding in the pipeline.” Tu Guangshao, CIC’s vice-chair and president, is quoted: “We call it the Belt and Road cooperation fund.” The joint venture’s scale and the currency in which it will invest are “too early to be determined,” he said.
China Daily’s description of the methods of operation and governance foreseen for this fund makes it sound like a second Asian Infrastructure Investment Bank (AIIB); but its investment targets will be all Belt and Road cooperating countries, and its “potential shareholders may cover international organizations” as well as countries. Tu says, “The fund will be a new way to inject capital into BRI projects, facilitate international cooperation and share mutual benefits.”
“Through the fund, analysts said, China may convince more global investors to join long-term and high-cost BRI projects such as ports and railways.” The China Daily article states that as BRI construction advances, there is a growing need for third-country financing which China and its banks alone cannot meet.
This is clearly another opening to America among other countries (Japan, Russia, Germany) to get involved in the BRI through public agencies and/or major banks.
In a perhaps similar direction, Xinhua reported April 24 that China Development Bank (CDB) and “seven developmental financial institutions” in Ibero-American countries set up a “multilateral financial cooperation mechanism.” CDB has already offered $100 billion in project loans in 18 countries and regions there. The development funds participating with CDB are in Argentina, Ecuador, Mexico, Peru, Panama and Colombia.