China’s $40b Silk Road infrastructure fund goes to work

In November, president Xi Jinping announced the creation of the $40 billion Silk Road Fund, which will mainly invest in infrastructure, energy and resources, as well as industrial and financial sectors.

The fund seeks investment opportunities throughout the Belt and Road Initiative. The Belt and Road refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative proposed by China in 2013, which aims to build roads, railways, ports and airports across countries in Asia, Europe and Africa.

The fund has already started operations, with registration on December 29, the People Bank of China (PBoC) said in a statement. Xiaochuan Zhou, governor of the PBoC, told local press China Business News that the fund isn't a state-owned sovereign wealth fund, but was similar to a private equity fund, although it planned a longer investment horizon than other PE funds.

"It's somewhat like the World Bank's International Finance Corp., the African Development Bank's mutual development fund and the China Africa Development Fund," Zhou said. "What's different is that those funds are financed by a handful of investors instead of raising funds from the public."

The fund, which already raised $10 billion in the first phase of fundraising, was partially financed by China's foreign exchange reserves. Other investors included China Investment Corp. (CIC), and two leading Chinese policy banks - China's Development Bank and The Export-Import Bank of China, the statement noted.

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• Topics
• Greater China
• Fundraising
• Infrastructure
• China
• CIC
• Fundraising
• Infrastructure