“The fund has already started operations, with registration on Dec 29 and the first board meeting on Jan 6,” Zhou Xiaochuan, the People’s Bank of China (PBoC) governor told the semi-official China Business News yesterday.
The fund was partially financed by China’s foreign exchange reserves, with investors including China Investment Corp, the country’s sovereign fund, the PBoC said in a statement, confirming the news.
Other investors were China’s Development Bank and The Export-Import Bank of China, two leading Chinese policy banks, which lend in line with government instructions, according to the central bank.
China has dangled financial and trade incentives, 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.
Zhou said that the fund is not a state-owned sovereign fund, but was similar to a PE fund, although it planned longer-term investment than other PE funds.
“As for how it will be similar to global funds, it is somewhat like the World Bank’s IFC (International Finance Corp), the African Development Bank’s mutual development fund and the China Africa Development Fund,” Zhou said.
“What is different is that those funds are financed by a handful of investors instead of raising funds from the public.” China has said that the Silk Road Fund will be “open” and welcome investors from Asia and beyond,’’ he said. — Reuters