Capital, technology pledged by Chinese investors

Commitments made at Silk Road Forum target infrastructure, energy and innovation in continent funding boost

State and private investors from China pledged to inject fresh capital and technology into Poland and other regions of Europe under the framework of the Belt and Road Initiative, which aims to boost Eurasian connectivity.

They announced their commitments at the two-day annual Silk Road Forum organized by the State Council's Development Research Center and its global partners.

President Xi Jinping addressed the opening of the forum on June 20 during his visit to Serbia, Poland and Uzbekistan.

"China and Poland, similar to other European countries, have faced the same challenges of restructuring economies and developing sustainability, and we are keen on investing in infrastructure, energy saving, high-tech and innovative sectors in Europe," says Jin Qi, chairman of the Beijing-based Silk Road Fund.

The medium and long-term fund was established at the end of 2014, with a first-phase financial injection of $10 billion. Xi has pledged that the total investment will be $40 billion.

China and the European Union are in negotiations to set up a joint fund to connect the Belt and Road Initiative and the EU's 315 billion euro investment program. Jin's fund is expected to become one of Chinese founders of the joint fund, likely to be unveiled at the China-EU leaders meeting next month.

"We're determined to forge synergies of megaprojects between China, the EU and its member states," Jin told the forum, the third one after Madrid last year and Istanbul in 2014.

The forum, on June 20 and 21, involved up to 1,000 representatives from various countries including officials, business leaders and economists, who discussed the standardization of the Eurasian transportation system on land and by sea, innovative ways of finance, global governance and sustainable development, and cooperation between China and Europe at regional levels.

Ding Xuedong, chairman and CEO of China Investment Corp, said at the forum that his company is also ready to fill the financial gap when Poland and other countries in Central and Eastern Europe need funds.

Ding says the 16 countries in the region are expected to need at least $1 trillion in the coming 10 years to improve their infrastructure by building roads, highways, airports and other facilities.

"Facing such a huge amount of capital demand in infrastructure construction alone, investment from the government could not satisfy the needs and the countries need to channel more resources," Ding says, adding that even Western European powers face the challenges of filling the capital gap when upgrading their infrastructure.

"The effective mechanism is to pool the resources from governments, policy loan vehicles, investment funds and private sectors."

Ding adds that Poland and the rest of Europe are investment targets for the state fund.

In addition to Chinese investment giants, private investors have also attached growing importance to Poland and Europe.

Among them is Wu Daohong, chairman of Beijing Shenwu Environment and Energy Technology Co Ltd, who says China's private companies have the advantages of cooperating with European partners in high-tech sectors.

In an interview with China Daily, he says he came with three patent technologies on biomass and clean energy, especially using coal in a cleaner way, and the talks with Polish partners are continuing.

"We're quite sure that our technologies in the coal sector are advancing, and Poland and China, both rich in coal reserves, could have huge opportunities if pollution can be avoided in coal use," Wu says.

Stephen Perry of the 48 Group Club in London says the Belt and Road Initiative, a continuation of China's opening-up drive, will last 20 to 50 years, and one of the key determinants will be the response of the West.

"China wants Western involvement, as we have many of the key advanced technologies, we have funding, and various capabilities in finance and technology and management that this project will require," he says. "If the West invests in this project, we will get large rewards and growth of our own."

fujing@chinadaily.com.cn

(China Daily European Weekly 06/24/2016 page14)