AIIB, Belt and Road will spur global growth in a challenging 2016, Asian Financial Forum told

The newly launched $100-billion Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative - two ambitious projects spearheaded by the nation - will provide the impetus for global economic growth in a likely challenging 2016.

The optimism was shared on Monday by top officials from the mainland and Hong Kong, as well as European and Asian ministers and businessmen at this year's Asian Financial Forum (AFF) in Hong Kong.

Amid the current geopolitical unrest, volatile financial markets, slumping commodity prices and faltering growth in China and in Asia, "it remains a challenge for the world to have a sustainable economic recovery," said Vincent Lo Hong-sui, chairman of the Hong Kong Trade Development Council.

However, the Chinese mainland and Asia still prove to be the most powerful growth engines for the world economy, albeit at a slower pace, with the high-profile AIIB and Belt and Road projects serving as "another key driver", he said.

The AIIB, which was formally set up in December last year with 57 members, including major economies such as India and Russia, officially opened for business on Saturday.

With an authorized capital of $100 billion, the new multilateral financial institution is expected to loan out between $10 billion and $15 billion annually in the first five or six years. And China, by far the largest AIIB shareholder with a voting share of 26.06 percent, will invest an additional $50 billion in the bank.

Vice-Minister of Foreign Affairs Liu Zhenmin told the forum the Beijing-based AIIB, which aims to make and facilitate investments in infrastructure projects across the region and the globe, will give Asian and global economies a fresh boost.

Liu emphasized that the AIIB and the Belt and Road Initiative do not have any conflict of interest with the US-led World Bank, the Japan-led Asian Development Bank, the International Monetary Fund or the Trans-Pacific Partnership trade agreement.

European and Asian ministers attending the forum are pinning high hopes on China's much-discussed initiatives.

Russia - the third largest AIIB shareholder after China and India - would like the new bank and the Belt and Road project to vitalize the whole region's economies. Banking on the brand-new financial institution and its institutional establishment, Russia expects to brace itself for a new round of development, Russian Deputy Prime Minister Arkady Dvorkovich said at the forum.

"Hopefully, we'll have the first loans meted out within six months," he said.

Kiatchai Sophastienphong - Thailand's vice-minister for finance - reiterated his confidence in the two initiatives. As China is actively working on promoting the AIIB's status, he believed it will directly help a good many multilateral and simultaneous projects fall to the ground.

In his opening address at the AFF, Chief Executive Leung Chun-ying noted that the AIIB, 40 percent of whose members come from the G20 countries and 60 percent hailing from Asia, will undoubtedly have a tremendous impact on, and spell a world of opportunities for, regional and global economies.

As a world-renowned financial hub in Asia, Hong Kong will continue to polish its brand as a "super-connector" in the region and seek to play a bigger part in the initiatives, he said.

Speaking on the sidelines of the forum, Victor Vekselberg, president of Skolkovo Foundation and chairman of Renova Group, said he appreciated the exchange and trade agreements signed between Russia and Hong Kong, which give Russian companies more opportunities and access to the broad Asian markets.

Anticipating stronger cooperation between Russia and the SAR, Vekselberg noted the city could strengthen its role as a link between Russia and Asian markets, of which China comes first. Dvorkovich told the forum that Russia and Hong Kong will start talks very soon on a free trade deal.

sophia@chinadailyhk.com

Chief Executive Leung Chun-ying told the Asian Financial Forum in his opening speech on Monday that the Asian Infrastructure Investment Bank will have a tremendous impact on, and spell a world of opportunities for, regional and global economies. Parker Zheng / China Daily

(HK Edition 01/19/2016 page8)