Over the past couple of months, China has played a major role in launching initiatives to increase infrastructure financing for developing countries. In July 2014, China, together with the other BRICS nations – Brazil, Russia, India and South Africa – agreed to create a new development bank (NDB) that would have initial capital of 50 billion USD.
More recently, in October, 21 Asian countries agreed to establish a new Asian Infrastructure Investment Bank (AIIB) for which China will provide up to 50 percent of initial capital. The bank’s aim is to provide funding for infrastructure projects such as roads in underdeveloped Asian countries. Just last week, at the APEC Leaders Summit in Beijing, President Xi also announced the creation of a new Silk Road Fund to improve connectivity in Asia, for which China will provide USD 40 billion of capital funding.
While the initiatives have been criticized by some as a way for China to simply challenge Western-backed institutions such as the World Bank or International Monetary Fund (IMF) – as a result of Beijing’s growing discontent with these bodies – there are others who believe the new development banks might have a positive impact on emerging economies.
Comments are closed.