Xi Opens APEC Summit by
Presenting the Scope of China's
Investments for Development
Nov. 10, 2014 (EIRNS)At the start of an Asia-Pacific Economic Cooperation (APEC) summit, which has clearly been dominated by China's economic growth and development strategies, President Xi Jinping discussed the scope of China's ongoing and planned investments in developing the rest of the world.
Chinese offshore investment will reach $1.25 trillion by the end of this decade, announced Xi in his Nov. 9 opening speech as host of the summit. At the same time, according to the Financial Times, he unveiled a $40 billion contribution to a new China-initiated "Silk Road Fund" separate from the new Asian Intrastructure Investment Bank (AIIB). The Silk Road Fund is intended to invest in infrastructure for "connectivity" (rail, roads, power lines, pipelines, communications) along the land-bridge corridors across Eurasia and to the Mediterranean.
Xi, again as his speech is reported in the Financial Times, said the fund would be open to participation from other countries and investors, and would invest in infrastructure and natural resource development as well as financial and industrial cooperation between countries from China to Europe.
China has become a net exporter of capital, and the $1.25 trillion "outbound direct investment" by 2020 represents a tripling of existing Chinese activity.
The Chinese government maintains controls on both the export and import of capitalin order to defend itself from flows of "hot money" originating with U.S. and Japanese central bank money-printing. It also does not want to allow China's huge internal savings to become outward-bound "hot money" washing over the international financial system. But through the use of multiple, multilateral development banks, China will be able to invest larger and larger amounts of capital abroad in infrastructure, including attracting Chinese domestic savings into this process.