Investments from China’s state-owned enterprises (SOEs) into “One Belt, One Road” (OBOR) related projects reached US$10.7 billion in the first eight months of this year, up from $7.25 billion for the corresponding period a year earlier, or an increase of 48%, a report from China Securities Journal revealed.
At the heart of OBOR lies the creation of an economic land belt that includes countries on the original Silk Road through Central Asia, West Asia, the Middle East and Europe, as well as a maritime road that links China’s port facilities with the African coast, pushing up through the Suez Canal into the Mediterranean. It is estimated the entire route covers a population of approximately 4.4 billion and 26 countries and regions.
The project aims to redirect the China’s domestic overcapacity and capital for regional infrastructure development to improve trade and relations with ASEAN, Central Asian and European countries.
A spokesperson from the Mainland’s Ministry of Commerce told local media that so far, Chinese SOEs have mainly invested in projects located in Singapore, Indonesia, Russia, Thailand and Laos. Between January and August, the country’s SOEs had secured outsourcing contracts worth $9.3 billion altogether, a 27.9% rise year-on-year, the newspaper report said.
Meanwhile, in the first eight months of 2015, a total of 244 new foreign enterprises set up operations in Silk Road countries with a view to investing in China – up from 160 for the same period a year earlier. According to the report, these enterprises have so far invested $360 million in various industries in China, including telecommunications, software, and electricity generation. Regionally, the foreign investments were mainly sourced from Singapore, Malaysia, Brunei, and Saudi Arabia.
To spearhead this ambitious initiative, China announced it was establishing a $40 billion Silk Road Infrastructure Fund last November. The fund is is mainly comprised of foreign exchange reserves, and contributions from the China Investment Corporation, the Export-Import Bank of China, and the China Development Bank.