Published on : Jun 16, 2015
According to the reports, the new infrastructure fund by Europe would witness China promising investment worth multi-billion dollar at a summit in Brussels on June 29. The move is being seen as China’s diplomatic initiative to win European support. It is no longer behind the closed doors that China is looking beyond the United States while shaping global economic governance. The exact amount of China’s investment in Europe’s infrastructure fund is yet to be decided, but an EU diplomat has revealed that the investment would be in billions. This investment announcement by China closely follows the decision taken by the major governments in the European Union to join the Asian Infrastructure Investment Bank (AIIB) which is led by China.
China’s move is expected to come with a request for return investment in its “One Belt, One Road” initiative, which will see construction of major communications and energy links across West, Central, and South Asia. According to the reports, the banks in China are looking mainly at technology and telecom projects.
The summit in Brussels will be attended by Chinese Premier Li Keqiang, who has agreed with the EU leaders that the fund worth 315 billion euro will open opportunities for China to invest in innovation and infrastructure sectors in the EU. If finalized, the deal would be termed as a success for Jean-Claude Juncker, the president of European Commission. Last year, he had faced criticism on proposing the European Fund for Strategic Investment (EFSI) as EU governments are investing less in the fund. Italy, Poland, Germany, and France have announced about their contribution of 8 billion euros towards the fund while Luxembourg and Spain have announced lesser contributions. However, the huge investment pledged by China will raise questions about the governance of the fund, which has so far been a European affair.