Conferees like Asia investment bank idea
China’s proposal for a multilateral bank to develop infrastructure projects in Asia received a “positive response” as the country called for a group of projects to boost regional connectivity, a senior official said on Thursday.
“We are collecting feedback on the proposed Asia Infrastructure Investment Bank. We received a good response from many Asian countries,” Zhang Xiangchen, China’s assistant minister of commerce, told China Daily during the 5th International Infrastructure Investment and Construction Forum, which is being held in Macao from Thursday to Friday.
Zhang added that China will actively advance the establishment of the bank, which should have “a very big influence on regional connectivity as financing is the most prominent bottleneck in infrastructure development”, he said.
But participants have not talked about what shares of capital will be injected in the bank, Zhang said.
The bank proposal was put forth by Chinese President Xi Jinping last October and echoed by Premier Li Keqiang during the April Boao Forum for Asia. The FinanceMinistry said inMarch that the bank, with a mandate to fund infrastructure projects in the region, would have capital of $50 billion, paid for by its members.
“Different economies can combine their individual plans with regional connectivity to boost cooperation,” Zhang said.
He also called for innovation in financing to resolve capital shortage in infrastructure development.
“China’s overseas contracting enterprises are facing a period of upgrading from project constructors to service providers, project operators and managers. ... They are facing new challenges such as financing in economies facing lending ceilings. The public-private partnership is a good exploration,” Zhang said.
The total revenue of China’s overseas contracting business rose 17.6 percent year-on-year to $137.14 billion in 2013, while the value of newly signed contracts went up 9.6 percent to $171.6 billion, according to the China International Contractors Association.
Vaughn Barber, head of China Outbound at KPMG Advisory (China) Ltd, said that Chinese overseas contracting enterprises lack clear strategies for overseas investment and business upgrading.
“The most important challenge for China’s overseas contractors is image. They are also less developed in risk control and resource integration after mergers and acquisitions. In addition, bigger participation of private enterprises in the country’s overseas contracting business would help enhance localization,” Barber said.
Stephen Hammond, the UK’s parliamentary undersecretary of state for transport, called for closer links between Chinese and UK infrastructure firms to identify opportunities for collaboration and explore emerging markets.
“Together, we know just what it takes— with China’s far-reaching presence and longstanding expertise in construction and the UK’s expertise in infrastructure investment, to achieve better outcomes in building large-scale projects on the continent,” Hammond said.