US wel­comes China's ini­tia­tives to com­ple­ment intl fi­nan­cial ar­chi­tec­ture

The Pak Banker - - 6BUSINESS -

The United States wel­comes China's ini­tia­tives to in­crease world in­fra­struc­ture in­vest­ment, which can ben­e­fit cur­rent global fi­nan­cial ar­chi­tec­ture, US of­fi­cials said Mon­day. "We wel­come the Asian In­fra­struc­ture In­vest­ment Bank (AIIB) and the Belt and Road Ini­tia­tive," said Ziad Haider, a State Depart­ment of­fi­cial.

The United States also rec­og­nizes China's ef­fort to nar­row the mas­sive gap in in­fra­struc­ture around the world, Haider told an event held by the Cen­ter for Strate­gic & In­ter­na­tional Stud­ies (CSIS), a think-tank based in Wash­ing­ton DC.

The CSIS held the event to dis­cuss the im­pli­ca­tions of China's Belt and Road Ini­tia­tive and the AIIB to­ward the global in­fra­struc­ture devel­op­ment.

Sta­tis­tics re­leased by the Chi­nese Min­istry of Com­merce showed Chi­nese en­ter­prises di­rectly in­vested $14.82 bil­lion into 49 coun­tries within the co­op­er­a­tion frame­work of the Belt and Road Ini­tia­tive last year, up 18.2 per­cent com­pared with the pre­vi­ous year.

The AIIB was of­fi­cially es­tab­lished late last year, with an au­tho­rized cap­i­tal of $100 bil­lion. The bank was formed by 57 mem­bers from de­vel­oped coun­tries like Bri­tain, France and Ger­many and emerg­ing and de­vel­op­ing coun­tries like Brazil, South Africa and Pak­istan.

"The AIIB rep­re­sents a re­sponse to a gen­uine need for greater in­vest­ment to ad­dress a global in­fra­struc­ture deficit," said a re­port is­sued by the CSIS at the event.

The US Trea­sury Depart­ment strongly sup­ports do­mes­tic, bi­lat­eral and mul­ti­lat­eral ef­forts to in­crease global in­fra­struc­ture in­vest­ment, as qual­ity in­fra­struc­ture in­vest- ment will boost a coun­try's econ­omy sig­nif­i­cantly, said John Hur­ley, di­rec­tor of In­ter­na­tional Debt and Devel­op­ment Pol­icy of the US Trea­sury Depart­ment.

Hur­ley said that find­ing ways to finance nec­es­sary in­vest­ment in in­fra­struc­ture in de­vel­op­ing coun­tries is one of the big chal­lenges today.

"Emerg­ing and de­vel­op­ing coun­tries will need an es­ti­mated 1 tril­lion (dol­lars) in in­fra­struc­ture in­vest­ment by the year 2020 just to sus­tain cur­rent eco­nomic growth," Hur­ley said "We con­tinue to have con­ver­sa­tions with China and other AIIB mem­bers," said Hur­ley, adding that the AIIB is com­ple­ment­ing the cur­rent in­ter­na­tional fi­nan­cial ar­chi­tec­ture. "We've seen re­cent re­ports of the AIIB co-fi­nanc­ing projects with the Asian Devel­op­ment Bank and the World Bank and this is some­thing that we strongly wel­come," Hur­ley said.

The Belt and Road Ini­tia­tive, pro­posed by Chi­nese Pres­i­dent Xi Jin­ping in 2013, refers to the Silk Road Eco­nomic Belt that links China with Europe through cen­tral and west­ern Asia by in­land routes and the 21st-Cen­tury Mar­itime Silk Road that con­nects China with South­east Asia, Africa and Europe by sea routes. Mean­while, Kenya and China Com­mu­ni­ca­tions Con­struc­tion Com­pany (CCCC) has signed an agree­ment for the con­struc­tion of the Stan­dard Gauge Rail­way (SGR) line from Naivasha in north­west Kenya to Mal­aba in west­ern Kenya. A state­ment from the Kenya Railways Cor­po­ra­tion (KRC) re­ceived on Tues­day said the Chi­nese firm will de­velop Naivasha-Kisumu/Mal­aba SGR project, Kisumu Port and the In­land Con­tainer De­pot at a to­tal cost of $5.3 bil­lion.

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