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Category: CHINA

Published: Wednesday, 08 April 2015 11:59

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‘Belt and Road’ initiative to spur financial cooperation 

      The “One Belt and One Road” initiative is a major decision adopted by China in response to the changing world and serves as a guidance to coordinate the domestic and international markets, a famous entrepreneur told huanqiu.com, the official website of the Global Times Chinese edition, over the weekend.

“China and its neighbors are similar in terms of resources but are years from optimizing their allocation for maximum economic benefit,” said Lai Xiaomin, chairman of China Huarong Asset Management Co., Ltd., one of the largest financial asset management companies in China.

“One of the major problems that bottlenecks the cross-border flow of resources is finance,” said Lai. To solve the problem, Lai suggested that corresponding financial support should be provided within the framework of the Belt and Road initiative.

     Financial leveraging may provide a solution, said Lai. As countries and regions involved in the Belt and Road initiative are mainly emerging economies and in need of funds, financial leveraging can play a very important role in the integration of the real economy and the financial industry, as well as in areas such as infrastructure, international trade and investment.

     The implementation of the Belt and Road initiative needs not only capital but also a comprehensive financial system that includes a stable and free currency circulation, secure credit enhancement and a comprehensive logistics financial service.

     International financial cooperation is also key, Lai said. Factors such as geopolitical conflicts, competition with other economic organizations, imbalanced economic and financial environment in different countries and regions will be the main constraint on development. More financial cooperation is needed to mobilize the Belt and Road construction in order to benefit all sides.

      Lai said that the initiative’s strong demand for financial resources will accelerate innovation, internationalization and cross-border cooperation in China’s financial industries.

      To be more specific, the Belt and Road financial system will work to coordinate the positive and prudent macro-economic and financial policies of countries and regions.

      It shall be a diversified and comprehensive structure led by development-oriented finance centered on banking, which has a stable and free currency circulation mechanism, Lai said. Supported by special investment funds, such a system relies on international financial cooperation and other types of supporting financial institutions. (People’s Daily)