China’s Cabinet said today it will encourage Chinese firms to invest overseas in infrastructure projects under the ambitious One Belt, One Road (OBOR) initiative while curbing them in areas like entertainment and real estate. The stated aim of the OBOR initiative is to enhance connectivity and cooperation, primarily between China and the rest of Asia and Europe through a network of land and maritime routes. It was announced by President Xi Jinping in 2013. Analysts, however, say the initiative has geostrategic ambitions for China. The China-Pakistan Economic Corridor, a part of the OBOR, links western China’s Xinjiang region to the Gwadar Port in southern Pakistan.
India has objected to CPEC as it runs through Pakistan- occupied Kashmir. A document released by the State Council (the Chinese Cabinet) said China will limit overseas investments by domestic companies in areas such as real estate, hotels, cinemas, entertainment industry and sports clubs, but encourage them to invest in infrastructure and new technology, the state-run Xinhua news agency reported. The report said investments in line with OBOR and those conducive to China’s industrial upgrade will be encouraged.
Investments in sectors such as gambling will be banned. Another Xinhua news report said that China’s fixed-asset investment (FAI) slowed to 8.3 per cent in the first seven months this year, but the overall situation remains steady. FAI includes capital spent on infrastructure, property, machinery and other physical assets. In the January-July period, fixed-asset investment in China grew 8.3 per cent year-on-year to 33.74 trillion yuan (nearly USD 5 trillion), compared with an expansion of 8.6 per cent in H1 it said.
National Development and Reform Commission spokesperson Meng Wei said China has approved 22 FAI projects with total investment of 165.5 billion yuan (about USD 25 billion) in July. The projects were mainly in energy, water conservation, transportation and high-tech, Meng said.