China to set up new $3 billion investment fund for central and eastern Europe

Belgrade, 16 December 2014 (MIA) - China said on Tuesday it would create a new investment fund of $3 billion (2.4 billion euros) targeting central and eastern Europe, seeking to strengthen its foothold in the region as a door to the wider European Union, Reuters reports. 

China sees central and eastern Europe as a potentially lucrative market and bridgehead to the wider EU, drawn by relatively low wages, educated workforces and scope for development on the fringes of the bloc.

Chinese investments in the region usually come in the form of loans financed by China's state-owned banks for projects carried out by Chinese companies, particularly in the sectors of infrastructure and energy.

Chinese Premier Li Keqiang, however, addressing a summit in Belgrade with leaders of 16 central and eastern European countries said China was open to "new models of financing and investment".

"On the Chinese side we can create a new investment fund with a total value of $3 billion," Li told the summit.

"We expect new ways of cooperation through private-public partnership, various leasing arrangements and that will make our cooperation more efficient, more productive, and by doing that all desires of EU member states for respecting of their rules will be fulfilled," he said.

In 2012, China announced a $10-billion credit line for a region comprising some of the EU's newest members and others in the Western Balkans that are not yet part of the bloc but trying to get there.