| SUZHOU, China
SUZHOU, China Nov 24 China on Tuesday proposed
setting up a new multilateral financing institution to support
project lending in central and eastern Europe, as it looks to
strengthen its influence in a region seen as a gateway to the
The proposal, floated by Chinese Premier Li Keqiang during a
summit in the city of Suzhou with leaders from 16 Central and
Eastern European countries, came with few details.
Central and Eastern Europe represent a key part of China's
"Belt and Road" strategy to carve out new overseas export
markets between Asia and Europe for its companies as the
domestic economy slows.
But out of the countries represented in Suzhou, only Poland
has signed up to be among 53 founding members of the China-led
Asian Infrastructure Investment Bank, set up to be a rival of
the World Bank that will be the heart of China's "Belt and Road"
initiative when it begins lending next year.
"China respects the standards of the European Union and
wants to find more avenues and agile methods to give financing
support to big projects," Li said.
Li suggested setting up "a 16+1 multilateral finance
company" to finance trade and investment, reducing financing
costs and removing the need for governments to provide
China's investments in the region have so far been mostly in
infrastructure and energy projects carried out by Chinese
companies that are financed using loans issued by Chinese
Its ramped up presence in the region also comes as a
weakened Russian economy steers central and eastern European
leaders out to search for new strategic partners.
Last week, China's Vice Commerce Minister Gao Yan said
Chinese companies have invested more than $5 billion in CEE
countries and 16 CEE countries have invested more than $1.2
billion in China.
In 2014, the trade volume between China and CEE countries
reached $60.2 billion, up from $43.9 four years ago.
Last year, China said it would create a new investment fund
of $3 billion targeting central and eastern Europe and signed an
agreement to construct a high-speed railway linking Serbia and
Separately, China signed deals with Hungary and Serbia on
Tuesday on the construction and renovation of a rail link
between the Serbian and Hungarian capitals.
Li said construction of the railway would start this year
and be completed within two years.
(Editing by John Ruwitch and Sanjeev Miglani)