China today officially launched its ambitious USD 40 billion Silk Road infrastructure fund which will be managed by three of its major financial institutions.

The Silk Road Fund designed to finance China-proposed “Belt and Road” initiatives has began operation, the country’s central bank, People’s Bank of China said.

The Silk Road Fund Co Ltd was established in December last year in Beijing, after President Xi Jinping announced the creation of the USD 40 billion fund in November.

The company was jointly funded by China’s foreign exchange reserves, China Investment Corporation, the Export-Import Bank of China and China Development Bank.

The fund is drawn from China’s massive USD 4 trillion forex reserves.

“The priority (of the company) is to seek investment opportunities and provide investment and financing services during the progress of the Belt and Road Initiatives,” the Bank statement said.

“Belt and Road” refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road (MSR) initiatives proposed by China in 2013 for improved cooperation with countries in a vast part of Asia, Europe and Africa.

A management team headed Wang Yanzhi, an official with the country’s foreign exchange regulator has been formed to formally operate the fund.

The fund is part of China’s national strategy to revive the land-based and maritime Silk Roads by financing major infrastructure projects along the centuries-old trading route.

Observers say it is aimed expanding China’s strategic influence and counter US’ Asia Pacific pivot.

The Silk Road projects involved a maze of roads and ports connecting Asia, Europe and Africa.

India which has been invited to take part in the Bangladesh, China, India, Myanmar (BCIM) and the Maritime Sill Road (MSR) said it will selectively back the initiative.

While India is taking part in the meetings for BCIM, it is yet to give its response on MSR.

External Affairs Minister Sushma Swaraj during her recent visit here said India will not provide any blanket endorsement for the Silk Road plans and will look into its interests but wherever its interests converge India will support it.

Sri Lanka which earlier supported MSR announced review of the Colombo port under the new government.

China’s other Silk Road projects include the road connecting China to Europe through Central Asia and the Pakistan-China Economic Corridor being built through Pakistan-occupied Kashmir (PoK).

The fund is also seen as an addition to China-led Asian Infrastructure Investment Bank (AIIB) for financing infrastructure projects such as high-speed railways, airports and roads in Asia.

The bank was launched with USD 40 billion in which India along with 25 others countries have an authorised capital of USD 100 billion and the initial subscribed capital of around USD 50 billion.

Besides AIIB, China has also launched the BRICS Bank along with Brazil, Russia, India and South Africa.