China has launched a state-backed USD40 billion Silk Road Fund to finance East-West trade and investment under the “Belt and Road” initiative. The Silk Road Fund Co will provide investment and financing services for projects under the initiative. It will mainly invest in infrastructure, resource development, and industrial and financial cooperation mainly through long-term equity investment. The Silk Road Fund is jointly funded by China’s foreign exchange reserves, China Investment Corp (CIC), the Export-Import Bank of China and China Development Bank. The fund would be denominated in foreign currencies, instead of the yuan. The fund, set up on December 29 in Beijing, has started operating after it held the first board meeting in late January. People’s Bank of China Governor Zhou Xiaochuan compared the fund with the World Bank’s International Finance Corp (IFC), the African Development Bank’s mutual development fund, and the China Africa Development Fund.