Recently, China pledged $40 billion to set up a Silk RoadFund. This piece of news undoubtedly serves as a driving force for China's grand strategy of "One Belt and One Road," referring to the Silk Road economic belt and the 21st century Maritime Silk Road, and provides a guarantee of flexible funds.

Although it is not known who will manage this fund, it is worth thinking about how to utilize the money.

The establishment of the "One Belt and One Road" needs the provision of constant funding. Making use of the Silk Road Fund through financial leverage is an effective method to solve this problem.

As some scholars have noted, the Silk Road Fund can serve as a lever. The construction of basic infrastructure is vital in the "One Belt and One Road" strategy. This long-term project needs cooperative financing provided by the government and different commercial institutions such as banks.

It is predicted that across the Asia-Pacific region, around $8 trillion will be committed to infrastructure projects over the next decade.

Through innovative financing such as bonds, concepts stock and public placement, the $40 billion of Silk Road Fund can be leveraged into a much greater amount.

Under such circumstances, it is necessary to get private capital involved, making it the highlight of this Chinese initiative.

China has set aside tens of billions of dollars from its foreign exchange reserves to finance the Silk Road Fund, hoping to bring in larger-scale bank financing and private capital.

Through this fund, China's excess capacity and private capital can go overseas, paving the way for China's development strategy of moving beyond its own borders.

Another opportunity the Silk Road Fund brings is the cultivation and import of talent.

We are in need of not only professional managerial staff, but also experienced technical personnel, who will contribute enormously. Therefore, a special sum of money should be set up to cultivate and encourage talented people, making the talent network flow on the "One Belt and One Road."

The Silk Road Fund should integrate international cooperation too. Along the "One Belt and One Road" are both newly emerging economies and developing countries, with a total population of 4.4 billion.

There is huge potential for cooperation with these countries. Nonetheless, various problems exist at the moment.

For example, regional geopolitical risks may influence investment and capital chains. Differences in the historical and cultural backgrounds of countries along the "One Belt and One Road" may also affect this project.

In the face of all these problems, China should also mobilize the Chinese people who live along the "One Belt and One Road," encouraging them to utilize their social networks, so as to promote communication at all levels.

The establishment of the Silk Road Fund is just a beginning. Using it as a lever to create trillions in funding is a tough task, but utilization of all kinds of resources will help make a miracle.

The author is a businessman from Taiwan and visiting research fellow of the Institute of International Studies, Tsinghua University. opinion@globaltimes.com.cn

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