Czech Republic promises $224m investment in Chinese government fund

The government of the Czech Republic will provide 200 million euros ($224 million) to join a Chinese government fund aimed at promoting investment in Central and Eastern Europe, said a memorandum of understanding (MOU) signed by the Czech government and the Industrial and Commercial Bank of China on Thursday.

According to the MOU, the Czech government will support investment operations of the fund in the Czech Republic, give necessary investment guidelines and recommend potential investment opportunities.

The Industrial and Commercial Bank of China, the nation's largest commercial lender by assets, will invest 1 billion euros to establish a China-Central and Eastern Europe financial holding company, which will initiate the establishment of the Central and Eastern Europe fund and several other funds.

The ICBC said the to-be-formed company will raise funds from the government of Central and Eastern European countries or their authorized institutions as well as from other markets. Its investments will target infrastructure construction and international production capacity cooperation under the framework of the Belt and Road Initiative, and its target markets of investment cover Central and Eastern Europe and other parts of the world that conform to the interests of China and these regions.

Last month, former ICBC chairman Jiang Jianqing, 63, resigned due to his age. Sources with knowledge of the matter said he may lead the preparation work for the establishment of the new fund.

Also on Thursday, the bank signed an MOU with the Czech government in Beijing to set up a branch in Prague to further strengthen bilateral financial cooperation.

The Czech Republic is China's second largest trading partner in Central and Eastern Europe. In 2015, bilateral trade between the two countries increased 7.8 percent from a year earlier to $20.7 billion.

Contact the writer at jiangxueqing@chinadaily.com.cn