As reported by Japan’s news media, the Japanese government plans to earmark US$100 billion for investing in infrastructure projects in Asia in the next five years, with the investment scale rivaling the authorized initial capital of the China-initiated Asian Infrastructure Investment Bank (AIIB). But many observers doubt whether Japan is financially and technically capable of carrying out the plan, given its government’s heavy financial burden and its aging population, according to the Shanghai-based China Business News (CBN).
“In my opinion, the US$100 billion investment capital won’t come from the government, but from general commercial financing channels. This is because private bodies in Japan boast huge amounts of financial assets, and the government can, at most, provide a certain interest subsidy or lending guarantees,” Professor Chen Jianan of the School of Economics, Fudan University, told the CBN.
Chen’s view is seconded by Pan Xiaoming, an assistant researcher at the Shanghai Institutes for International Studies, who opined that Japanese business conglomerates may be the behind-the-scenes suppliers of the investment funds, with the Japanese government only serving as a bridge for them.
Ding Yifan, a researcher at the Development Research Center of the State Council, also said that Japan’s Asian infrastructure investment plan is largely designed to counter the China-led AIIB project, but can’t do well in this regard. “The AIIB is a multilateral financing platform and its initial capital of US$100 billion can be expanded, whenever needed, by member states. But Japan’s ability to satisfy the US$100 billion capital need is quite limited, let alone offering more capital, given the fact that one fourth of the government’s fiscal budget is earmarked for repaying debts,” Ding said.
Full article: Japan’s US$100bn Asian Infrastructure Plan meant to counter AIIB (Want China Times)