Xi made the announcement on Sunday in his opening address to a two-day "Belt and Road" conference in Beijing that brought together leaders from 29 countries.
It was Xi's latest high-profile appearance that seeks to cast him as a global leader and chief advocate for free trade.
"We should build an open platform of cooperation and uphold and grow an open world economy," Xi said.
Despite China's public defence of free trade, Beijing faces mounting complaints that the government is hampering or reducing market access to foreign companies.
Xi said China would contribute 100bn yuan ($14.5bn) to the Silk Road Fund, which was set up in 2014 to finance infrastructure projects and provide aid worth 60bn yuan ($8.7bn) to developing countries and international organisations taking part in the initiative to revive the ancient trade route.
Two Chinese banks will also set up lending schemes valued at 380bn yuan ($55bn) to support the initiative, Xi said.
Washington is being represented by a junior delegation led by Matt Pottinger, special assistant to the president and senior director for East Asia at the National Security Council.
Al Jazeera's Adrian Brown, reporting from Beijing, said there was a fair number of skeptics saying Beijing is using the initiative to build its own political influence.
"The price tag on all of this has been put at something like $22 trillion, which is a phenomenal sum of money, so many people are asking where is this money going to come from and saying that China is acting out of self-interest to get its own economy moving again and helping the economy of countries that depend on China," he said.
Human Rights Watch also raised fears about the treatment of people along the new Silk Road route in Central Asian nations with poor track records in infrastructure projects.
India delivered an implicit criticism of China's plan on Saturday in a statement from its foreign ministry that said such an initiative should meet international norms and not create unsustainable debt.
India also has objected to Chinese state-owned companies working in the Pakistani-held part of Kashmir, the Himalayan region claimed by both sides, seeing that as an endorsement of Pakistan's control.
"No country can accept a project that ignores its core concerns on sovereignty and territorial integrity," the statement said.
Seeking to portray the initiative as welcoming and inclusive, Xi promised to avoid forming a "small group" of allies, which he said might harm regional stability. Instead, he said, Beijing wants "partnerships of friendship" and a "big family of harmonious coexistence".