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AIIB (Asian Infrastructure Investment Bank) news

China played its cards right. Chinese leaders just know how to get things done.
China should always retain veto power over major decisions since most of the members are American vassal states and they might be in there to sabotage the whole bank as Washington's agents.

American regime will do anything to sabotage the AIIB.

I always found it suspicious that once UK (America's closest vassal state) decided to join AIIB, all other American vassals decided to join in a matter of days. It could be that in public the US pretends they 'lost out' but in reality this might have been a master plan all along to get its vassals into AIIB and sabotage it once they joined the bank. This way the AIIB won't operate properly and the US won't have to do it themselves.

Don't trust a snake like the US.

Nonetheless, it is now obvious that, no matter how much fifth-columns the US might have inside, China holds the veto power.

Question is, if the argument is legitimate, why did the USA held Japan while letting other close allies to join? Or, the close allies joined at the expense of US disagreement and wrath?
 
Nonetheless, it is now obvious that, no matter how much fifth-columns the US might have inside, China holds the veto power.

Question is, if the argument is legitimate, why did the USA held Japan while letting other close allies to join? Or, the close allies joined at the expense of US disagreement and wrath?

Maybe because US has its World Bank and Japan has ADB, they decided not to join but got its European vassals to do the dirty work. Who knows.

China should always stay alert to all possibilities, especially when dealing with the US and its vassals.
 
Maybe because US has its World Bank and Japan has ADB, they decided not to join but got its European vassals to do the dirty work. Who knows.

China should always stay alert to all possibilities, especially when dealing with the US and its vassals.

I agree. US probably wants to hold the ADB card up against the AIIB. Nonetheless, China has absolute voting power and I do not see it changing anytime soon -- unless India becomes an 8trillion USD economy while China just remains as it is today.
 
Well I have to agree on this one

In IMF and WB, China is represented way below its economic scale. That's the major issue China has with those institutions. I guess it is same with India and other developing nations like Brazil and Russia. They are underrepresented.

In AIIB, it is done according to a mathematical formulation as agreed by all members.
 
In IMF and WB, China is represented way below its economic scale. That's the major issue China has with those institutions. I guess it is same with India and other developing nations like Brazil and Russia. They are underrepresented.

In AIIB, it is done according to a mathematical formulation as agreed by all members.

Well atleast you are honest & fair
 
That's what the AIIB is for, based on the size of the economy you get the appropriate share. AIIB is the answer to IMF/WB, i think it sets a good example to every member, and i'm sure they won't regret joining this new prestige institution.
 
Another report, this time from WSJ...

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How China Plans to Run AIIB: Leaner, With Veto
The Beijing-led investment bank aims to give developing nations a greater voice in multilateral organizations
By Mark Magnier
June 8, 2015 7:48 a.m. ET

BEIJING—A new China-led infrastructure bank aims to differentiate itself from other lenders with a leaner, more efficient structure that ultimately gives Beijing veto power over major decisions, people close to the institution said.

The bank’s voting structure means that China will retain the upper hand as the largest shareholder, according to its articles of incorporation and people close to the bank. China has offered to forgo outright veto power in day-to-day operations, which helped win over some key founding members.

The articles, agreed to at a meeting of the bank’s 57 founding member countries last month, call for the Asian Infrastructure Investment Bank to be overseen by an unpaid, nonresident board of directors, unlike the World Bank and the Asian Development Bank. The new bank, which will be based in Beijing and use English as its operating language, will open bidding for projects to all, unlike the ADB, which restricts contracts to member countries, according to a copy of the articles reviewed by The Wall Street Journal.

The new Asian bank also gives a bigger voice to developing nations—a turnaround from the International Monetary Fund and World Bank, which China lobbied for years for greater representation.

Overall, the bank, on paper, attempts to redress perceived shortcomings at the World Bank, ADB and other development institutions that have been criticized by China for being top-heavy and overly controlled by the U.S. and other wealthy nations.

“China benefited a lot from existing multilateral organizations, but it was also frustrated in a lot of ways that they didn’t increase the weight of China and other developing markets, that they are often slow and bureaucratic,” said David Dollar, a senior fellow at Brookings Institution and former World Bank and U.S. Treasury official in China who has done unpaid consulting for the new bank.

The bank, known as AIIB, has been seen as an ambitious bid by Beijing to expand its international influence and challenge U.S. clout while at the same time bolstering opportunities abroad for Chinese construction and engineering companies.

A low-key lobbying campaign by China exceeded expectations, attracting 56 other countries, among them U.S. allies Australia and South Korea, which faced pressure from Washington not to join.

“China can’t lose from having an economically rational, transparent governing structure at the AIIB that it can showcase in response to the U.S.,” said Leslie Young, an economics professor with Beijing’s Cheung Kong Graduate School of Business. “This is going to change the game and expand its soft power,” he said.

AIIB.WSJ_16U_20150605055711.jpg


Negotiators approved the basic framework last month in Singapore and agreed the bank would start with $100 billion in registered capital. A signing ceremony is scheduled for late June, according to people close to the bank. Once 10 members representing at least 50% of the share votes ratify the agreement, the AIIB can start operating, probably by late 2015, according to Chinese media.

Voting shares are apportioned according to a complex formula that factors in each member’s capital contribution, the size of its economy, basic votes each member receives equally plus another 600 votes allocated to each founding member.

At least 75% of share votes are reserved for members located in the Asia-Pacific region, giving smaller Asian countries a greater say than they have in other global organizations.

According to the bank’s articles, China is providing $29.78 billion of the bank’s $100 billion capital base. Under the voting formula, that gives Beijing between 25% and 30% of the total votes, enough to block decisions involving structure, membership, capital increases and other significant issues laid out in the articles that require a “super majority” of at least 75% of votes.

Other big prospective contributors among those listed as Asia-Pacific members are India at $8.36 billion, Russia at $6.53 billion and South Korea at $3.74 billion. Outside the region, Germany’s allocation is $4.48 billion, France’s is $3.37 billion and Brazil’s is $3.18 billion.

Shareholding and voting amounts could shift if some founding members change their minds. “Willingness will still be decided by the president and the cabinet,” said Philippines National Treasurer Roberto Tan, part of his country’s negotiating team, who said the Philippines’s capital share in the bank would be about 1%.

China’s finance ministry, which has been spearheading the initiative, didn’t respond to requests to comment about the bank’s structure.

The Ministry of Foreign Affairs said the bank aims to be “inclusive and transparent.”

“The important idea is to achieve common development and build a new model of international cooperation,” ministry spokesman Hong Lei said.

As one of China’s biggest forays in trying to reshape the global order, the bank aims to set high standards for efficiency and transparency—and counter criticisms it will be a tool of Chinese foreign policy, the people close to the bank said.

“They will try and increase the efficiency of investment compared to other development banks with long approval procedures,” said Cui Fan, a professor with Beijing’s University of International Business and Economics.

The bank is expected to maintain a lean staff, according to analysts and those close to the bank, compared with the World Bank, which has over 12,000 staff and consultants. Doing without a resident board of directors should save the bank money and friction in decision-making.

Mr. Dollar, of Brookings, said the resident board costs the World Bank some $70 million annually. When he worked at the bank, “There was often a certain tension between the management and the board members whose resident staff wanted to find out about projects at an early stage.”

The bank articles pledge to heed environmental risks and promote transparency, though they don’t offer specific mechanisms to safeguard against bid-rigging, environmental degradation and other potential fallout from huge infrastructure projects. These issues were of significant concern to prospective European members facing vocal domestic civic society constituencies, said the people close to the bank.
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That's what the AIIB is for, based on the size of the economy you get the appropriate share. AIIB is the answer to IMF/WB, i think it sets a good example to every member, and i'm sure they won't regret joining this new prestige institution.

Will the voting rights change with time, since some countries will grow larger and some will become smaller in the next decades? Is there some kind of mechanism to consider this problem within the AIIB?
 
Will the voting rights change with time, since some countries will grow larger and some will become smaller in the next decades? Is there some kind of mechanism to consider this problem within the AIIB?
That's a good question, i don't know if that will be the case. I won't be surprised if it does because that's the reason why China initiated this alternative. As you know China and some other countries don't get more influence within IMF or WB despite our position as the #2 biggest economy status. I guess we just have to wait and see how the other economies are performing in the coming years/decades before we can tell for sure whether their share will drop/rise or remain the same.
China has put a large chunk of money inside this bank so it's natural she will have the biggest influence. We don't know if smaller economies can put more money in the future to get more say in the decision making. It would be interesting to see if their influence will fluctuate based the amount of money they invest or the size of their economies.
 
Germany to be AIIB's fourth largest shareholder

The German cabinet has approved plans for Germany to buy a stake in the China-led Asian Infrastructure Investment Bank that will make it the fourth largest shareholder. It'll also provide financial guarantees
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AIIB.signing-ceremony.jpg


Germany is to acquire a 4.1-percent stake in the Asian Infrastructure and Investment Bank (AIIB), which would make it the fourth largest stakeholder after China, India and Russia. The German government approved a draft proposal on Wednesday, which will still have to pass through both houses of parliament.

Relevant documents said the AIIB would have a capital base of $100 billion (88.6 billion euros). "Germany's capital investment will most likely amount to some $900 million, to be contributed between 2016 and 2019," the draft plan stated, adding that the deal would also involve a further $3.6 billion in financial guarantees.

Power struggle

The AIIB is designed to raise more resources for infrastructure projects across Asia, with support also coming from 13 other European nations, including fellow G7 countries France, Britain and Italy. The founding charter is scheduled to be signed on June 29 in Beijing.

The US, Japan and Canada have remained skeptical of the lender, assuming that China could misuse its dominant role in the bank for pushing its own geopolitical agenda.

Washington also fears the AIIB will pose a significant challenge for the International Monetary Fund (IMF) and the World Bank where it wields huge influence.

The Wall Street Journal reported Tuesday that China would ultimately have veto power over major decisions of the AIIB after providing almost a third of the lender's overall capital base, giving Beijing an estimated 25 to 30 percent of total votes.

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My understanding - China does not have direct veto, only indirect veto due to the 25 to 30% of the total votes it holds, as major AIIB decisions require 75% approval.
 
New Zealand to invest US$87m in AIIB
June 15, 2015
The New Zealand government announced Monday that the country will invest NZ$125 million ($87.27 million) in the China-led Asian Infrastructure Investment Bank (AIIB) paid over five years.

New Zealand has agreed to become a founding member of the AIIB, which is being established to invest in new infrastructure across Asia, Finance Minister Bill English said in a statement.

The bank aimed to address a significant gap in infrastructure investment in the Asian region, which would enhance the Asian region's growth and in turn be good for New Zealand, English said.

"New Zealand was the first Western developed nation to join negotiations to set up the bank and our membership will enhance our already strong economic, trade and investment links with the Asian region," said English.

It was envisaged the bank would have initial capital of close to $100 billion to invest, which would be financed by individual country contributions proportionate to their economic size.

Asia was important to New Zealand's future so it made sense to contribute to infrastructure investment in the region, Foreign Minister Murray McCully said in the statement.

"Asia is driving global growth and it is full of opportunities for New Zealand," McCully said.

"This new bank will be a welcome addition to existing institutions and it stands to make a significant contribution to infrastructure in the region," he said.

"New Zealand is benefiting from the rapid and sustained development across Asia. To ensure we achieve further growth and that more people in the region are lifted out of poverty, Asia needs to address continuing constraints posed by infrastructure bottlenecks."

The next step would be a formal signing ceremony in Beijing later this month, and the bank was expected to begin operations before the end of the year.
 
China said: Let's work together to develop infrastructure in Asia...... If you don't want to join, then don't cause trouble.

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China Urges Efforts to Look for Solutions, Not Trouble on AIIB

A Chinese foreign ministry spokesman on Thursday urged "some countries" to help look for solutions rather than trouble as the Asian Infrastructure Investment Bank (AIIB) aims to fill the gap in infrastructure investment in Asia.

"The mission of the AIIB is to help developing economies in the region resolve their practical problems in pursuit of common development and prosperity," Spokesman Lu Kang said at a daily news briefing.

"Toward the practical problems faced today, the right attitude for us should be to work together to find a way rather than look for trouble to set back the efforts to resolve the problems," said the spokesman.

Lu said that most Asian countries are developing countries in need of investment in infrastructure.

It is a good thing if there are more options to finance infrastructure, Lu said, adding that that is why the AIIB proposal has won widespread support.

China and the other 56 founding members from both Asia and beyond are willing to work together to boost development, he said, adding that it is a pleasure to know that more countries want to join the financial institution.

"It is understandable that some countries cannot join the AIIB now," Lu said. "However, it is quite unacceptable that some countries who do not want to join keep looking for trouble," he added.

(Xinhua News Agency June 18, 2015)

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China did not use the word "condemn". Then Reuters spin this into the following. The contents of the article doesn't match the title. My friends, this is how western media works!

China condemns efforts to find fault with new infrastructure bank AIIB
BEIJING, June 18

China's Foreign Ministry on Thursday condemned efforts to cast doubt on governance issues facing the country's new Asian Infrastructure Investment Bank (AIIB), saying attention should focus instead on finding ways to tackle regional problems.

A total of 57 countries, including G7 members Britain, Germany and France, have joined the AIIB as founding members.

But the United States and Japan have stayed out of the venture, which is seen as a rival to the U.S.-dominated World Bank and Japan-led Asian Development Bank (ADB), expressing concern about the new bank's governance.

"The aim of China's proposal to set up the AIIB is to help the developing economies of this region to really resolve some actual difficulties they face, and lead the region to joint development and prosperity," Foreign Ministry spokesman Lu Kang told a daily news briefing.

"We believe that the correct attitude to the real problems facing countries in this region is to do more to find ways of addressing them rather than finding fault," Lu added.

The region's financing needs are so enormous that having another means of addressing them can only be a good thing, the spokesman said.

"Now there are even more countries who want in on the AIIB, and this is a happy thing. Some countries can't for the moment join, and this can be understood," Lu said.

"But if some countries don't want to join, and keep looking for fault in the efforts of other countries to resolve problems, then this attitude really isn't very desirable." (Reporting by Ben Blanchard; Editing by Clarence Fernandez)
 
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China said: Let's work together to develop infrastructure in Asia...... If you don't want to join, then don't cause trouble.
China Urges Efforts to Look for Solutions, Not Trouble on AIIB
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China did not use the word "condemn". Then Reuters spin this into the following. The contents of the article doesn't match the title. My friends, this is how western media works!
China condemns efforts to find fault with new infrastructure bank AIIB

Western media spinning the story again? Nothing new, as expected.

Well China never expect applause from the west in the first place, nor care about their hostility if it so happens, since either way both are empty words, and equally worthless.


It's a good deal for China, Germany & AIIB.

Germany is a real tech/financial power, its addition will strengthen AIIB.

From Berlin's perspective, it would be in their interests to seek opportunities on the vast Eurasian continent.

Check Post #2
What the BRICS plus Germany are really up to?
 
Please don't throw the US with the EU into one basket and call it the "West". Ask any informed person in Germany and you will see that the US' interests and our interests are diametrically different. We are part of Eurasia and our future is Eurasia. There are 4 billions consumers in Eurasia compared to the 350 million of the US. Most markets in Eurasia are growing markets unlike the US and the EU where the markets are mostly saturated.
 

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