AIIB (Asian Infrastructure Investment Bank) news

[Shotgunner51]

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.

Yes bro I know the "West" is heavily splintered in many aspects from geo-political perspectives to geo-economic interests, that's why I usually use the term "US-led West" in describing the camp in which US can enforce concerted action on EU, Japan. Donald Rumsfeld's "old Europe" view, Victoria Nuland's cursing are just some notorious and fresh reminders of the fact.

Even inside a splintered EU I am also well aware (by checking data, numerical indicators) of Germany's unique position as compared to rest of EU like France, UK, PIIGS and the new members (in central & eastern Europe) in tech advancement, degree of industrialization and financial strength. It's obvious where Germany stands.

That's why I said Germany becoming a major shareholder of AIIB is a good deal to the bank, to China and to Germany itself. Look forward to closer tie between Beijing and Berlin on more regional/global deals!

 

[IR-TR]

Trust me, Germany and the Germans do NOT like the current situation (being forced to apply US foreign policy). But they have no option for the time being.

 

[Shotgunner51]

Trust me, Germany and the Germans do NOT like the current situation (being forced to apply US foreign policy). But they have no option for the time being.

I think you could be right, hard to imagine anyone will like something that goes against their own interests! But US will force it, so no choice, as of now.

 

[TaiShang]

European bank seeks to combine strength with AIIB
June 22, 2015
The European Bank for Reconstruction and Development is keenly eyeing opportunities to work closely with the Asian Infrastructure Investment Bank, both in offering advice to the AIIB as it grows and in jointly funding infrastructure projects.

Suma Chakrabarti, president of the EBRD, said the creation of the China-led bank has significant implications for an older development-oriented bank like the European bank because the combined strength of both can allow them to take on much larger projects.

In addition, efficient and innovative ways of funding that may be demonstrated by the AIIB will provide inspiration and create benchmarks that affect how the EBRD examines and funds projects, Chakrabarti said.

Chakrabarti, who is due to visit China for a two-day visit beginning June 26, will be giving a speech outlining his advice to the AIIB, including details about setting up a reasonable business model, governance and standards.

He will also have conversations with counterparts in China to examine how the two banks can cooperate, especially in geographical regions where they have overlapping responsibilities.

"What I'd really like to achieve by next year, when the AIIB is running, is to have at least two or three cofinance projects. That's going to be our main push. Of course we can do other things together, but projects will be a good way to start," Chakrabarti said.

Founded in 1991, the EBRD is a multilateral developmental investment bank that initially focused on countries of the former Soviet Eastern bloc, but over time it expanded to support development in 30 countries from Europe to Central Asia.

Potential partnerships between the two banks have attracted great attention from industry experts, although they could only speculate on the effects of future cooperation at this stage.

Hou Zhenbo, a researcher of the London-headquartered think tank Overseas Development Institute, said the overlap between the two, given what we know so far, would probably be infrastructure projects in Central Asia and former Soviet republics, although it is "difficult for us to speculate how large these sets of investments would be in the future".

Christopher Bovis, a professor of business law at the Business School of the University of Hull in Yorkshire, England, said that the EBRD's investment partnership with the AIIB could help to develop and continuously expand a pipeline of public private partnership projects on the basis of a clearly defined eligibility framework.

The European Regional Development Fund would carry out the due diligence and financial appraisal in the structuring phase and monitor the project thereafter. The fund may also be prepared to act as the controlling creditor according to principles to be established by agreement with market participants, Bovis said.

"The AIIB and the ERDF would share the risk of the losses of the project portfolio. The ERDF risk would be ring-fenced and its participation therefore capped at an agreed annual budgetary amount.

"The ERDF would be covering the residual risk up to its maximum exposure on any individual transaction. The risk-taking of the AIIB on the other hand, would be compensated via a risk premium charged up front to the project entity at the time of agreement.

"This premium will be priced to reflect the subordinated status of the credit line and the associated risks for the ERDF as well as covering expected management and other costs," Bovis said.

Chakrabarti said that because both the EBRD and the AIIB have similar financing structures and goals, they can jointly invest in projects and share revenue based on percentage shares. In addition to debt financing, he said, the two banks can also work together on equity financing.

In particular, opportunities exist in the municipal infrastructure investment sector－for example, in waste, water management, public transportation and street lighting, Chakrabarti said.

"Equity investment, in our view, will allow us to use our expertise to help a company become more comfortable and effective on the ground. As an equity investor, we would typically have a position on the board of a company, and we can then cooperate with the company to make it better," he said.

 

[IR-TR]

A Eurasian Infrastructure and Investment Bank? Hmmm

 

[TaiShang]

@ahojunk

Australia commits 718 mln USD for China-initiated bank
2015-6-24 13:27:16

Australian government officially announced on Wednesday that the country will become a founding member of the China-proposed Asian Infrastructure Investment Bank (AIIB) with a contribution of 930 million AU dollars (718 million US dollars) as paid-in capital to the bank.In a joint statement, Minister for Foreign Affairs and Trade Julie Bishop and Treasurer Joe Hockey said the decision to join the AIIB comes after "extensive discussions between the government, China and other key partners around the world".

Australia will be the sixth largest shareholder, said the statement.

The AIIB will have paid-in capital of 20 billion US dollars with total authorized capital of 100 billion US dollars.

The statement noted that there is an estimated infrastructure financing gap of around 8 trillion US dollars in the Asian region over the current decade. "The AIIB will be part of the solution to closing this gap," it said.

The two ministers said in the statement that joining the AIIB presents Australia with great opportunities to work with Australia's neighbors and with its largest trading partner, China, to drive economic growth and jobs.

They noted that the AIIB will work closely with the private sector, paving the way for Australian businesses to take advantage of the growth in infrastructure in the region.

As for the governance of the AIIB, the statement said it will be based on best practice, ensuring that all members will be directly involved in the direction and decision making of the bank in an open and transparent manner.

"We look forward to working with other members to lay the foundations for an effective new multilateral institution which is expected to be operational by the end of the year," the statement said.

Treasurer Joe Hocky will attend the AIIB's Articles of Agreement signing ceremony in Beijing on Monday June 29.

 

[ahojunk]

@ahojunk

Australia commits 718 mln USD for China-initiated bank
2015-6-24 13:27:16

Australian government officially announced on Wednesday that the country will become a founding member of the China-proposed Asian Infrastructure Investment Bank (AIIB) with a contribution of 930 million AU dollars (718 million US dollars) as paid-in capital to the bank.In a joint statement, Minister for Foreign Affairs and Trade Julie Bishop and Treasurer Joe Hockey said the decision to join the AIIB comes after "extensive discussions between the government, China and other key partners around the world".

Australia will be the sixth largest shareholder, said the statement.

The AIIB will have paid-in capital of 20 billion US dollars with total authorized capital of 100 billion US dollars.

The statement noted that there is an estimated infrastructure financing gap of around 8 trillion US dollars in the Asian region over the current decade. "The AIIB will be part of the solution to closing this gap," it said.

The two ministers said in the statement that joining the AIIB presents Australia with great opportunities to work with Australia's neighbors and with its largest trading partner, China, to drive economic growth and jobs.

They noted that the AIIB will work closely with the private sector, paving the way for Australian businesses to take advantage of the growth in infrastructure in the region.

As for the governance of the AIIB, the statement said it will be based on best practice, ensuring that all members will be directly involved in the direction and decision making of the bank in an open and transparent manner.

"We look forward to working with other members to lay the foundations for an effective new multilateral institution which is expected to be operational by the end of the year," the statement said.

Treasurer Joe Hocky will attend the AIIB's Articles of Agreement signing ceremony in Beijing on Monday June 29.

@TaiShang
Thank you for tagging me.

Yes, Australia committed to the AIIB by contributing US$718 million which equates to AUD $930 million.
That's a lot of money but only allows Australia to be the sixth largest shareholder.
I hope all founding member countries will commit and contribute their share asap.
Only then the AIIB can be up and running by the end of 2015.

 

[TaiShang]

@TaiShang
Thank you for tagging me.

Yes, Australia committed to the AIIB by contributing US$718 million which equates to AUD $930 million.
That's a lot of money but only allows Australia to be the sixth largest shareholder.
I hope all founding member countries will commit and contribute their share asap.
Only then the AIIB can be up and running by the end of 2015.

I wonder if there is a built-in timeline/deadline for the pledged funds to be actually deposited.

 

[IR-TR]

Those Aussies are surprisingly pragmatic. They are embracing China like nobody's business. I would have thought them to be a lot more like Japan, or even worse. Guess they know where the future lies.

 

[TaiShang]

The prospective founding members of the AIIB are set to sign the bank's Articles of Agreement on June 29, 2015 in Beijing. President Xi Jinping will meet with the heads of the delegations, said the Foreign Ministry.

 

[ahojunk]

Great! Things are moving along for AIIB.

----------------
[Bank] Constitution to lay cornerstone for AIIB
2015-06-27 06:29 | Xinhua | Editor: Mo Hong'e

Representatives of 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) will meet in Beijing next Monday to sign the constitution of the bank, creating a legal framework for the existence of the entity.

"This will be a significant event. The constitution will lay a solid foundation for the establishment and operation of the AIIB," said Chinese Finance Minister Lou Jiwei.

All parties have agreed on the AIIB's objectives, membership, stakes, voting power, operations, governance and decision-making mechanism. Prospective members hammered out the constitution in Singapore last month. When signed, the document will be subject to legal and parliamentary ratification in all member countries before it becomes active.

"The signing of the constitution means that preparations are almost complete," said Liu Dongmin of the Chinese Academy of Social Sciences.

"If everything goes to plan, the AIIB will start operation by the end of 2015," said Chen Fengying, a researcher with the China Institute of Contemporary International Relations.

The AIIB will have three tiers of governance: a board of governors, a board of directors and executives. The governors have the supreme power in the bank. The directors, who are non-standing, convene to make decisions. Executives will take care of routine work.

"Some international organizations have too much bureaucracy. The AIIB has a streamline structure that might increase efficiency," said Tang Min, member of a government think tank who previously worked for the Asian Development Bank.

The AIIB will recruit personnel in a transparent and open manner and be zero tolerant of graft or fraud. Members will contribute to the lender largely according to GDP and enjoy a voting power accordingly. Details will probably become available on Monday.

China first proposed the AIIB in 2014 with the aim of financing infrastructure. Many countries do not have the capacity to fund the infrastructure upgrades they need. So far, 57 countries have agreed to join the AIIB.

All parties are working closely on a list of investment projects and trying to make the first AIIB investment "a very successful one", according to the Chinese finance minister.

"The AIIB will be headquartered in Beijing. As the host country, China will provide reliable and strong support," said Lou.

 

[Edison Chen]

China's new bank will start taking concrete shape this week - Business Insider
Arun Jaitley to skip FMs meet to sign agreement on AIIB in Beijing - The Economic Times
Indonesia to be eighth-largest AIIB shareholder with $672 million stake - The Economic Times
AIIB members set to sign Articles of Agreement in Beijing - CCTV News - CCTV.com English

I can't believe it's so fast! China speed.

Where is TPP? In your dreams.

 

[TaiShang]

I can't believe it's so fast! China speed.

Exactly, it is China speed.

Now think in the larger context of the One Belt One Road, Brics Bank, The Silk Road Fund, and the AIIB.

Massive undertaking by China's diplomacy. Not an easy feat.

 

[TaiShang]

Signing ceremony for AIIB to be held today in Beijing
June 29, 2015

A signing ceremony for the official creation of the Asian Infrastructure Investment Bank is going to be held later today in Beijing.

President Xi Jinping is scheduled to meet the heads of the delegations representing the prospective founding members of the bank.

A meeting of finance ministers of the 57 countries involved is also scheduled to take place.

Written remarks by Chinese premier Li Keqiang, who is now in Europe, will be delivered during the meeting.

The China-proposed bank is expected to begin operating later this year with start-up capital of around 100-billion U.S. dollars.

 

[TaiShang]

AIIB agreement signed, China-led bank takes key step forward
2015-06-29

BEIJING, June 29 (Xinhua) -- A China-initiated multilateral bank that has dominated media headlines for months took a key step forward on Monday, with the signing of an agreement that outlines the framework and management structure for the institution.

Representatives of the 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) gathered in Beijing for the signing ceremony in the Great Hall of the People. Australia was the first country to sign the document. @ahojunk

The 60-article agreement specified each member's share as well as the governance structure and policy-making mechanism of the bank, which is designed to finance infrastructure in Asia.

Seventy-five percent of the bank's share is distributed among Asian and Oceanian countries while the remaining 25 percent is assigned to countries outside the region. As the bank expands its membership, countries outside of the region can expand their stake, but the portion cannot exceed 30 percent. Each member will be allocated a share of the quota based on the size of their economy.

China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent, 6.66 percent stake, respectively. Their voting shares are calculated at 26.06 percent, 7.5 percent and 5.92 percent.

China's stake and voting share in the initial stage are a "natural outcome" of current rules, and may be diluted as more members join, China's Vice Finance Minister Shi Yaobin said in an interview with Xinhua.

"China is not deliberately seeking a veto power," Shi stressed.

Being the largest shareholder does not mean China will have veto power over major issues. Instead, China will closely watch and balance other members' interests, said Tang Min, with Counselors' Office of the State Council, who previously worked for the Asian Development Bank (ADB).

Speaking at Monday's ceremony, Finance Minister Lou Jiwei said the new bank will uphold high standards and follow international rules in its operation, policies and management to ensure efficiency and transparency.

The bank, headquartered in Beijing, will possibly set up regional offices in other countries. It will be led by a president with a five-year term that can be extended once.

The articles do not say who will be the president, but said the president will be chosen from Asian member countries using an "open, transparent and excellent" selection process.

Jin Liqun, former vice finance minister of China, is secretary-general of the interim multilateral secretariat for establishing the AIIB.

After signing the agreement, representatives from prospective founding countries will return home with the document for legal adoption.

The AIIB was proposed by President Xi Jinping in October 2013. A year later, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore, signed an agreement to establish the bank.

After the new bank garnered support from countries like Britain and Germany, much focus has been trained on whether the U.S. and Japan, the world's largest and third largest economies, will join.

While stating that the U.S. will not join the AIIB at present, U.S. President Barack Obama said the country looked forward to collaborating with the new development bank "just like we do with the Asia Development Bank and with the World Bank"in April.

Despite outside worries that a new investment bank will challenge the established order of multilateral lenders, the IMF, World Bank and other leading global lenders have welcomed collaboration with the new bank to fill Asia's infrastructure gap.

Statistics from the ADB show that between 2010 and 2020, around 8 trillion U.S. dollars in investment will be needed in the Asia-Pacific region to improve infrastructure.

"We view the AIIB as an important new partner that shares a common goal: ending extreme poverty. With strong environment, labor and procurement standards, the AIIB will join us and other development banks in addressing the huge infrastructure needs that are critical to ending poverty, reducing inequalities, and boosting shared prosperity," World Bank Group President Jim Yong Kim said in a statement after the signing ceremony.

Chinese officials have reiterated that rather than being a competitor, the new bank will complement the current international economic order and enable China to take more global responsibility.

The bank will start operation at the end of the year under two preconditions: At least 10 prospective members sign the agreement and the initial subscribed capital is no less than 50 percent of the authorized capital.

"We are confident of working with related parties to accelerate legal procedures and push for the official set up of the AIIB before the year end," Lou said.

TIMELINE

October 2013, Chinese President Xi Jinping proposed the bank.

October 2014, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore signed an agreement to establish the bank.

March 12, 2015, Britain applied to join the AIIB as a prospective founding member, the first major western country to do so.France, Italy and Germany quickly followed suit.

March 31, 2015, China announced that 57 countries joined or applied to join the AIIB as prospective founding members before the deadline.

Until May, five rounds of talks were held and consensus was reached on all key elements, such as the bank's purpose, membership, capital subscription, voting powers and decision-making structures.

June 29, 2015, delegates of the 57 prospective founding countries of the AIIB gathered in Beijing for the signing ceremony of an agreement to lay the legal framework and management structure for the bank.

Related:

Key legal framework laid for China-initiated AIIB

BEIJING, June 29 (Xinhua) -- Delegates of the 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) on Monday gathered in Beijing for the agreement signing ceremony, which will lay the legal framework for the China-initiated multilateral institution. Full story

Xinhua Insight: AIIB -- the green investment bank?

GUIYANG, June 28 (Xinhua) -- At an eco forum in southwest China, one important player is drawing much attention from environment organizations, researchers and business people, despite being absent.

The Asian Infrastructure Investment Bank (AIIB) has not even been officially founded. Its 57 prospective founders will meet in Beijing Monday to sign its charter in anticipation of beginning formal operations by the end of the year. Full story

News Analysis: Constitution to lay cornerstone for AIIB

BEIJING, June 26 (Xinhua) -- Representatives of 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) will meet in Beijing next Monday to sign the constitution of the bank, creating a legal framework for the existence of the entity.

"This will be a significant event. The constitution will lay a solid foundation for the establishment and operation of the AIIB," said Chinese Finance Minister Lou Jiwei. Full story

Nepal's Finance Minister leaves for Beijing to sign AIIB Constitution

KATHMANDU, June 28 (Xinhua) -- Nepal's Finance Minister Ramsharan Mahat left for China on Sunday morning to sign the constitution of the Asian Infrastructure Investment Bank (AIIB).

"The AIIB will be the new source of capital in the country's rebuilding," Mahat told reporters in Kathmandu earlier.