What's new

AIIB (Asian Infrastructure Investment Bank) news

As expected, there is a lot of news on AIIB lately.

-------
AIIB board of governors holds inaugural meeting
By Zhang Yue (chinadaily.com.cn)
Updated: 2016-01-16 17:11

View attachment 287669
Attendees take smartphone photos of a sculpture following the opening ceremony of the Asian Infrastructure Investment Bank in Beijing, China, Jan 16, 2016. [Photo/Agencies]

The inaugural meeting of the Board of Governors of the Asian Infrastructure Investment Bank (AIIB) was held at the Diao Yutai guest house on Saturday afternoon. Chinese premier Li Keqiang addressed the meeting.

"The inaugural meeting of the AIIB board of governors means that the AIIB is now officially coming into operation as an Asia-based multilateral finance institution, and this is of great significance in the transition of world economic governance," Li said during the speech.

He said that Asia, as a place with large potential of economic development and which shows vivid momentum of growth, will continue to be the engine of economic development worldwide. As the world economy is still in very weak recovery, Asia should fully play its role as an engine efficiently, which requires countries in Asia to have well-facilitated infrastructure as well as good communication.

During his speech, he mentioned about his meeting with Suma Chakrabarti, president of the European Bank for Reconstruction and Development, on Friday, which also marks China officially joining the EBRD. Li said that such cooperation with other multilateral financial institutions will be increasingly important in the future. The AIIB will also provide a new platform for developing countries to enlarge economic cooperation, and provide better opportunities for North-South cooperation.

Chinese finance minister Lou Jiwei presided over the inaugural meeting. Lou was elected as the AIIB's first chairman of the AIIB board of governors during the AIIB inaugural ceremony in the morning. Indonesian finance minister Bambang P.S. Brodjonegoro and German finance state secretary Thomas Steffen, were both elected vice-chairmen of the AIIB board of governors, and spoke at the meeting.

The inaugural meeting started with a group photo session with the representatives of the 57 founding member countries of AIIB and Premier Li Keqiang. Jin Liqun, the newly elected president of AIIB, signed the cooperation agreement with the Beijing municipal government as the city will be where the AIIB headquarters is located.

The AIIB is designed to have a board of governors, a board of directors, and senior management. The board of governors is the bank's top decision-making body.

Contact the writer at zhangyue@chinadaily.com.cn

More pics at the inaugural meeting of board of governors:

20160117100337776.jpg
20160117100334210.jpg
20160117100335539.jpg
 
. .
The $100 billion AIIB opens for business: Will China's multilateral ambitions soar or sour?
19 January 2016 10:42AM

The China-led Asian Infrastructure Investment Bank (AIIB) officially opened for business on 16 January after a sufficient number of countries formally approved the bank’s Articles so it could formally be declared a legal entity.

image.jpg


Chinese President Xi Jinping said the AIIB launch was an ‘historical moment’ and China’s Finance Minister, Lou Jiwei, said it marked the reform of the global economic governance system. An article by Teymoor Babili in Al Jazeera claimed the AIIB would reshape the economic and trading status in Asia.

The establishment of the AIIB is significant, but not because it will soon dominate infrastructure financing in Asia; indeed it plans to lend only US$1.5 billion this year. Rather, its importance lies in the fact that it shows China is increasing its imprint on the global economic order.

When China first proposed the AIIB, it was viewed by some as a challenge to US international economic leadership and the western dominated multilateral development banks (MDBs).

Framing the AIIB in terms of rivalry between the US and China makes a compelling narrative. And the AIIB was a diplomatic disaster for the US when it failed to convince some key allies not to join the bank. But China did not propose the AIIB to challenge the role and significance of the US. It was the ham-fisted US response that turned the issue into a question of US influence.

It is also misleading to view the AIIB as largely the result of China’s dissatisfaction with the slow progress of governance reform in the existing MDBs. China is underrepresented in these banks, it wants a bigger say and is disillusioned with the slow pace of reform. But even if there had been faster progress in reforming the MDBs, China would still have established the AIIB.

It is directly in China’s interests to have a multilateral body focused on Asia’s infrastructure needs. The AIIB has to be seen in the context of President Xi’s signature foreign economic policy; the One Belt, One Road initiative. It is no coincidence that the AIIB was simultaneously announced with One Belt, One Road. Advancing the connectivity between Asia and Europe involves investing in the infrastructure of many countries in Asia,

Viewed in isolation, committing resources to a multilateral bank could be seen to limit China’s freedom to finance infrastructure projects in Asia. But multilateralising financing decisions can insulate China from the political tension and push-back that can come from bilateral financing. Countries may be more accepting to financing from a multilateral institution, even if it led by China, than directly from China. Moreover a high quality multilateral bank will be positive for China’s image in the region.

The irony is that while a large part of the initial reaction to the AIIB was a concern that it would not meet the governance standards of existing MDBs, it is very much in China’s interest to ensure the AIIB truly is a multilateral and not a Chinese dominated institution.

Progress so far in establishing the AIIB has been sound and China deserves credit. The Articles largely mirror those of the other MDBs and the first AIIB President, Jin Liqun, has indicated that the AIIB will be a 'sibling' and not a rival to the other MDBs. It is important that the AIIB meets the standards of the MDBs, particularly in terms of environmental and social safeguards, but this does not mean it has to be a replica of the other banks. AIIB members should use the opportunity provided by the creation of a new bank to demonstrate how the efficiency of the existing MDBs can be improved.

The AIIB President is wisely taking a cautious approach to establishing the bank. It will be under intense international scrutiny and all the credit China has gained will be lost if there is any suggestion that the concerns of those who opposed it were being realised and it was a China dominated body. The AIIB President has appropriately indicated that in its establishment phase the bank will draw on the expertise of the existing MDBs and focus on co-financing arrangements. He has also said the need to attain a high credit rating and issue dollar denominated bonds will initially constrain the AIIB’s leverage ratio and project selection. This is appropriate.

But this conservative approach may mean the AIIB does not expand as fast as China may have hoped. China will have to resist the temptation to seek a dominant influence over a bank it created and is by far the largest shareholder in.

The success of an MDB depends on the quality, rather than the quantity of its lending. Even with a capital base of $US100 billion, the AIIB can only hope to make a small contribution to meeting Asia’s vast infrastructure needs through direct lending. If the AIIB wants to have a sizeable impact, it should focus on helping countries access private financing. This will involve helping countries enhance their infrastructure project selection and preparation as well as improving their investment environments. The AIIB could make a significant contribution by specialising in accumulating expertise and sharing experience in complex infrastructure investments.

It is important to ensure that the AIIB is a success. If China demonstrates that it can successfully establish and lead a multilateral bank, this may encourage China to take further multilateral initiatives. This would not only be in China’s interest, it would benefit the global economy.
 
. .
Great step towards Asian solidarity, Initiated by Beijing.. What are the reasons for the stalling of Taiwan's application though ? And Japan might be missing the ship here
 
.
Sri Lanka to obtain membership of Asian Infrastructure Bank with USD 268mn | Lanka Business Online

Asian-Infrastructure-Investment-Bank.jpg


Jan 21, 2016 (LBO) – The Cabinet has approved the draft bill to enable Sri Lanka to obtain the formal membership of the Asian Infrastructure Investment Bank through ratification of the required agreement.

Sri Lanka has signed the agreement as an initial member to establish this bank on 29 June 2015 in Beijing, China.

57 countries comprised of 37 countries in the region and 20 countries out of the region have pledged support for the bank.

The bank will have an authorized capital of 100 billion US dollars which will be contributed 75 percent by regional countries and the balance 25 percent by countries outside the region.

A quota is allocated to each country depending on their GDP. Sri Lanka will have to subscribe to around 268 million US dollars.

The Cabinet has also approved to join the ‘Group G’ led by Indonesia to form a constituency of the Asian Infrastructure Investment Bank.

The main objective of the infrastructure bank is to develop infrastructure and to enhance the relationship in the Asian region.
 
.
This is good. Common sense prevails!

-------
AIIB to Abstain From Involvement in Projects in Disputed Areas - President
00:10 23.01.2016

AIIB.1033490614.jpg

The China-led Asian Infrastructure Investment Bank (AIIB) will not be involved in any projects in disputed areas, the bank's head, Jin Liqun, said Friday.

BEIJING (Sputnik) — The bank president said that the financial institution took decisions on the basis of financial and economic considerations but not political ones.

"Our articles of the agreement clearly state that AIIB will not participate in any project in disputed areas. We are very attentive to the needs, requirements and interests of borrowing countries that are party to the bank," Jin said.

AIIB, with 57 founding member countries and $100 in initial capital, is seen as a rival to Western-dominated institutions such as the World Bank and the International Monetary Fund.

The bank formally launched operations on January 16.
 
.
This is good. Common sense prevails!

-------
AIIB to Abstain From Involvement in Projects in Disputed Areas - President
00:10 23.01.2016

View attachment 289121
The China-led Asian Infrastructure Investment Bank (AIIB) will not be involved in any projects in disputed areas, the bank's head, Jin Liqun, said Friday.

BEIJING (Sputnik) — The bank president said that the financial institution took decisions on the basis of financial and economic considerations but not political ones.

"Our articles of the agreement clearly state that AIIB will not participate in any project in disputed areas. We are very attentive to the needs, requirements and interests of borrowing countries that are party to the bank," Jin said.

AIIB, with 57 founding member countries and $100 in initial capital, is seen as a rival to Western-dominated institutions such as the World Bank and the International Monetary Fund.

The bank formally launched operations on January 16.

Very good move :yahoo::yahoo:
 
.
China-Led Development Bank AIIB Will be Lean, Clean and Green, Says its President
Jin Liqun said the new lender will set itself apart from other similar institutions

BN-MF607_aiibda_M_20160122105528.jpg


By Lingling Wei
Jan. 22, 2016 11:25 a.m. ET

DAVOS, Switzerland—The president of a new China-led development bank said the lender aims to set itself apart from other similar institutions with a more efficient structure, strong governance and a focus on environmental-friendly projects.

The Asian Infrastructure Investment Bank, which was inaugurated this past weekend, will be “lean, clean and green,” said Jin Liqun, head of the bank, at the World Economic Forum on Friday.

The bank, known as the AIIB, is starting out with $100 billion in capital and was conceived a little more than two years ago by Beijing as China’s answer to the World Bank and Asian Development Bank, institutions dominated by Washington and Tokyo, respectively. The bank has delivered a foreign-policy coup for China by attracting 57 founding members, far more than expected, including such U.S. allies as the U.K., Germany, France and Australia.

Chinese officials have said the new bank will complement and improve on, rather than upend, the global order in which it is a stakeholder. Still, many political analysts say a jockeying for influence with Washington has been a main force behind AIIB. The new bank also comes as Chinese President Xi Jinping is ramping up an ambitious plan to finance and build roads, ports and other infrastructure throughout Asia—in an initiative known as One Belt, One Road. Some critics say the bank could be used by Beijing to advance its own goals.

“AIIB was not created to finance One Belt, One Road,” said Mr. Jin, a well-respected former official at China’s Finance Ministry. Still, the lender may find itself providing funding to projects in the same countries as outlined in the One Belt, One Road initiative.

“We do want to strike a proper balance between many countries and sectors,” Mr. Jin added.

As the bank begins its operations, analysts say Mr. Jin, who has also worked at the World Bank and the Asian Development Bank, will need to show it can operate without employing some of the practices that have undercut China’s reputation at home, such as corruption and environmental blight.

“I’m a Chinese national. I’m certainly aware of those concerns,” said Mr. Jin, who speaks flawless English and often quotes Western literature. He pointed to his previous experiences at the Finance Ministry, the World Bank and the Asian Development Bank. During those years, Mr. Jin said, “not a single person in our department was engaged in corruption.”

The bank, which will start out co-financing existing World Bank and Asian Development Bank projects, plans to lend some $1.5 billion this year.

Mr. Jin said AIIB won't be involved in any projects in “disputed areas” and will be “sensitive” to the needs and demands from different countries.

“AIIB is an apolitical institution,” he said. “But to be apolitical, you have to be politically sensitive.”
 
.
Jin Says AIIB May Lend $2 Billion, Announce Projects in June
Bloomberg News
January 22, 2016 — 8:48 PM AEDT
  • AIIB plans to raise $300 million to $500 million in bond sales
  • China-led development bank formally opened Sunday in Beijing
Asian Infrastructure Investment Bank President Jin Liqun said the new China-led institution is planning to lend at least $2 billion to different projects in 2016 and may announce the first batch of investments around June.

The AIIB will seek to raise $300 million to $500 million by selling bonds in April or May, Jin said in an interview Friday on the sidelines of the annual World Economic Forum in Davos, Switzerland.

There are 30 to 40 nations waiting to join the AIIB, which could push membership to about 100 countries from the founding 57, Jin said earlier in a Bloomberg Television interview. He added that it’s not good to push countries to join the lender if they aren’t ready.

Jin worked at the World Bank and the Asian Development Bank on China’s behalf, and was a former monetary policy committee member and supervisory chairman of China’s sovereign wealth fund. The AIIB formally opened its doors this month in Beijing, a key economic milestone for President Xi Jinping and his goal for China to achieve the same great-power status enjoyed by the U.S. The U.S. and Japan haven’t joined AIIB.

Jin said China’s stock market, which is in a bear market for the second time in seven months, needs to be broader and deeper. He said the country is moving to a new stage of development and must deal with that challenge after 35 years of fast economic growth.

The U.S. economy is "picking up," Jin said, and it wasn’t a mistake for the Federal Reserve to raise interest rates last month after keeping them near zero for seven years.
 
. . .
New China-led bank 'will be inclusive'

President of AIIB says Beijing will not use veto power and pledges 'lean, clean and green' governance

Jin Liqun often starts work at 7 am and leaves the office at 7 pm. After a grueling day's work, he has dinner and walks for an hour in a park beside his Beijing home.

And he is still not done. He then burns the midnight oil, reading documents before bed.

No wonder travel provides some relief. The 67-year-old says he retires to his hotel room soon after the day's work is done and indulges in what he calls a luxury: Adequate sleep.

"Having enough sleep is crucial to staying healthy while working under tremendous work pressure," said Jin, president of the newly established 57-member Asian Infrastructure Investment Bank during a recent interview with China Daily at the annual meeting of World Economic Forum in Davos.

While preparing for the launch of China-led AIIB, Jin says he read every word in all the documents written by experts and gave his opinion.

"Some may say I like micromanagement but at the first stage of launching such an institution, I have to know every detail. Once we put our articles of agreement, policies, regulations and sound governance in place, we can rely on professionals for implementation."

While absorbing the experiences and lessons in conceptualizing President Xi Jinping's idea of setting up a multilateral development bank, Jin says the AIIB is in many ways different from the World Bank and the Asian Development Bank, where he has a long track record.

First, Jin says, the AIIB is inclusive and open, and China has no intention of exercising its "veto power" despite the fact that it has that right because of the country's economic size and shareholding.

"There are still many countries on the waiting list (to join the bank) and when the new members come in, China's voting power will be diluted. As such, the de facto veto power will be gone over time," says Jin.

AIIB was set up in January in Beijing after two years of negotiations to decide membership, governance structure and basic policy stance. Members agreed on crucial decision-making processes by introducing a "fixed" special majority, which consists of two-thirds of the members representing three-fourths of voting rights.

China, the largest AIIB shareholder, has 26.6 percent of voting rights, which are determined by the size of its economy, says Jin. "We will not increase the special majority to just keep China's veto power intact."

Jin says this is a major difference compared with older institutions such as the World Bank, in which the United States has always retained veto power by amending the articles of agreement, increasing the special majority when its voting power went down as new members joined.

When the World Bank began operations, the US had 25 percent voting rights, which gave it veto power. And when the voting rights decreased to 20 percent, the World Bank increased the special majority to 81 percent. And now with its voting rights at 16.6 percent, the special majority is 85 so that the US continues to wield veto power.

"In the new era of changing international circumstances, China should not approach it this way," says Jin. "This is how China shows its sincerity."

To show the bank's inclusiveness and openness, Jin says, China always asks three questions to frame the mechanisms for decision-making.

"If most of the shareholders don't like it, why do you insist? If most of the countries oppose it, why do you want to do it? And if most countries like it, why do you oppose it?"

Jin says when China mooted the idea of setting up the AIIB, there were many doubts and concerns, but it is now welcomed by many countries. "This is the process of China gaining credibility and building up mutual trust by collective consultation and making decisions through democratic approaches."

He says the inauguration of the AIIB is just the first step in a long journey, and the most important thing is to turn plans into reality by meeting the infrastructural demands of countries in need.

He says the AIIB aims to recruit 100-150 professionals worldwide this year. "There is no rush to expand and we need to hunt for qualified talent and experts carefully. The AIIB currently has about 50 staff members.

Emphasizing his concept of keeping AIIB being "lean, clean and green", Jin says the bank is determined to cut red tape and reduce bureaucracy.

Unlike the World Bank or the Asian Development Bank, which sometimes set up offices in countries where they are involved, the AIIB will borrow from the experience of the private sector and assign experts and staff for each project.

"When there are projects in a country, we send our staff; and when the projects finish, we leave."

When the number of projects increases in a region or country, Jin says it is likely the bank will set up a regional hub or liaison office. "But we will avoid duplication between headquarters and regional hubs in decision-making."

Jin also stresses that the institution will have zero tolerance toward corruption, even with some doubting whether it is possible to achieve that in a China-led multilateral development bank.

According to him, one Western stereotype goes this way: If there is corruption in other institutions, they say, "well, it happens". And if it happens in a China-led institution, they say, "I told you so".

Jin says not everybody or every organization is corrupt.

For example, he says, after his stint in the Work Bank in the 1990s, he started to supervise $50 billion worth of projects financed by the World Bank and the ADB.

"There was not a single case of corruption when I was in charge of those projects. First of all, I myself must be clean and then I can ask others to follow."

http://europe.chinadaily.com.cn/business/2016-01/29/content_23315088_3.htm
 
.
5 vice presidents with two from Europe, why?

---------
AIIB appoints senior leadership team
2016-02-05 16:15 | Xinhua | Editor: Gu Liping

The Asian Infrastructure Investment Bank (AIIB) appointed five vice presidents with work experience in both developed and emerging economies as well as multilateral institutions on Friday.

The new development bank appointed Danny Alexander, who was chief secretary to the UK Treasury from 2010 to 2015, as vice president and corporate secretary, according to an AIIB press release.

Kyttack Hong, chairman and CEO of the Korea Development Bank, will serve as vice president and chief risk officer.

D.J. Pandian, another vice president who had an extensive career spanning 30 years with the Indian Administrative Services, will also be the bank's chief investment officer.

Joachim von Amsberg, currently vice president of development finance at the World Bank, will serve as the AIIB's vice president of policy and strategy.

The bank also appointed Luky Eko Wuryanto, who has served in senior positions in the Indonesian government for 20 years, as vice president and chief administration officer.

AIIB President Jin Liqun, former vice finance minister of China, said the leadership team is "an exceptionally strong and committed group who will bring wide and varied experience and a wealth of expertise that will serve the bank well".

Proposed by China, the AIIB aims to support infrastructure projects in Asia and has 57 prospective founding members with an authorized capital of 100 billion U.S. dollars.

The bank was formally established in Beijing in December 2015 and started operation in January. Chinese Finance Minister Lou Jiwei was elected as the first chairman of the AIIB board of governors.
 
.
5 vice presidents with two from Europe, why?

---------
AIIB appoints senior leadership team
2016-02-05 16:15 | Xinhua | Editor: Gu Liping

The Asian Infrastructure Investment Bank (AIIB) appointed five vice presidents with work experience in both developed and emerging economies as well as multilateral institutions on Friday.

The new development bank appointed Danny Alexander, who was chief secretary to the UK Treasury from 2010 to 2015, as vice president and corporate secretary, according to an AIIB press release.

Kyttack Hong, chairman and CEO of the Korea Development Bank, will serve as vice president and chief risk officer.

D.J. Pandian, another vice president who had an extensive career spanning 30 years with the Indian Administrative Services, will also be the bank's chief investment officer.

Joachim von Amsberg, currently vice president of development finance at the World Bank, will serve as the AIIB's vice president of policy and strategy.

The bank also appointed Luky Eko Wuryanto, who has served in senior positions in the Indonesian government for 20 years, as vice president and chief administration officer.

AIIB President Jin Liqun, former vice finance minister of China, said the leadership team is "an exceptionally strong and committed group who will bring wide and varied experience and a wealth of expertise that will serve the bank well".

Proposed by China, the AIIB aims to support infrastructure projects in Asia and has 57 prospective founding members with an authorized capital of 100 billion U.S. dollars.

The bank was formally established in Beijing in December 2015 and started operation in January. Chinese Finance Minister Lou Jiwei was elected as the first chairman of the AIIB board of governors.


I think China really wants to get Europe involved because the OBOR is essentially a Eurasianist project and the AIIB is an important leg of it.

***

China vows win-win cooperation between OBOR, Juncker plan
Xinhua, February 18, 2016

China vowed to take efforts with Europe to make the synergies between the country's ambitious One Belt One Road (OBOR) initiative and the EU's (European Union) 315-billion-euro investment plan a win-win cooperation.

"It is highly encouraging that China and the EU are getting to grips with the enormous possibilities and opportunities presented by the One Belt One Road initiative," Yang Yanyi, head of Chinese Mission to the EU, told Xinhua.

The "Belt and Road" initiative, proposed by Chinese President Xi Jinping in 2013, was widely viewed as a major strategic move for China as it seeks to link China with Europe through central and western Asia via the New Silk Road Economic Belt and connect China with southeast Asian countries, Africa and Europe through the 21st Century Maritime Silk Road.

China and the EU declared to build synergies between the initiative and the European Commission President Jean-Claude Juncker's investment plan during the seventeenth China-EU summit in last June. Three months later during a high-level economic dialogue, Brussels announced that China became the first non-EU country to announce contribution to the Juncker Plan.

This year continued to witness progress on cooperation between the two projects, particularly in prioritized areas including connectivity, financing and digital economy, Yang told a workshop in European Parliament on Wednesday.

With infrastructure as a part of great significance both in One Belt One Road initiative and the Juncker Plan, Beijing and Brussels agreed to further improve their infrastructure links.

In January, the first working group meeting of China-EU connectivity Platform was convened as a follow-up to the MOU on the establishment of EU-China connectivity platform.

They agreed to share information, promote seamless traffic flows and transport facilitation, develop synergies between relevant initiatives and projects, identify cooperation opportunities between respective policies and sources of funding.

The two sides will work to "actively explore business and investment opportunities" and create a favorable environment for sustainable and inter-operable cross-border infrastructure networks in countries and regions between China and the EU, said Yang.

On financing, China has already made public and motivated its interest in participating in the European Fund for Strategic Investment, a core fund worth up to 21 billion euros functioning as the main channel to mobilize the Juncker Plan.

The two sides have so far held three meetings of technical working group on China-EU Cooperation on Investment. During the latest one in January, experts from China's Silk Road Fund, designed in part to foster investment in countries under the One Belt One Road initiative, the European Commission, and the European Investment Bank exchanged views on co-investment vehicle.

"Both sides are committed to developing concrete opportunities for China to invest in the investment plan for Europe," the ambassador said.

On digital economy, the two sides sought to achieve a better synergy between Europe's digital agenda and China's Internet Plus strategy and to benefit the 1.1 billion Internet users in both China and the EU.

They signed a key partnership on 5G telecommunications in September and now, according to Yang, were taking steps to deepen dialogues and cooperation in areas of information and communications technology.

Yang said China's One Belt One Road initiative was "very straightforward", aiming to forge closer economic ties, deepen co-operation and expand development in the Eurasian region, and build a community of common interest.

Under this initiative, "either building a network of road or high speed rail will not just be a matter of financing, rather it calls for local players, communities, national and local governments to participate meaningfully and in a way," Yang noted.

Thus, "only a shared sense of dignity and collectivism could underpin the mutual benefit and trust that promotes sustainable long term cooperation in any domain."

The ambassador called for joint efforts from the EU side for further cooperation. "Only through win-win cooperation can we make big and sustainable achievements that are beneficial to all," she said.
 
.

Pakistan Defence Latest Posts

Pakistan Affairs Latest Posts

Back
Top Bottom