Asian Infrastructure Investment Bank
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| Abbreviation | AIIB |
|---|---|
| Formation | 24 October 2014 |
| Type | Regional organization |
| Legal status | Treaty |
| Purpose | Crediting |
| Headquarters | Beijing, China |
Region served | Asia |
Membership | 57 (2 applying) (2015-04-15 UTC+8 12:00) |
Secretary General | Jin Liqun |
Main organ | The Multilateral Interim Secretariat (the Secretariat)[1] |
| Website | aiibank |
| Asian Infrastructure Investment Bank | |||||||
|---|---|---|---|---|---|---|---|
| Simplified Chinese | 亚洲基础设施投资银行 | ||||||
| Traditional Chinese | 亞洲基礎設施投資銀行 | ||||||
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| Alternative Chinese name | |||||||
| Simplified Chinese | 亚投行 | ||||||
| Traditional Chinese | 亞投行 | ||||||
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The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by the government of China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia region.[2] AIIB is regarded by some as a rival for the IMF, the World Bank and the Asian Development Bank (ADB),[3] which are regarded as dominated by developed countries like the United States.[3] The United Nations has addressed the launch of AIIB as "scaling up financing for sustainable development"[4] for the concern of Global Economic Governance.[5]
Chinese Premier Li Keqiang affirms AIIB cooperative stance.[6] As of April 15, 2015, almost all Asian countries and most major countries outside Asia had joined the AIIB, except the US, Japan (which dominated the ADB) and Canada. North Korea's and Taiwan's applications for Prospective Founding Member (PFM) were rejected.
The bank was proposed by China in 2013[7] and launched at a ceremony in Beijing in October 2014.[8] The Articles of Agreement (AOA) would be finalized and open for signature by PFMs from June 2015. The AOA is expected to enter into force and AIIB to be fully established by the end of 2015.[9]
History
The first news reports about the AIIB appeared in October 2013.[10] The Chinese government has been frustrated with what it regards as the slow pace of reforms and governance, and wants greater input in global established institutions like the IMF, World Bank and Asian Development Bank which it claims are dominated by American, European and Japanese interests.[3]
In April 2014, Chinese Premier Li Keqiang delivered a keynote speech at the opening of the Boao Forum for Asia and said that China was ready to intensify consultations with relevant parties in and outside Asia on the preparations for the Asian Infrastructure Investment Bank.[11]
The Asian Development Bank Institute published a report in 2010 which said that the region requires $8 trillion to be invested from 2010 to 2020 in infrastructure for the region to continue economic development.[3][12] In a 2014 editorial, The Guardian newspaper wrote that the new bank could allow Chinese capital to finance these projects and allow it a greater role to play in the economic development of the region commensurate with its growing economic and political clout.[13] But until March 2015, China in the ADB has only 5.47 percent voting right, while Japan and US have a combined 26 percent voting right (13 percent each) with a share in subscribed capital of 15.7 percent and 15.6 percent, respectively. Dominance by both countries and slow reforms underlie China's wish to establish the AIIB, while both countries worry about China's increasing influence.[14]
In June 2014 China proposed doubling the registered capital of the bank from $50 billion to $100 billion and invited India to participate in the founding of the bank.[15][16] On October 24, 2014, a signing ceremony held in Beijing formally recognized the establishment of the bank. Twenty-one countries signed the Memorandum of Understanding (MOU), including China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan, and Vietnam.[17]
U.S. pressure allegedly tried to keep Australia and South Korea from signing up as founding members, despite the fact that they expressed an interest in it.[18] However, both Australia and South Korea have officially applied to join the bank in late March 2015, ignoring objections by the United States.[19][20][21] Indonesia's joining was slightly delayed due to their new presidential administration not being able to review the membership in time.[22] Indonesia signed the MOU on 25 November 2014.
Negotiations for the bank’s articles of agreement will follow, and are expected to be completed by the end of 2015.[23][24]
Hong Kong's Financial Secretary John Tsang announced in his budget speech in February 2015 that the territory would join the AIIB.[25]
In early March 2015, the United Kingdom's Chancellor of the Exchequer, George Osborne, announced that Britain had decided to apply to join the Chinese-led Asian Infrastructure Investment Bank, becoming the first major Western country to do so. The announcement was criticised by the Obama Administration in the United States. A US government official told the Financial Times, "We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power." This official further stated that the British decision was taken after "no consultation with the US."[26] In response to the US criticism, the UK claimed that the subject had been discussed between the Chancellor Osborne and the US Treasury Secretary Jack Lew for several months preceding the decision. It was further stated that joining the bank as a founding member will allow Britain to influence the development of the institution. By encouraging Chinese investments in the next generations of nuclear power plants, Osborne announced that "the City of London would become the base for the first clearing house for the yuan outside Asia."[27]
Following the criticism, the White House National Security Council, in a statement to The Guardian, declared, "Our position on the AIIB remains clear and consistent. The United States and many major global economies all agree there is a pressing need to enhance infrastructure investment around the world. We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks. Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards … The international community has a stake in seeing the AIIB complement the existing architecture, and to work effectively alongside the World Bank and Asian Development Bank."[28]
Three other European nations – Germany, France and Italy – soon followed Britain's decision to join the AIIB. German Finance Minister Wolfgang Schäuble stated, "We want to contribute our long-standing experience with international financial institutions to the creation of the new bank by setting high standards and helping the bank to get a high international reputation."[29] In late March, 2015, the South Korean Ministry of Strategy and Finance announced that it, too, is planning to join the AIIB, citing its potential in benefiting South Korean companies win deals in infrastructural projects as well expanding South Korea's influence in international banking as a founding member.[30]
Membership
As of 15 April 2015, there are 57 Prospective Founding Members (PFM).[31][32] Hong Kong joins the delegation of China in the negotiations.[33]
Belgium, Canada, Czech Republic and Ukraine are considering joining the AIIB. Colombia, Japan, and the United States have no immediate intention to participate. North Korea[34] and Taiwan[35] were rejected by China to join as a PFM. Hungary and Taiwan are applying for ordinary member to join AIIB.
Prospective Founding Members
There are 37 PFMs in the region, 20 PFMs outside the region.
| PFMs in the region | PFMs outside the region | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes of the Country (Region)
- * Memorandum (MOU) signatory PFM
- **
Hong Kong
- Hong Kong SAR's representative attended the third Chief Negotiators' Meeting (CNM) held for Prospective Founding Members (PFM) on March 30–31, 2015 by joining the delegation of China,[53] and what kind of form or identity that Hong Kong SAR will be in AIIB will be finally determined once the preparing procedure or the negotiation is completed.[47]
Ordinary Members
Applicant Countries and Regions
| Country (Region) | Date of application |
|---|---|
 Hungary |
31 March 2015[54] |
 Chinese Taipei* |
31 March 2015/13 April 2015 |
Note of the Country (Region)
- *
Chinese Taipei (Taiwan)
- Taiwan applied for PFM to join the AIIB via Taiwan Affairs Office, possibly under the name "Chinese Taipei" on March 31,[55][56] but was rejected to become a PFM by the Multilateral Interim Secretariat of AIIB on April 13, without any reason stated. China however kept the door open for Taiwan's membership at a later date.[35]
- China's Foreign Ministry spokeswoman Hua Chunying said that Taiwan should avoid "two Chinas" or "one China, one Taiwan" situation.[57]
Rejected applicant
- A senior representative from North Korea had his request for North Korea to join the AIIB rejected by the alliance's inaugural president, Jin Liqun. He stated that North Korea had failed to obey a necessary principle: provide detailed information on the economic and financial market conditions of their country.[58] The Chinese Foreign Ministry however stated that it was unaware that North Korea had requested to join or that its application was rejected.
Comments from non-applicant countries
United States – No commitment
- The United States' officials have expressed concerns about whether the AIIB would have high standards of governance, and whether it would have environmental and social safeguards.[59] The United States is reported to have used diplomatic pressure to try and prevent key allies, such as Australia, from joining the bank,[60] and expressed disappointment when others, such as Britain, joined.[34][59]
Japan – "Under Consideration" / No commitment
- Masato Kitera, Tokyo's envoy in Beijing, stated previously that Japan might join the AIIB.[61] Japanese Finance Minister Tarō Asō previously indicated interest in joining the AIIB, but later switched his stance. Yoshihide Suga, Japan's Cabinet Secretary, told to the public that Japan was still seeking China's full explanation of the AIIB as he stated, "As of today, Japan will not join AIIB and a clear explanation has not been received from China" and "Japan is dubious about whether (the AIIB) would be properly governed or whether it would damage other creditors". He also stated that Japan is no longer considering whether or not to join the bank. The Japanese Government Spokesman also announced that Japan would not join the AIIB. Japanese prime minister Shinzō Abe also added that Japan does not need to join the bank.[62]
Reception
The President of the World Bank, Jim Yong Kim, has said that the need for infrastructure in developing countries is great so that the activities of new organizations would be welcome.[63]
See also
- Boao Forum for Asia
- BRICS Development Bank (New Development Bank BRICS (NDB BRICS))
- Asian Development Bank (ADB)
- World Bank
- International Monetary Fund (IMF)
External links
- AIIB official website
- Ministry of Finance of the People's Republic of China (MOF) Template:Zh icon
- Asian investment bank: Realigning the status quo by The Straits Times
References
- ^ About: the Secretariat, aiibank.org.
- ^ "21 Asian countries sign MOU on establishing Asian Infrastructure Investment Bank".
- ^ a b c d Branigan, Tania (13 March 2015). "Support for China-led development bank grows despite US opposition". The Guardian. Retrieved 15 March 2015. Cite error: The named reference ":0" was defined multiple times with different content (see the help page).
- ^ http://www.un.org/en/development/desa/policy/wesp/wesp_archive/2015wesp-ch3-en.pdf
- ^ United Nations Financing for Development Office. "Global Economic Governance". Retrieved 29 March 2015.
- ^ "Premier Li reaffirms AIIB cooperative stance". Xinhua. 23 March 2015.
- ^ "China says new bank to complement existing institutions". The Washington Post. 2015-03-21.
- ^ "Three major nations absent as China launches World Bank rival in Asia". Reuters. 5 November 2014.
- ^ About: the AIIB, aiibank.org.
- ^ "An Asian infrastructure bank: Only connect". The Economist. 4 October 2013. Retrieved 2 April 2015.
- ^ "ChinaBoao Forum China eyes closer Asia's economic integration through Asian infrastructure bank". GBTIMES BEIJING. 11 April 2014.
- ^ Bhattacharyay, Biswa N. (9 September 2010). "Estimating Demand for Infrastructure in Energy, Transport, Telecommunications, Water and Sanitation in Asia and the Pacific: 2010-2020". Asian Development Bank Institute. Retrieved 27 October 2010.
- ^ "The Guardian view on the Asian Infrastructure Bank: the US should work with it, not oppose it: It's no surprise that China is promoting a solution to the shortage of infrastructure capital in Asia". The Guardian. 27 October 2014. Retrieved 2 April 2015.
- ^ Isabel Reynolds and Enda Curran (March 18, 2015). "In Development Bank Battle, Surge to China Rattles Japan". Retrieved April 5, 2015.
- ^ Anderlini, Jamil (24 June 2014). "China expands plans for World Bank rival". Financial Times.
- ^ Aneja, Atul (30 June 2014). "China invites India to join Asian Infrastructure Investment Bank". The Hindu. Retrieved 2 April 2015.
- ^ "China, 20 other countries initiate new Asian bank", Mail Online, 24 October 2014.
- ^ "China launches AIIB in Asia to counter World bank","Affairscloud" , 24 October 2014.
- ^ "Australia decides to join China-proposed AIIB"
- ^ "Asian Infrastructure Investment Bank: Australia to sign Memorandum of Understanding to join China development fund"
- ^ "S. Korea decides to join China-proposed AIIB"
- ^ a b c "Indonesia becomes 22nd founding member of AIIB". Xinhua News Agency. 27 November 2014. Retrieved 28 November 2014. Cite error: The named reference "indonesia_membership" was defined multiple times with different content (see the help page).
- ^ Murray, Lisa (27 October 2014). "China leaves door open for Australian turnaround on Asia bank". The Australian Financial Review.
- ^ "Three major nations absent as China launches W.Bank rival in Asia". Reuters. 27 October 2014. Retrieved 27 October 2014.
- ^ "The 2015-16 Budget - Budget Speech". Retrieved 29 March 2015.
- ^ [1] "US Attacks UK’s ‘constant Accommodation’ with China - FT.com." Financial Times.
- ^ [2] "US Anger at Britain Joining Chinese-led Investment Bank AIIB." The Guardian.
- ^ http://www.thestandard.com.hk/breaking_news_detail.asp?id=58463&icid=2&d_str=20150313
- ^ [3] "Germany, France, Italy to Join China-Backed Development Bank." WSJ.
- ^ http://www.nytimes.com/2015/03/27/world/asia/south-korea-to-join-asian-infrastructure-investment-bank.html
- ^ The Status of AIIB | About AIIB, aiibank.org.
- ^ Members of AIIB, aiibank.org.
- ^ a b "Financial Secretary - My Blog - 亞投行". Retrieved 29 March 2015.
- ^ a b c d "The infrastructure gap". The Economist. Retrieved 21 March 2015.
- ^ a b Taiwan unable to become AIIB prospective founding member: China. Retrieved 2014-04-13.
- ^ "Australia approved as AIIB founder". Xinhua News Agency. 13 April 2015. Retrieved 25 April 2015.
- ^ a b c d e f g "AIIB membership means opportunity for Iceland: official". Xinhua News Agency. 18 April 2015. Retrieved 25 April 2015.
- ^ a b c d e "Georgia, Denmark, Brazil, Netherlands, Finland Join China's AIIB Bank". Sputnik. 25 April 2015.
- ^ "Iran Joins China-Led Asian Bank". Fars News Agency. 7 April 2015. Retrieved 25 April 2015.
- ^ a b http://news.xinhuanet.com/english/2015-04/09/c_134137672.htm
- ^ "New Zealand becomes 24th founding member of AIIB". China Daily. 5 January 2015. Retrieved 25 April 2015.
- ^ a b c "Spain, ROK, Austria join AIIB as founding members". China Daily. 11 April 2015. Retrieved 25 April 2015.
- ^ "Russia officially joins $50bn China-led infrastructure bank". RT. 14 April 2015. Retrieved 14 April 2015.
- ^ a b "Saudi Arabia, Tajikistan to join Beijing-backed development bank". Reuters. 13 January 2015. Retrieved 25 April 2015.
- ^ "Turkey joins AIIB as founding member". Xinhua News Agency. 11 April 2015. Retrieved 25 April 2015.
- ^ "UAE joins AIIB as prospective founding member". Gulf News. 5 April 2015. Retrieved 25 April 2015.
- ^ a b "香港参加亚投行筹备会议(Hong Kong attended the preparing meeting of AIIB)". www.guancha.cn. Retrieved 13 April 2015.
- ^ a b "Egypt, Norway, Russia approved as AIIB founders". China Daily. 15 April 2015. Retrieved 25 April 2015.
- ^ a b "Italy, France approved as AIIB founding members". People's Daily. 2 April 2015. Retrieved 25 April 2015.
- ^ http://news.xinhuanet.com/english/2015-04/01/c_134116568.htm
- ^ "Luxembourg becomes AIIB's prospective founding member". Xinhua News Agency. 27 March 2015. Retrieved 25 April 2015.
- ^ a b "U.K. and Switzerland follow Brazil to China-backed Asia investment bank". Reuters. 28 March 2015. Retrieved 25 April 2015.
- ^ "筹建亚投行第三次谈判代表会议在哈萨克斯坦举行". Ministry of Finance of PRC. 31 March 2015. Retrieved 13 April 2015.
- ^ "Hungary to join China-backed AIIB investment bank - PM Orban". Reuters. Retrieved 1 April 2015.
- ^ "Taiwan to apply to join China-backed AIIB investment bank". Reuters. 31 March 2015. Retrieved 31 March 2015.
- ^ "Legislature not against AIIB bid". Taipei Times. 2 April 2015. Retrieved 2 April 2015.
- ^ "Foreign Ministry Spokesperson Hua Chunying's Regular Press Conference on March 31, 2015". .FMPRC. 31 March 2015. Retrieved 1 April 2015.
- ^ "No way North Korea' — DPRK refused entry to China-led AIIB". Emerging Markets. Retrieved March 27, 2015.
- ^ a b Watt, Nicholas; Lewis, Paul; Branigan, Tania (15 March 2015). "US anger at Britain joining Chinese-led investment bank AIIB". The Guardian. Retrieved 2 April 2015.
- ^ "Europeans defy US to join China-led development bank". Financial Times. 16 March 2015.
Australia, a key US ally in the Asia-Pacific region which had come under pressure from Washington to stay out of the new bank, has also said that it will now rethink that position.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "Japan denies plan to join China-led development bank". Yahoo!. AFP. Retrieved March 31, 2015.
- ^ "Taiwan to join China-led regional bank, Japan says not now". Yahoo!. Elaine Kurtenbach. Retrieved March 31, 2015.
- ^ "World Bank welcomes China-led infrastructure bank". Reuters. 8 July 2014.