Chinese officials have issued a firm assurance that the Asian Infrastructure Investment Bank will be a “clean and green” multilateral financial organization, with a strong focus on open and inclusive development that will meet the highest possible international standards.
Addressing the closing ceremony of the Boao Forum for Asia Dubai Conference on Nov 25, Yang Xiyu, executive vice-president of the Institute of the Boao Forum for Asia, also underlined China’s commitment to openness and inclusiveness in all China-led regional initiatives, including the establishment of the AIIB, the development of the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
China’s involvement in the initiatives, Yang said, including the projected infrastructure spending and financing, is a “replacement of the existing international order that will reshape and complement current international organizations”.
Jin Liqun, secretary-general of the Multilateral Interim Secretariat for Establishing the Asian Infrastructure Investment Bank, compared the building of the AIIB to making a giant cake.
Offering what he called a “standing invitation”, Jin emphasized China’s unremitting stance on keeping the door open to all the interested countries wishing to participate in the building of the organization. He said the AIIB invites all parties that still had any doubts on its role to “come to our kitchen, and let’s make the cake together—you won’t be poisoned”.
Yang Shaolin, director-general of the department of international financial cooperation at the Ministry of Finance, said the bank will use its investable capital to first serve the needs within Asia before eying opportunities outside the region.
“Indonesia has signed AIIB’s memorandum of understanding, becoming the 22nd founding member of the bank.
“Anyone who has joined the bank before June 2015 when we complete the negotiations of its articles and rules can be seen as a founding member of this multilateral cooperative organization,” he said.
The AIIB is due to start operation by the end of next year with an initial capital pool of $50 billion, rising to a target of $100 billion, according to some estimates.
Jin did not elaborate on the investment targets, but he did confirm that nuclear power plants are on its radar.
Both Jin and Yang Shaoli emphasized that China does not dominate the AIIB.
“The AIIB is China’s initiative but it is not China’s bank”, Jin told an audience of 350-plus government officials and executives participating in the conference.
“According to the Asian Development Bank, the annual investment for infrastructure in Asia is $730 billion,” said Yang. “Multilaterals only make a combined investment of $30 billion a year, therefore there is a huge funding gap.”
A. Didar Singh, secretary-general of the Federation of Indian Chamber of Commerce and Industry, said poor logistical capabilities and weak infrastructure have almost doubled the cost of manufacturing and transport in the region.
“That is the real cost—the conversion of poor infrastructure into a business cost.”
Francisco de Paula Coelho, director of the lending department for Asia and Latin America at the European Investment Bank, emphasized multilateral finance institutions need to be more humble in any future role they play.
“EIB and its peers have to be instrumental in bringing in much larger private sector investors into infrastructure projects in Asia,” said Coelho.
Cao Honghui, deputy director-general of China Development Bank’s financial research and development center, said that developing infrastructure “takes place over a long cycle”.
“It needs stable economic and social conditions, otherwise it will be difficult to secure funding.”