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Asian Infrastructure Investment Bank formally set up

After more than two years of preparation, the China-initiated Asian Infrastructure Investment Bank, or AIIB, was formally established on Dec 25 in Beijing. It is expected to start operation early next year.

As its name suggests, the AIIB will finance the building of infrastructure -- airports, mobile phone towers, railways and roads in Asia. The bank, headquartered in Beijing, now has 57 members.

A newcomer to the world financial system to bolster global economic growth and governance.

The Asian Infrastructure Investment Bank, or AIIB, was formally launched on Dec 25.

The idea was first mooted by President Xi jinping and Premier Li keqiang in late 2013. And the prospective founding members signed the articles of the agreement, or the constitution of the AIIB, on June 29 in Beijing.

Two years after the idea of AIIB was raised by Chinese leaders, the concept has come into reality. After more than 10 countries ratifying the agreement, the bank is ready for formal operation.

“The requirement for the Asian Infrastructure Investment Bank has been met. We now have 17 countries handed in the ratification, and their shares have exceeded the 50 percent threshold. The AIIB is officially set up,” said Finance Minister Lou Jiwei.

The bank would focus on infrastructure building, as its name suggested. But in addition to constructing ports, rails, or roads, China hopes the bank would be conducive to reforming governance of world economic order.

“The launch of the AIIB is a major event during the reform of global economic governance. As a newcomer, it has entered the system of the CURRENT multilateral agencies. It would help with infrastructure construction, and we would also push for cooperation between the AIIB and EXISTING facilities, to achieve a larger impact,” Lou said.

This new comer is born in the 21st century. Naturally, it would have the most advanced governance in the 21st century. The governance is based on the current multilateral agencies that have more than 70 years of experience. The establishment of the AIIB is an improvement and enhancement of the current world economic order, but not an overthrow.

The bank now is recruiting staff, reviewing potential projects, and confirming investments from its members. At the first board of governors and directors meeting due mid-January, it would elect major leaders as well as come up with major policy sets in the bank’s development, human resources, and financing.