China Aims For AIIB Founding By Year-End
Initially proposed by Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation Summit held in Bali last October, the Asian Infrastructure Investment Bank (AIIB) is reportedly likely to be established with an operating capital of $100 billion within the year. The AIIB was a hot topic of discussion during the recent Asian Development Bank’s (ADB) annual meeting as parties concerned speculated over the structure of the new bank and what impact it will have on the development of the region.
With the ADB mainly being led by Japan, and the World Bank primarily led by the United States, the AIIB will be led by China, which is thought to be the main motivating factor behind its founding. The ADB officially welcomed China’s plan, as it did the proposal from the BRICS countries for the founding of a development bank. At a press conference in Astana, Kazakhstan, the host city for the 47th annual meeting of the Asian Development Bank, ADB President Takehiko Nakao revealed that the long-established financial institution is able to provide around $13 billion annually in new lending, but in order for Asia to maintain its growth trajectory, it needs to spend up to $8 trillion over the next decade on infrastructure projects. Therefore, the proposed AIIB will help in meeting the need for funding.
Nevertheless, the point has been raised that qualified and competent staff would be required urgently in order to get the new bank up-and-running by the end of the year. Speculation is that staff may be poached from the ADB, which is based in Manila, or even from the World Bank. Moreover, despite the official welcoming message from the ADB, there are likely to be conflicts and competition when it comes to securing clients.
Thus far, twenty-two countries have indicated their interest in the AIIB, including some wealthy nations from the Middle East – a region China regards as West Asia. In building a modern-day ‘silk road’ – the trade route that historically connected China and Europe – one of the infrastructure projects funded by the AIIB would be a direct railway link between Beijing and Baghdad.