Since Xi Jinping
came into office in November 2012, China became more active and assertive in
pursuing a greater role in global economic governance[1].
It is reflected from two initiatives of the Belt and Road (BRI), and Asian
Infrastructure Investment Bank (AIIB) unveiled by Xi during his visit to
Indonesia in 2013[2]. The AIIB
functions complementary to existing multilateral and bilateral financial
institutions, aims to fill up the infrastructure development gap in Asia region[3].
The AIIB was launched in early 2016 with initial capital stock of $US 100
billion, of which almost $US 30 billion was contributed by China. Undoubtedly,
China as the largest shareholder holds 29.8 percent of voting power[4].
The number of approved members by now is 87, including both regional and
non-regional nations[5].
The policy of establishing the first China-led multilateral development bank
(MDB) was controversial. On the one hand, critiques have been made on AIIB
being driven by China’s self-interests in resolving its own economic problems
such as overcapacity, and advancing its political influence by undermining the
US hegemony. On the other hand, the infrastructure gap, particularly in Asia,
is huge and desperately in need of a specialized MDB like AIIB to fund its development,
which makes the formation of AIIB reasonable and welcomed.
This essay
attempts to give an understanding of driving forces of the formation of AIIB,
by focusing on how policymakers arrived at the decision of establishing the
AIIB. It will first evaluate how policymakers presented the establishment of
AIIB, in terms of a strategy adjustment shift involved that drove AIIB
underwent an evolution. Then it looks at how the formation of AIIB furthers
China’s national interests, from economic, geo-economic and political aspects.
Furthermore, it will looks into an alternative strategy policymakers have
considered that did not fit into Xi’s policy approach as good as forming AIIB.
Lastly, it outlines two main successes of AIIB initiative. This analysis will
conclude that, the formation of AIIB can potentially promote ‘win-win’
cooperation.
The AIIB was born
out of two motivations, one is to “foster sustainable economic development, create
wealth and improve infrastructure connectivity in Asia by investing in
infrastructure and other productive sectors”; another is, as a regional
institution, to “promote regional cooperation and partnership in addressing
development challenge by working in close collaboration with other multilateral
and bilateral development institutions”[6].
In 2015, Consul
General of China, Liu Kan has highlighted the need of infrastructure investment
in Asia[7].
According to a report done by ADB in 2009, from 2010 to 2020, to follow up the
expected economic growth, the demand of infrastructure investment in Asia
region was about $US 8 trillion, with additional $US 290 billion needed in
specific regional infrastructure projects[8].
This massive challenge overburdens existing MDBs due to their incapability[9]
and inefficiency of management. Existing MDBs have been criticized for their
slow process and bureaucracy[10].
It is pointed out, it takes up to seven years for ADB to go through the
processes of approval on a project[11].
Also, existing financial institutions that are within Bretton Woods System
(BW), have been criticized for being propellent of neo-liberal ideologies by
attaching conditionalities on loans, such as deregulation and liberalization,
that were ineffective, or even deteriorated the economy of recipient countries[12].
With the absence of specialized financial institution focuses solely on
infrastructure, Xi Jinping says that the AIIB responses to this need of infrastructure
investment, and complements other MDBs to promote regional development[13].
However, the AIIB
agenda has underwent an evolution, from setting up an “formally
Chinese-controlled bank” to “internationally-legitimate bank”[14].
When AIIB initiative was firstly announced in 2013 by Xi Jinping, it was
closely linked with BRI and assigned a minor role as to support the BRI[15].
Later in late 2014, Xi explicitly said the AIIB “is aimed at providing
financial support for infrastructure development in countries along the ‘One
Belt, One Road’ and promoting economic cooperation”[16].
However, in 2016, Xi Jinping spoke again of AIIB with shifted direction, by
saying “We would finance infrastructure projects in all emerging market
economies even though they don’t belong to the Belt and Road Initiative”, he
clarified the AIIB was not created solely for BRI, contrary to his speech
before 2016[17].
Scholars have given analysis to this shifted attitude as a reveal of an
evolution of AIIB strategy. One of the reasons being considered was the surprising
numbers of countries applied to join from early 2015[18],
including some major developed nations[19].
By accepting non-regional members that increased international legitimacy of
the AIIB, China’s share decreased from 50 percent as it initially set to be, to
29.8 percent at it is now[20].
Another plausible reason was the criticisms widely made on AIIB for being an
“counter-hegemonic” institution to challenge US hegemony and shape the current
world order[21]. Policymakers
thus adopted flexible approach on AIIB, allowed it to align with the existing
norms, by publicly stating it had no intention to challenge, but to work with
the US and supplement existing MDBs in infrastructure development[22].
Furthermore, China has assured investors the bank “was not a political
alliance”, and China would not interfere in the political affairs of member
states[23].
The policymakers
perceive the formation of AIIB as potentially beneficial to their interests,
primarily in the area of economic, but also geo-economics and political
influence.
Firstly, in the
economic aspect, the policymakers emphasized the promotion of “win-win
cooperation” and enhancement of regional connectivity through supporting
infrastructure development in the Asia region[24].
It is beneficial for loan recipient countries, no doubt, but what for China?
Scholars have pointed out that, one of the core problems of Chinese economy is
overcapacity and overinvestment in industry and construction, which has
accompanied with decline with marginal return of domestic investment since 2000[25].
He Yafei, vice minister of the Overseas Chinese Affairs Office of the State
Council, has advocated for exporting capacity overseas to relieve domestic
overcapacity problem, at the same time prosper overseas infrastructure
development[26]. Also,
this measure can alleviate China’s massive currency reserves by investing
overseas[27]. On
the other hand, AIIB can tap the potential for China’s substantial economic
growth. The reality of China’s neighbour countries is most of them are less
developed countries that cannot meet China’s needs of reginal market.
Facilitating infrastructure development in the region expands both China’s
export and import markets[28].
In addition, scholars have pointed out that AIIB can facilitate
internationalization of Chinese RMB in long term[29].
Secondly, the
formation of AIIB has geo-economics considerations of securing territorial
security, and increasing regional and global political influence.
Firstly,
historical evidences suggest one possible role of AIIB is to defend China’s
border security by forming geo-economic alliances[30].
One example is over the territorial dispute in South China Sea, China provided
$US 24 billion of investment in exchange of Philippine’s reconciliatory policy
in 2016[31].
By looking at the projects AIIB have financed so far, India appeared to be the
largest recipient regardless the tension it had with China over the Doklam
Plateau[32].
Former Indian Foreign secretary Jaishankar responded positively to AIIB,
“connectivity should diffuse national rivalries, not add to regional tensions”[33].
Apart from pure economic consideration, it is argued that it is one of China’s
geo-economic strategy to secure its border security, by have common interests
with countries where are unfriendly toward China’s growing influence[34].
Thirdly, AIIB can
be conceived as an instrument to advance China’s external legitimacy in Asia
region, and beyond. AIIB is established as a regional institution, which has
preferential governance structure over regional members[35],
and attaches fewer strings on its loans compared to existing MDBs[36].
It is argued that, by providing an alternative institution to existing MDBs,
China is expected to foster its regional leadership by building asymmetric
interdependence with recipient states and diminish the US political influence
in the region[37]. On
the other hand, China has been seeking greater say for years in global economic
governance. It was widely recognized that China was frustrated by slow quota
reforms in IMF and World Bank[38].
And the launch of China’s own MDB was a response to the hindrance from the US
and to seek a role that better reflects China’s economic power[39].
Despite the
motivation behind the formation of AIIB was multifaced, economists have centred
on China’s industrial overcapacity being one major rational, which seriously
threatened China’s economy[40].
One possible alternative policymakers considered was structural reform of
domestic market[41]. One
of the reasons led to overcapacity was the vicious competition in China’s
industrial market, which was dominated by state-owned banks and enterprises[42].
The fact that bigger firms would be protected by government and thus enjoy
favourable terms on bank loans, encouraged industrial firms to focus on
aggressive expansion instead of innovation or profitability[43].
Economists have suggested Chinese government to foster free market competition
in industrial sector, let the market to decide resource allocation, and reduce
government intervention to allow over-leveraged companies free fall[44].
And Xi Jinping has responded that China would accelerate internal financial
structural reform towards market-orientation[45],
which is reflected from the reinforcement of capacity cut in China last year[46].
But very recently, he also showed his strong support for SOEs which is the
backbone of China’s economy[47].
Therefore, AIIB fits better into Xi’s priority over state-led centred policy
approach, which might downgrade the attention
on domestic market reform, and thus ineffective[48].
One main success
AIIB has achieved so far is the positive response it received globally, which
is reflected on the triple A ratings it received from global credit rating
agencies, including S&P, Moody’s and Fitch[49].
The credibility AIIB obtained should give credit to its efficient governance
structure, of which its innovation of non-resident board improves the
efficiency of operation and management[50].
It is pointed out that resident board is one of the causes led existing MDBs
and IFIs inefficient and bureaucratic[51].
While the AIIB, by having non-resident board, can deliver more efficient
decision-making, and at the same time being economical in reallocating the
costs on having resident boards to areas where the money is more needed[52].
On the other hand, AIIB adopted a cautious approach in its early stage of
development to obtain credibility. There are two notable things can be founded
in AIIB’s projects, one is that majority was co-financed with existing MDBs[53];
another is that it has estimated total lending of $US 5.2 billion by September
2018, which falls short of the expectation AIIB had – it initially planned to
lend $US 10-15 billion a year for first five to six years[54].
Scholars have argued that working with other MBDs is a shortcut for AIIB to
build up its investment portfolio by following, and at the same time learning
from existing lending standards[55].
And the unexpected number of lending amount reflected AIIB’s caution in
choosing projects, since investment in infrastructure projects is long term and
often accompanied with low interest rates but high risks of default,
considering most loan recipient countries exist social and economic instability[56].
And the credibility AIIB obtained showed its effectiveness in governance and
business strategy.
To conclude, the
motivation behind formation of AIIB was primary economic, aimed to promote
‘win-win cooperation’. By providing investment to countries where
infrastructure development is most needed, China make gains from the
enhancement of regional integration, especially in resolving its own economic problem,
expanding import and export markets, and increasing regional influence, or
potentially expand its role in global economic governance. No doubt, it does
have the potential to contribute to regional development and public goods. Nevertheless,
AIIB is still at early stage of development, and it is too early to tell its
role in world economic governance.
[1] Xi Jinping abandoned his predecessor Deng Xiaoping’s foreign policy
strategy, which stresses keeping low profile. See Ren, Xiao. “China as an Institution-builder: The Case of
the AIIB.” The Pacific Review 29, no. 3 (2016): 435.
[2] Xi Jinping, ‘Speech by Chinese President Xi Jinping to Indonesian
Parliament’, Speech, Jakarta, 02 October 2013. ASEAN-China Centre. http://www.asean-china-center.org/english/2013-10/03/c_133062675.htm
[3] Articles of Agreement – AIIB, 25 Dec 2015, Article 1.
[4] Ibid, Schedule A.
[5] Ibid.
[6] Articles of Agreement – AIIB, Article 1 (1).
[7] Ministry of Foreign Affairs, AIIB:
A Successful Practice of Major-Country Diplomacy with Chinese Characteristics (Chinese
Embassy in Lagos, 07 May 2015).
[8] Asian Development Bank, “Infrastructure
Seamless Asia”, 2009: 10, https://www.adb.org/sites/default/files/publication/159348/adbi-infrastructure-seamless-asia.pdf;
A more recent number provided by world bank in 2015, pointed out the developing
countries were in need of about $US 1 trillion per annual to fill up the infrastructure
gap. See World Bank, “Global Infrastructure Facility”, 2015. http://www.worldbank.org/en/programs/global-Infrastructure-facility
[9] Jim Yong Kim, World Bank President speaks of such burden is
impossible for World Bank, or any other institutions to carry alone. Not to
mention the ADB which was only capable of financing $US 13 billion a year. See
Mehmet Hecan “Dynamics of
Institutional Proliferation in Financing for Development: The Birth of the
AIIB.” Development 59, no.1-2, 161.
[10] It made most developing countries to leave out the option of using
existing MDBs to fund their infrastructure development. See David Dollar,
“Lessons for the AIIB from the experience of the World Bank”. Brookings,
27 April 2015, https://www.brookings.edu/articles/china-on-the-global-stage/
[11] Mehmet Hecan, “Dynamics
of Institutional Proliferation in Financing for Development: The Birth of the
AIIB.” 161-162.
[12] For example, IMF’s SAP has been blamed for
poverty in developing countries, see Anup Shah, ‘Structural Adjustment – a
major cause of poverty’, 24 March 2014, Global Issues,
http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty
[13] Xi Jinping, “Full Transcript: Interview with Chinese President Xi
Jinping”. 22 September 2015, Interview, The Wall Street Journal.
https://www.wsj.com/articles/full-transcript-interview-with-chinese-president-xi-jinping-1442894700
[14] Jeffery Wilson, “The evolution of China’s
Asian Infrastructure Investment Bank: From a revisionist to status-seeking
agenda”. 25 September 2017, International Relations of the Asia-Pacific, eux289: 12. https://doi.org/10.1093/irap/lcx015
[15] Xi Jinping, ‘Speech by Chinese President Xi Jinping to Indonesian
Parliament’, Speech, Jakarta, 02 October 2013. ASEAN-China Centre.
http://www.asean-china-center.org/english/2013-10/03/c_133062675.htm
[16] Quoted in Yun Sun, “China and the Evolving Asian Infrastructure
Investment Bank,” in Daniel Bob, ed. Asian Infrastructure Investment Bank:
China as Responsible Stakeholder, Sasakawa USA, 2015. ; this
position stood still until 2015, when Xi addressed AIIB again as facilitator of
the BRI. See Mu Xuequan ‘Xi stresses implementing central economic policies’, Xinhua, 10 February, 2015,
http://www.xinhuanet.com/english/china/2015-02/10/c_127481077.htm
[17] Zhong Nan and Cai Xiao, “AIIB Leas support for Belt and Road
Infrastructure Projects,” China Daily, June 8, 2016, http://europe.chinadaily.com.cn/business/2016-06/08/content_25645174.htm
[18] Yuan
Jingdong. “Beijing’s Institutional-balancing Strategies: Rationales,
Implementation and Efficacy.” Australian
Journal of International Affairs 72, no. 2 (2018): 118
[19] Such as the United Kingdom, Germany and Russia.
[20] China initially was to contribute about $US 50 millions of initial
capital stock, which would make the AIIB truly Chinese-controlled bank. See
Gabriel Dominguez, ‘A look at the China-led Asian Infrastructure Investment
Bank’, Deutsche Welle, 09 July 2017.
https://www.dw.com/en/a-look-at-the-china-led-asian-infrastructure-investment-bank/a-18541209
[21] See for example, Ely Ratner, ‘Making Bank:
Why China’s new infrastructure bank represents a challenge to the global
order.’ Foreign Policy, 23 October 2014,
https://foreignpolicy.com/2014/10/23/making-bank/; Cary Huang, ‘China-led Asian
bank challenges US dominance of global economy’, South China Morning Post, April 27, 2015,
https://www.scmp.com/news/china/economy/article/1763525/china-led-asian-bank-challenges-us-dominance-global-economy;
Paola Subacchi, ‘The AIIB is a Threat to Global Economic Governance’, Foreign
Policy, 31 March, 2015, https://foreignpolicy.com/2015/03/31/the-aiib-is-a-threat-to-global-economic-governance-china/
[22] Hong Lei, ‘Speech at
Humphrey School of Public Affairs’, (Speech, Chinese Consulate General in
Chicago, 8 February 2016), Ministry of Affairs.
[23] Articles of Agreement – AIIB, 25 Dec 2015, Article 31(2); China
even publicly declared it would not use its veto power, despite being the
largest shareholder. See Izumi Nakagawa and Manoj Kumar, ‘China’s influence
over AIIB a concern ahead of founders’ meeting’, Reuters, 13 April, 2015, https://in.reuters.com/article/asia-aiib-shareholding/chinas-influence-over-aiib-a-concern-ahead-of-founders-meeting-idINKBN0N40T620150413
[24] The concept of “win-win cooperation” has been presented by Chinese
policymakers in accordance with the philosophy of the bank of inclusiveness and
openness. See Ministry of Foreign Affairs, ‘AIIB:
A Successful Practice of Major-Country Diplomacy with Chinese Characteristics’.
[25] During past decades of development, China
has employed investment- and export-led model, which contributed greatly to
China’s rapid economic growth by funding investment in export sectors. However,
primarily from 2008, global demand decreased dramatically but China’s
production capacity persisted growing. While the global market cannot absorb these
production, overcapacity has gradually become a serious problem for China’s
economy from 2008. It mainly happens to steel, cement, solar energy and
construction sectors. In order to reduce cost, companies expanded regardless
environmental and health standard, and led to slow growth of wages. See Jörg
Wuttke “The Dark Side of China’s
Economic Rise”. Glob Policy, 8 (2017): 63-64. doi:10.1111/1758-5899.12439; Shuaihua Wallace Cheng, ‘Overcapacity a
time bomb for China’s economy’, South
China Morning Post, 28 September
2015,
https://www.scmp.com/comment/insight-opinion/article/1862024/overcapacity-time-bomb-chinas-economy; Kong, Veasna, Adam McKissack, and Dong
Zhang. “China in a new period of transition.” Economic
Round-up 4 (2012): 43.
Overinvestment problem see Alice de Jonge
“Perspectives on the emerging role of the Asian Infrastructure Investment
Bank”, International Affairs, Volume 93,
Issue 5, (2017): 1063.
[26] He Yafei, ‘China’s overcapacity crisis can
spur growth through overseas expansion’, South China Morning Post, 07
January 2014,
https://www.scmp.com/comment/insight-opinion/article/1399681/chinas-overcapacity-crisis-can-spur-growth-through-overseas;
Scholar analysis on AIIB as strategic instrument to resolve China’s
overcapacity, see Ikenberry, G.
John and Darren J. Lim. “China’s emerging institutional statecraft.”
(2017): 42: 10; Ren Xiao.
“China as an Institution-builder: The Case of the AIIB.” The
Pacific Review 29, no. 3 (2016):440-441; Kevin G. Cai,
“The One Belt One Road and the Asian Infrastructure Investment Bank:
Beijing’s New Strategy of Geoeconomics and Geopolitics.” Journal of Contemporary China, 2018: 7-8.
[27] China had currency reserve surplus of $US 3.82 trillion by 2013,
mainly invested in low-yielding US treasuries. See Ren Xiao. “China as an Institution-builder: The Case of
the AIIB.”: 435
[28] Poor land routes have also contributed to expansion of
regional markets for China. See Mike
Callaghan and Paul Hubbard.
“The Asian Infrastructure Investment Bank: Multilateralism on the Silk
Road.” China Economic Journal 9, no. 2 (2016): 120.
[29] Ikenberry, G. John and
Darren J. Lim. “China’s emerging institutional statecraft.”: 11; Despite
the AIIB mainly lend in US dollar now, Chinese economists have suggested that
the bank “will gradually move to a mix of the yuan and the US dollar”. Quoted
in Cary Huang, ‘China seeks role for yuan in AIIB to extend currency’s global
reach”. South China Morning Post, 27 April 2015,
https://www.scmp.com/news/china/economy/article/1766627/china-seeks-role-yuan-aiib-extend-currencys-global-reach;
The announcement on AIIB lends in US dollars, see Gabriel Wildau and Tom
Mitchell. “China’s new Asia development bank will lend in US dollars”, Financial
Times, 17 January 2016.
https://www.ft.com/content/762ce968-bcee-11e5-a8c6-deeeb63d6d4b
[30] Also, AIIB can contribute to China’s sovereignty integrity in
another way, which is seen from its rejection of Taiwan’s application of
becoming a founder member due to ‘improper name’. See Kit Tang, ‘China says no
to Taiwan on AIIB: What it means’, CNBN, 14 April 2015,
https://www.cnbc.com/2015/04/14/china-says-no-to-taiwan-on-aiib-what-it-means.html
[31] It was at the same time Philippines announced its break up with the
US, and received the fund from China. See Katie Hun, Matt Rivers and Catherine
E. Shoichet, ‘In China, Duterte announced split with US: ‘America has lost’. CNN,
20 October 2016, https://edition.cnn.com/2016/10/20/asia/china-philippines-duterte-visit/index.html;
Catherine N.Pillars and Jasper Emmanuel Y. Arcalas, ‘Duterte brings home $24
billion worth of deals’, Business Mirror, 21 October 2016.
https://businessmirror.com.ph/duterte-brings-home-24-billion-worth-of-deals/
[32] By September 2018, AIIB has had approved 39 projects with estimated
total lending of $US 5.2 billion, of which 8 projects were in India with
estimated total lending of $US 1.769 billion. See AIIB projects, https://www.aiib.org/en/projects/approved/index.html;
Few months ago, AIIB also announced its plan of lending $US 3.5 billion to
India this year. See Fosemary Marandi, ‘China-led AIIB to spend $US 3.5 bn with
focus on India’, Nikkei Asian Review, 25 June 2018,
https://asia.nikkei.com/Economy/China-led-AIIB-to-spend-3.5bn-with-focus-on-India
[33] Quoted in Ankit Panda, ‘If India won’t put
up with the BRI, why is it the largest recipient of AIIB funds?’, The
Diplomat, 19 March 2018, https://thediplomat.com/2018/03/if-india-wont-put-up-with-the-belt-and-road-why-is-it-the-largest-recipient-of-aiib-funds/;
Nevertheless, India’s close relationship with AIIB might be purely economic
decision. Because India is hostile towards China’s BRI, especially for its
caution of China’s power expansion and involvement with countries where India
considered its ‘territory’, such as Nepal, Bangladesh, Sri Lanka, and the
Maldives. See Laura Zhou, ‘China and India border tensions flare up again ahead
of Indian Prime Minister Modi’s visit’, South China Morning Post, 11 April
2018,
https://www.scmp.com/news/china/diplomacy-defence/article/2141277/china-and-india-border-tensions-flare-again-ahead
[34] Danner,
Lukas K., and SpringerLink. China’s Grand Strategy : Contradictory Foreign Policy? 2018: 133
[35] Regional members are secured with at least 75 percent of capital
stock, and GDP based capital allocations. For example, if Japan joins AIIB, its
GDP will be the basis of its capital share, while if US joins, its GDP is only
indicative. See Mike Callaghan and
Paul Hubbard. “The Asian Infrastructure Investment Bank: Multilateralism
on the Silk Road.”: 129.; Articles of Agreement – AIIB, Article 5 (2).
[36] Jason Lee, ‘China’s AIIB to offer loans with fewer strings
attached’, CNBN, 1 September 2015, https://www.cnbc.com/2015/09/01/chinas-aiib-to-better-world-bank-adb-on-loan-terms.html?&qsearchterm=AIIB
[37] Ikenberry, G. John,
and Darren J. Lim. “China’s emerging institutional statecraft.”: 11
[38] The reform package in 2010 aimed to include more voting share for
emerging powers were blocked by the US congress for five years, which was
passed in 18 December 2015. See Ren,
Xiao. “China as an Institution-builder: The Case of the AIIB.”:436.
[39] Ibid; this position is also revealed from strategy adjustment of
AIIB that is emphasized in B1.
[40] The potential results of overcapacity of social instability has
been emphasized by state council. See Lydia Guo, ‘China’s overcapacity problem:
here’s the plan’, Financial Times, 18 October 2013,
https://www.ft.com/content/51e70683-0579-31f5-b248-9334882cf5ea
[41] Shuaihua Cheng, ‘4 ways to tackle China’s overcapacity problem’, World
Economic Forum, 30 September 2015,
https://www.weforum.org/agenda/2015/09/4-ways-to-tackle-chinas-overcapacity-problem/
[42] Ibid
[43] Ibid
[44] Gabriel Wildau and Emily Feng, ‘China broadens campaign against
overcapacity’, Financial Times, 23 November 2017,
https://www.ft.com/content/cd2fe8f0-cf70-11e7-b781-794ce08b24dc
[45] Elias Glenn, ‘Xi says China will continue to open its economy,
deepen financial reforms’, Reuters, 18 October 2017,
https://www.reuters.com/article/us-china-congress-economy-reforms/xi-says-china-will-continue-to-open-its-economy-deepen-financial-reforms-idUSKBN1CN09K
[46] But the effectiveness was in question. Sceptics have pointed out
that some companies were still expanding regardless the campaign against
overcapacity. See Gabriel Wildau and Emily Feng, ‘China broadens campaign
against overcapacity’.
[47] Orange Wang and Sidney Leng, ‘Chinese President Xi Jinping’s show
of support for state-owned firms ‘no surprise’, analysts say’, South China
Morning Post, 28 September 2018,
https://www.scmp.com/economy/china-economy/article/2166261/chinese-president-xi-jinpings-show-support-state-owned-firms
[48] Analysists have pointed out that market liberalization is inferior
to Xi’s state-centred approach: Ibid.
[49] Asian Infrastructure Investment Bank, ‘AIIB receives triple-A
credit rating’, AIIB News, 29 June 2017, https://www.aiib.org/en/news-events/news/2017/20170629_001.html;
Asian Infrastructure Investment Bank, ‘AIIB receives second triple-A credit
rating’, AIIB News, 13 July 2017,
https://www.aiib.org/en/news-events/news/2017/20170713_001.html; Asian
Infrastructure Investment Bank, ‘AIIB receives third triple-A credit rating’, AIIB
News, 18 July 2017,
https://www.aiib.org/en/news-events/news/2017/20170718_001.html.
[50] Articles of Agreement – AIIB, Article 24(3).
[51] Such as the IMF and World Bank, their
resident board are dominated by representatives from more powerful nations who
decisively influence lending decisions and policymaking, sometimes with
unnecessary reviews, has contributed to slow process. David Dollar, “Lessons
for the AIIB from the experience of the World Bank”.
[52] Chin,
Gregory. “Asian Infrastructure Investment Bank: Governance Innovation and
Prospects.” Global Governance 22, no. 1 (2016): 16.; Accordingly,
the cost World Bank spends on resident boards annually is about $US 70 million.
See David Dollar, “Lessons for the AIIB from the experience of the World Bank”.
[53] Including ADB, World Bank, and European Bank of reconstruction and
Development.
[54] Salvatore Babones, ‘China’s AIIB expected to lend $10-15B a year,
but has only managed $4.4B in 2 years’, Forbes, 16 January, 2018,
https://www.forbes.com/sites/salvatorebabones/2018/01/16/chinas-aiib-expected-to-lend-10-15b-a-year-but-has-only-managed-4-4b-in-2-years/#539de32237f1
[55] Ikenberry, G. John and
Darren J. Lim. “China’s emerging institutional statecraft.”:14
[56] Ibid.
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