See More on Facebook

Economics

China-led AIIB makes a mark in less than 3 years

The Asian Infrastructure Investment Bank is beginning to make an impact around Asia as countries sign on to the China-led initiative.


Written by

Updated: June 27, 2018

 

Just three years after its founding, the Asian Infrastructure Investment Bank (AIIB) – initially perceived as China’s World Bank – is well on its way to becoming a credible institution by taking forward its mandate of funding infrastructure projects in Asia.

The AIIB – founded to plug Asia’s monumental infrastructural deficit – is led by China and has 57 prospective founding members and 20 from outside the region, including France, Germany, Italy and the UK. The total membership stands at 84 as of end 2017.

AIIB has an authorised capital base of US$100 billion earmarked “to improve economic and social development in Asia by investing in high quality, financially viable and environmentally friendly infrastructure projects”. China is its single largest contributor and holds around 28 per cent voting share, giving it veto power over major decisions.

AIIB & India

India is AIIB’s second-largest shareholder and the biggest borrower. Projects worth US$4.4. billion have been financed to it in the past three years, Subhash Chandra Garg, India’s secretary at the Department of Economic Affairs, said in an official statement.

The statement came ahead of AIIB’s third annual meeting currently underway (June 25-26) in Mumbai, India’s financial capital, with innovation and collaboration as its theme.

AIIB is the first major multilateral development bank where principal contributors are the borrowing members themselves. While 75% of the capital is from Asia, several non-Asian regions like Europe, North America, some East African and Latin American countries have also joined the bank as members.

Borrowing from AIIB is preferred by a number of countries as it charges about one to 1.5 per cent interest with long term repayment including five-year grace period.

Indonesia has emerged as the second largest borrower with about US$ 600 million loans.

AIIB’s Balancing Act

On 24 June 2016, the AIIB board approved its first four loan projects totalling US$509 million – which more or less put to rest the speculations about the long-term aims and intentions of AIIB.

AIIB project was first announced in October 2013 simultaneously with Chinese President Xi Jinping’s overland Silk Road Economic Belt and Maritime Silk Road initiatives – the two pillars of China’s Belt and Road Initiative (BRI).

The initial scepticism was therefore that the AIIB was primarily a vehicle to fund BRI-related projects to promote connectivity in Asia as well as to further China’s strategic goals, several critics had pointed out then.

That India has become an important recipient of AIIB loans is noteworthy and indicates the degree of independence of the AIIB from the BRI.

India has reiterated its reservations about the China-Pakistan Economic Corridor (CPEC) time and again. It was the only country in the eight-nation Shanghai Cooperation Organisation meet held earlier this month which refused to endorse China’s ambitious Belt and Road initiative for which Beijing has signed pacts with nearly 80 countries and international organisations.

As a report in Australian Institute of International Affairs, a leading think tank, states, “…For critics focused on poverty reduction there is a slum upgrading project, and for markets, there are road and power projects. For regional supporters, there are two continental projects linking to China’s Silk Road plan but also a project in South Asia and one in Southeast Asia, projecting an expansive view of China’s support for the region.”



Enjoyed this story? Share it.


Lamat R Hasan
About the Author: Lamat is an Associate Editor at Asia News Network.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

China-US trade deal bullish news for both countries, rest of world

From Chinese state media. State Councilor and Foreign Minister Wang Yi said Saturday that the China-US deal on the text of a phase-one economic and trade agreement serves as bullish news for both countries and the rest of the world. Speaking at a joint press conference with Slovenian Deputy Prime Minister and Foreign Minister Miro Cerar, Wang said China has, as always, been opposed to settling economic and trade disputes by imposing tariffs as there is no winner in a trade war. China has also rejected the use of unilateral pressure as it violates the rules of the World Trade Organization (WTO), said Wang. He pointed out that following rounds of back-and-forth negotiations, China and the United States have agreed on the wording of a phase-one economic and trade agreement, and the US side has promised to phase out additional tariffs on Chinese products. The agreement demonstrates the spirit


By Esther Ng
December 16, 2019

Economics

China, US in constant touch to resolve trade issues

China and the United States are in constant touch to resolve pending trade and economic issues, the Ministry of Commerce said on Thursday. The comment came ahead of Sunday’s US deadline for another scheduled round of tariff increases on Chinese imports worth almost $160 billion. If a trade deal is not struck by Sunday, computer monitors and toys will be among the Chinese export items likely to be affected. Gao Feng, a ministry spokesman, said the Customs Tariff Commission of the State Council has already worked out tariff exemptions on some soybean, pork and other products shipped from the US — the latest sign of tensions easing in the protracted trade conflict. The US seems to resort to brinkmanship by using a tariff deadline to pressure China in the ongoing trade talks for a phase one, preliminary deal, said Chen Wenling, chief economist at the China Center for International Economic Exchanges


By Esther Ng
December 13, 2019

Economics

Report: US officials lied about Afghanistan

Civilian, military officials misled public for nearly two decades about status of war, Washington Post review of documents finds. For nearly two decades, senior US civilian and military officials didn’t tell the truth about the war in Afghanistan, The Washington Post reported on Monday after reviewing more than 2,000 pages of government documents. The officials made pronouncements they knew to be false and hid evidence that the war had become unwinnable, the newspaper said interviews with those officials show. John Sopko, the head of the federal agency that conducted the interviews, acknowledged to the Post that the documents show “the American people have constantly been lied to”. The newspaper said that two major claims in the documents are that US officials manipulated statistics to suggest to the American public that the war was being won and that successive


By Esther Ng
December 11, 2019

Economics

7 of 10 Filipinos worried by presence of Chinese workers

China has increased its presence in the archipelago. The rising presence of Chinese workers in the country worry seven out of 10 adult Filipinos, according to the latest Social Weather Stations (SWS) survey, as the government recently launched a crackdown against Philippine offshore gaming operators (Pogos) which mostly employ Chinese nationals. The noncommissioned survey, conducted from Sept. 27 to 30, found that 31 percent “worried a great deal,” while 39 percent are “somewhat worried.” Highest in Metro Manila The proportion of those who were worried about the increasing number of Chinese workers in the country was highest in Metro Manila at 75 percent, followed by the Visayas at 71 percent, Luzon outside Metro Manila (69 percent) and Mindanao (67 percent.) About half of the respondents agree that the rising number of Chinese workers is a threat to national secur


By Philippine Daily Inquirer
December 6, 2019

Economics

Pakistan to launch Digital Pakistan Vision

Imran hopes to unleash ‘potential of youth and women’ with new venture. Prime Minister Imran Khan on Thursday said that with the introduction of the ‘Digital Pakistan Vision’, the full potential of the contribution of youth and the women to the economy will be unleashed. According to a press release from the Prime Minister Office: “The Vision sets Pakistan’s digital ambition and has been designed for the government and the private sector to work towards a digitally progressive and inclusive Pakistan.” Speaking at the launch ceremony of the initiative, the prime minister regretted not having launched it at the very beginning when his government was formed. “I should have given attention to Digital Pakistan earlier. This is the most important thing for Pakistan right now, especially its youth. The whole world is moving forward digitally and we have been l


By Asia News Network
December 6, 2019

Economics

Thailand looks to become LNG hub

Energy Minister Sontirat Songtijirawong declared at a conference. The Energy Policy Administration Committee today (December 4) acknowledged the guidelines for turning Thailand into the regional trading hub of liquefied natural gas (LNG). The guidelines came about from a study assigned by the government-appointed energy reform committee to PTT. Energy Minister Sontirat Songtijirawong said that the move was estimated to generate Bt165 billion for Thailand’s economy between 2020 and 2030. The country is expected to start full commercial trading late next year or early in 2021. Thailand has potential to become the regional hub due to its high demand of LNG and its geographical location as the centre of countries with high LNG demand, namely China, India, Japan, Cambodia, and Vietnam. Moreover, Thailand has a supportive infrastructure to serve regional LNG tradi


By The Nation (Thailand)
December 5, 2019