Asian Infrastructure Investment Bank (AIIB) Formation

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China’s formation of the Asian Infrastructure Investment Bank (AIIB) in 2015

Introduction

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.  

How did policymakers define or represent the situation?

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].

How did policymakers perceive the situation as potentially beneficial or potentially threatening to their interests?

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].

What possible alternatives did policymakers consider, or fail to consider, that might have been taken into account?

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].

What were the main successes and/or failures of the policy?

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.

Conclusion

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.

Bibliography

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[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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