Author: Chen Qingqing
Posted on: Global Times, January 17th,2017
The first China-initiated multilateral bank has approved funding for more projects than expected just one year after it was launched, a demonstration of China’s capability to reshape existing international financial institutions, experts said.
Since the launch of the Asian Infrastructure Investment Bank (AIIB) in Beijing on January 16, 2016, 57 countries have signed up as members, including 37 in Asia and 20 non-regional countries.
So far the bank has approved nine projects totaling $1.73 billion, according to an e-mail the bank sent to the Global Times late Sunday night. The projects are intended to promote green infrastructure and have also prioritized cross-border projects ranging from roads to energy pipelines across Asia.
Usually an infrastructure project funded by the World Bank (WB) or the Asia Development Bank (ADB) takes three to five years from proposal to approval, but the AIIB has signed off on more than expected, which reflects its efficiency, said Zhou Qiangwu, director general of the International Economics and Finance Institute, a think tank under the Ministry of Finance.
Three of these projects were financed by the AIIB itself, while the other six are conducted along with other multilateral development banks (MDBs). The AIIB has signed co-financing framework agreements with MDBs such as the WB, ADB and European Bank for Reconstruction and Development (EBRD), with the aim of looking for more financing channels for the projects.
«Broad cooperation with other international institutions gave the AIIB various financing channels and this helped it to become efficient,» said Zhang Jianping, director general of center for regional cooperation of Chinese Academy of International Trade and Economic Cooperation.
The WB and the ADB had been working on some projects but lacked capital support, and the AIIB was able to join them.
«In addition, without a permanent board of directors, there is less bureaucracy in decision-making procedures,» Zhang said, compared with other MDBs.
The AIIB will focus on scaling up support to clients, bolstering financial sustainability and continuing to pave the way for market access.
The bank is expected to improve the implementation of its policies, and continue to recruit more talented staff in 2017, Zhou noted. «Also, it will set out to solve issues faced by other MDBs including the disclosure of information and communication with the public in particular,» he said, predicting that the financing scale this year will be surely larger than 2016.
Zhang said the AIIB may consider more projects along the One Belt and One Road initiative in the new year.
In terms of introducing new members, experts said the China-initiated bank always holds an open attitude toward potential US membership under the upcoming Trump presidency, «but the US’ high debt ratio and anti-China sentiment in the cabinet make it unlikely,» Zhang said.
The first year of operations shows that China, as one of the biggest shareholders, is playing the constructive role in the bank’s governance structure, and is capable of working well with other shareholders and the management of the AIIB for a lean, clean and green institution, Zhou noted.
«The AIIB’s high efficiency exerts pressure on existing international institutions like the ADB and the WB to institute further reforms,» he said.