The Business Standard reports that India’s former Chief Secretary of Gujarat, D J Pandian, has been appointed to “vice-president and chief investment officer” of the China-led AIIB. Pandian is a former officer in the Indian Administrative Services. He has previous experience in deputation with the World Bank and also served as the Managing Director of the Gujarat State Petroleum Corporation. China, India, and Russia are the three largest shareholders in the AIIB, with respective owner-stakes of 26.06%, 7.5%, and 5.92%.
China's "Lion Share" of AIIB Voting Shares not so large in the long run
AIIB president, Jin Liqun, stated that China's powerful hold of voting shares in the bank will gradually decline as the bank expands and more states sign on. Furthermore, Jin need that China will not seek to hold onto its veto power in the future, unlike the United States' veto power in similar institutions such as the World Bank.
Is China and Russia's relationship all that concerning to the U.S.?
This article lays out some of the pros and cons that Russia and China have concerning their relationship. The AIIB was mentioned as a pro for both China and Russia, as Russia plays an important part in the One Belt, One Road Initiative as well as holding a decent portion of voting shares within the AIIB. The article does mention, however, that Russia and China might also not see eye to eye on certain topics concerning their dealings with the United States.
Exclusive: US Exim eager to work with China’s AIIB
Bermingham reports on an interview with US Export-Import Bank chairman, Fred Hochberg. In the interview with Global Trade Review, Hochberg noted that he would be open to working on projects with the China-led AIIB, in spite of the US government’s decline to join the bank. Provided that the bank meets “requisite social and environmental standards,” Hochberg said that the US would pursue relations with the AIIB. Hochberg noted that institutions, like US Exim, AIIB, and New Development Bank, promote commerce, and bring greater economic prosperity to members. Bermingham adds that US Exim officials generally agree that the US refusal to join the AIIB was a “missed opportunity to exert some influence in the bank [AIIB].” Bermingham also asserts that US Exim is currently pursuing investment opportunities, as it has allocated over $2 billion in funding since its reauthorisation in December.
China’s Belt and Road initiative ripe with possibilities
A 2015 report by the Fung Business Intelligence Centre details the infrastructure plans for the newly opened AIIB. The Silk Road Initiative and the AIIB will dualy support ‘infrastructure construction’ by funding construction machinery companies, infrastructure operations, and building materials industries. The report also forecasts that the Silk Road project may internationalize the yuan, which has recently been added as an International Monetary Fund’s special drawing rights currency. It also highlights that demand for the yuan may increase, due to greater bond activity in Asian markets. Demand for settlement in yuan-carrying regions may also increase, in order to reduce the risk of currency exchanges. The article lastly mentions that China intends to establish more free trade zones as a part of Silk Road.
AIIB: Driving forward with global power
The article overviews recent changes in China’s economic operations. Attempting to ‘decelerate growth and improve quality,’ China has pursued an “active macroeconomic economy” following the 2008 financial crisis. Li Kun asserts that as a part of this economic shift, the AIIB could potentially benefit both Western and Asian nations, as Western countries could drive development, and Asian countries could construct more integrated financial markets. Li Kun stresses that following the 2008 crisis, the international financial order failed to “adjust to the transformation of global economic power.” Li Kun asserts that the AIIB will help emerging economies enter this new economic world order.
Asian Infrastructure Development Bank able to compete with biggest financial institutions
The article asserts the AIIB will be able to “strongly compete” with financial institutions like the International Monetary Fund, World Bank, European Bank for Reconstruction & Development, and Asian Development Bank. AIIB President, Jin Liqun, highlights that in contrast to the US’ role in the World Bank, China has no intention of utilizing its veto power, or expand its vote share, in the AIIB. Furthermore, Jin Liqun stresses that “transparency, openness, independence, and accountability” will be the main principles of the bank, and will help to set itself apart from other institutions. While some officials point out that the AIIB has forced other institutions to reconsider their framework, others note that the AIIB will have to “go to great lengths to compete with [existing multilateral banks] on the same level.”
Despite AIIB Membership, Jakarta Should Not Align with Beijing Politically
The implementation of the high speed railway in Indonesia will drastically increase Chinese investment in Indonesia. Although Jakarta and Beijing have a collaborative relationship in infrastructure development, Jakarta should remain neutral on political issues, including the disputed South China Sea.
AIIB's Infrastructure Projects will have Positive Spillover Effects for Involved Countries
The Thai Government is finalizing plans to implement the construction of a medium speed railway funded by the AIIB. This project, and many others that the AIIB has in the works, will have massive spillover effects for trade, distribution, retail development, and the yuan on the world market.
France Deepens Military Ties with India and Financial Ties with China
French President Hollande met with Indian Prime Minister Modi last week to finalize a transaction that would immensely boost India's air borne military capacity. The two leaders also discussed increasing intelligence sharing. Three months ago, Hollande traveled to China to further France's financial relationship with the Chinese. France and India both joined the Chinese led AIIB as founding members, despite the U.S.'s instance to boycott it. Both Paris and New Delhi are wary about Washington's current foreign policy in Asia.
The British Role in the Founding of the AIIB
Haggard asserts that Britain’s decision to join the China-led AIIB stimulated massive applications for membership by other OECD (Organization for Economic Cooperation and Development) countries. As the second OECD country to join the bank, numerous other western and Asian countries joined following the British bid for membership. Furthermore, Haggard emphasizes that while China retains a “unilateral veto power” in the bank, it also aims to increase international representation through the appointment of vice presidents.
Aneja argues that China lies at the forefront of a changing “geopolitical architecture.” Citing the creation of three post-Bretton Woods investment banks, Aneja postulates that the AIIB, European Bank for Reconstruction & Development (EBRD), and New Development Bank (NBD or BRICS) could tap into Eurasian financial markets. Aneja stresses that Western powers are much more eager to invest in Eurasian transportation, integration, and political initiatives, citing the ‘One Belt, One Road’ campaign as a crucial project. Aneja reports that officials of AIIB and EBRD aim to jointly address issues such as climate change through sustainability initiatives. Additionally, Aneja writes about the numerous partnerships that have sprung up between China and Eastern European countries, which are aimed at increasing transportation ties between Central Asia and Europe. Aneja lastly reasserts that the AIIB and NDB will work closely with one another, as the two new institutions might ‘come together through totally different approaches.’
Lee to head KDB; Hong to take up AIIB vice presidency
Head of the state-run Korean Development Bank, Hong Keetaek, will be replaced by Lee Dong-gul, a former Chairman of Shihan Investment. As Lee heads to the KDB, Hong will take one of AIIB’s vice presidencies. Selected by the AIIB’s Board of Directors, Hong will assume the role of chief risk officer.