​Dean of the Center for International Business Ethics at the Beijing based University of International Business and Economics, Liu Baocheng, responds to questions concerning the AIIB's initial projects and structure. Watch the full interview HERE.

China's forward movement despite minor setbacks

Although China faces a sticky situation with its slowing GDP, there is still ambition as President Xi Jinping looks forward into 2016, particularly with the opening of the China-led Asian Infrastructure Investment Bank, which will be instrumental for Xi to emphasize the "One Belt, One Road" initiative.
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Indonesia is in prime position, being strongly considered as the first recipient of an infrastructure loan from the bank (about 450 billion USD). The Philippines, India, and Vietnam are also strong contenders for the first loan; therefore, this is perhaps where it is to Indonesia's advantage to have a much higher voting share than any of the other countries vying for initial loans.


Philippines to keep interest in AIIB involvement separate from South China Sea conflict  (Tagalog)

Philippine officials try to make clear that the on-going territorial dispute between the Philippines and China over islands in the South China Sea will not affect the Philippines pending membership status with the Asian Infrastructure Investment Bank. These are two separate issues and the dispute is only one aspect of the multi-faceted relationship between the two countries. 
                                                                                                              *Translation by Joey Balledos


Is the world REALLY ready for the AIIB?

"The China footprint" by Jason Lee of REUTERS takes the 3rd spot on the top 10 biggest risks of 2016. The concern of this being a risk stems from the fact that China is now asserting its prowess as a major international influence. There is still also the concern that the AIIB's projects and governance will be biased and fall prey to China's poor track record in good governance. It is mentioned that the world might not be adequately prepared for (or agree with) what China has in mind with its new and upcoming projects.


AMRO to launch as Asian version of IMF this spring 

The Japan Times reports that an Asian equivalent to the International Monetary Fund, or IMF, will launch this spring. A Singapore-based institution, known as the ASEAN Macroeconomic Research Office (AMRO) is expected to be upgraded to the level of an official international organization. Historically led by Japan, AMRO possesses 13 member countries, ten of which belong to the Association of Southeast Asian Nations, while the remaining three include Japan, China, and South Korea. Known as the largest contributors to AMRO, both Japan and China possess considerable sway within the organization. The Japan Times hypothesizes that China would greatly augment AMRO’s influence, given China’s significant clout following the establishment of AIIB and the introduction of its yuan to the IMF special reserve currency. 
 

China’s Dilemma over Land and Sea Routes 

Colarizzi questions whether China may be focusing too much on its development of a high speed rail line between Xinjiang and West Asia. Rathern than stressing connectivity and continental access, Colarizzi questions if the nation is overemphasizing rail development. Colarizzi suggests that as a part of its Silk Road Initiative, China also take time to develop other maritime routes connecting the Asian Pacific to other regions, and also asserts that with enhanced transport should also come the construction of infrastructural entities, like ports and shipping complexes. Colarizzi lastly writes that at the moment, sea transport is the most viable option for transporting goods and exports, as it’s rail line may take several years to complete.
 

Investors fear 'hollow' US-EU alliance 

Due to growing foreign policy differences and the formation of new alliances, some analysts are projecting a decrease in cooperation between the US and European Union nations. Hirano states that a report published by the Eurasia Group ranks the ten biggest risks throughout 2016. Hirano asserts the US and European nations possess differing responses to global security threats, such as the Islamic States, which may contribute to the projected decrease in cooperation. The report also ranked “China’s footprint” third on their list, citing their recently established AIIB, as well as their growing political clout.
 

Turkey must harmonize laws with China-backed bank before Jan. 16 
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In order to appoint a representative to AIIB’s board, Tekdal reports that Turkey must forge an agreement between Turkish domestic law and the bank’s legal structure. In order for countries to appoint representative to the Chinese bank, each nation must assure that their local legislation concurs with the AIIB founding agreement. AIIB administration is composed of a board of governors and a board of directors. Tekdal asserts that in order for a country to appoint a director to the AIIB board, they must attain at least 6% of AIIB member’s votes. In order to appoint a Turkish representative, the country has teamed up with other AIIB member-nations, such as Brunei, Azerbaijan, Georgia, Kyrgyzstan, and Pakistan. Tekdal notes that this collectivity has agreed to appoint a Turkish representative for 7 years, and a Pakistani representative for the remaining 3 years of each director’s 10 year term to the AIIB board. Meetings regarding AIIB will next convene on January 16, in Beijing, in order to discuss the agreements.
 

AIIB funds may be tapped for PPPs

The National Treasurer of the Philippines reports that the country may receive funding from AIIB in order to implement Public-Private Partnership Projects. Within this category, the AIIB could help to finance domestic projects such as mass transit, water, and telecommunications development. The Philippines possess an estimated 55 PPP projects, and will develop and submit proposals for them to AIIB. The Philippines must still ratify AIIB membership before becoming an official member of the bank.
 

AIIB to focus on investment in information technology infrastructure 

AIIB President-designate, Jin Liqun, reports that the bank is devoted to advancing investment in information technology. Jin elaborated that information technology foster integration within regional and global economies by boosting connectivity. Jin also stated that potential investments in technology would include “fixed broadband networks, fiber optic telecommunication cables..wireless sensor networks, satellite services, new generation mobile telecommunication networks, cloud computing, and big data platforms.” Overall, Jin stressed that the AIIB will facilitate “financial support for infrastructure development and regional connectivity in Asia.”
 

China, Britain vow AIIB cooperation, visa facilitation 

Chinese Foreign Minister Wang Yi recently met with his British counterpart, Philip Hammond in Beijing. The two ministers discussed increasing cooperation on industry, culture, and finance. Wang reportedly signaled China’s readiness to cooperate more on nuclear power, rail way development, and AIIB. Additionally, a press release also reported that the two countries would relax visa regulations by mutually issuing “multiple-entry visas for up to two years to each other's citizens.” The two leaders also agreed to communicate more openly within international organizations such as the United Nations and the World Trade Organization. 


AIIB tipped as buyer of Wan Chai building 

The Standard reports that AIIB is one of several buyers interested in purchasing the Dah Sing Financial Centre in Wan Chai. Worth between $9-12 billion, government officials denied reports that AIIB had purchased the centre.
 

Media: the first annual meeting of the AIIB will be held in June in Beijing 

The AIIB’s first annual meeting, which includes all member countries, will be held this June in Beijing. The meeting will occur at the level of the board of governors, rather than being presented to Finance Ministers of the member countries. Additionally, AIIB’s board of governors and board of directors will meet in mid January to appoint an official bank president. It is expected that the president designate, Jin Liqun, will be selected as president.
 

Beijing To Host First Annual AIIB Meeting In June, Lending To Start In Q2 

The AIIB is expected to begin lending in its second financial quarter, as reported by China Daily. The bank will host an official meeting in Beijing in June. Later this month, the bank’s board of directors and board of governors will meet to elect AIIB’s first president and “12 constituency directors.” The bank has 57 founding members, with more countries projected to join throughout 2016.
 

US Congress gives in and passed the IMF quotas reform 

Rodríguez stresses that the IMF has eased regulations that have increased Chinese influence. For instance, in November 2015 the IMF incorporated the Chinese yuan into the organization’s special drawing rights, reserve currency basket. Most recently, Rodríguez reports that the IMF has reformed its quotas representation system, which allows China and other emerging market-countries to expand their influence. While other European countries will lose power to offset the reforms, the US will retain its veto powers. Rodríguez questions the extent of the reforms, since the US still holds on to considerable influence in the IMF, and could veto the proposals of any emerging powers.
 
 
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The Philippines joins China-led Asian Infrastructure Investment Bank

The Philippines has signed on as the 57th founding member of AIIB, as reported by CNN Philippines. Taruc states that the Philippine infrastructure gap will reach nearly $127.12 billion between the years 2010-2020. Noted as China’s “second-largest trading partner” in 2014, the Philippines anticipate an extension of their infrastructural capabilities and an increased role in “bankable projects.” Taruc lastly adds that the AIIB will host an inaugural meeting of its Board of Governors and Board of Directors in Beijing in mid January. 


Parliament ratifies AIIB’s Articles of Agreement 

The Nepalese Parliament has ratified AIIB’s Articles of Amendment, making the country an official, founding member of AIIB. Nepal’s Finance Minister, Bishnu Prasad Poudel hopes that the country will benefit in its infrastructure development and productive sectors. The article reports that Nepal will purchase 806 shares in the bank, which amount to nearly $16.2 million. Classified amongst fellow AIIB members as a ‘least developed bank,’ Nepal will pay for shares in installments, over a period of ten years. Government officials caution that Nepal must spend nearly $13-18 billion to finance their infrastructure gap. Some worry that the government’s capacity to absorb capital may hinder infrastructure development.


Recapping 2015, in numbers 

Examining several of 2015’s leading stories in geopolitics, Newby regards the AIIB’s formulation as a noteworthy occurrence. Gaining a total of 57 founding members, Newby remarks that the exclusions of ‘established powers within AIIB’, such as the USA and Japan, still possess untold repercussions. In addition to AIIB, Newby’s report included other events, such as the recent downfall in the Chinese stock market, Chinese President Xi Jinping’s visit to the White House, and the establishment of the Trans-Pacific Partnership.


China’s assertiveness pushes Vietnam toward an old foe... the United States

Denyer reports that relations between Vietnam and China have soured in recent decades, leading Vietnam to increasingly depend on the US. While the Vietnamese economy appears to welcome economic supports from AIIB, Denyer asserts that the country is weary of a hidden agenda in Chinese projects like the Silk Road Initiative. Referring to the development of a high-speed rail across the ancient silk road route, Vietnamese officials claim that the Chinese have forced unfair and costly conditions for railway contracts on Vietnamese soil. For instance, Denyer explains that a Chinese-led rail project currently runs ‘three years behind schedule and 57 percent over budget.’ Due to loan obligations, Vietnamese officials are unable to replace Chinese contractors, or what they allege as ‘outdated technologies’ being installed by Chinese companies. As a result of such complaints, there has been an increase in cooperation between the US and Vietnam. For instance, the US has decreased several arms embargoes on Vietnam, thus allowing Vietnam greater capacities for self-defense against Chinese territorial claims in the South China Sea. Additionally, the US included Vietnam within their Trans-Pacific Partnership, which notably, excludes China. Though Vietnam is a member within AIIB, Denyer suggests that Vietnam’s role in the TPP could augment its economic prospects without Chinese aid.


The Year That Was: China Repositioning For Slower But Steady Growth   

This article recapitulates several key occurrences in China’s economy throughout 2015. For instance, RTT hypothesizes that due to a weakened demand for exported products, factory overcapacity, and increased debt, the Chinese government altered policies to support domestic consumption. As a result, Chinese stock suffered due to economic and investment slowdowns. However, RTT positively reported that November 2015 brought the inclusion of the Chinese renminbi within the International Monetary Fund’s Special Drawing Rights basket. This allows China greater movement within international financial institutions. Additionally, China announced its official establishment of its AIIB in 2015. The bank is projected to open in early January 2016. RTT concludes the piece by asserting that the Chinese government will also address issues such as pollution, income inequality, and poverty reduction throughout 2016.


Pakistan is China’s only all-weather strategic partner         

The articles is based on reports by a daily publication, which asserts that the relationship between Pakistan and China “has expanded from political and security fields to economy and trade, climate change, food and energy security.” The article claims that relations between the two countries on not based on ideology, but rather, similar visions of security and strategic interests. Greater Kashmir suggests that Pakistan and China possess mutual stakes in one another, such that membership in entities such as AIIB, the Shanghai Cooperation Organization, or The South Asian Association for Regional Cooperation, will solidify bilateral activities.  


Hectic Year of trips brought acclaim and growing influence to country    

In efforts to broadcast its Silk Road Initiative and Asian Infrastructure Investment Bank, the article states that China has increased its international relationships throughout 2015. Emphasizing China’s emerging role as a leader in the global economy, the article cites Western members in the AIIB as evidence of growing clout for Chinese institutions. Further evinced by the Chinese renminbi’s inclusion as an International Monetary Fund special reserve currency, China appears to have solidified relations with Western nations.  


Senior MP wants Iceland to quit AIIB            

The article reports that Frosti Sigurjónsson, Member of Parliament for the governing Progressive Party and Chair of the Parliamentary Committee for Economic Affairs and Trade, disfavors Icelandic membership in the China-led AIIB. Believing that the Iceland’s financial contributions to the bank could be better spent on national issues. Sigurjónsson further asserts that participation in AIIB gives the bank and its employees immunities from surveillance and taxation. The article states that such immunities would require special provisions granted by the Icelandic parliament. While other officials think that membership will enhance Iceland’s relations with Asian nations, Sigurjónsson retorts that Icelandic representation in the bank’s shares occupy a minuscule percentage, such that the country’s influence on AIIB policies are limited.


Foreign Ministry Spokesperson Lu Kang's Regular Press Conference on December 31, 2015

Foreign Minister of China, Lu Kang, issued several statements in a press conference summarizing the nation’s diplomatic achievements throughout 2015. Regarding the Asian Infrastructure Investment and BRICS banks, Lu Kang stated that both institutions aim to construct “a new type of international relations featuring win-win cooperation.” The People’s Republic of China intends to play an active part on major world issues such as climate change, security, diplomacy, and others through methods of ‘international cooperation.’ Lu Kang cites other 2015 projects, such as the China-UN Peace and Development Fund, Belt and Road Initiative, and the China-ASEAN Free Trade Area as hallmarks of 2015’s diplomacy.


The ongoing geo-political changes of 2015 

The article summarizes some of the major changes that affected diplomacy throughout 2015. Xinyu remarks that the rise of the Islamic State, or IS, has made western powers more dependent on Beijing. Pushing the US to remain active throughout the Middle East and distracting from efforts in the Asia Pacific, Xinyu asserts that global leaders throughout the US, Europe, and Russia have relied upon China for additional supports. Regarding China, Xinyu affirms that the international economic system has also made remarkable changes in 2015. Citing developments such as China’s AIIB, the multilateral BRICS bank, the IMF’s introduction of the Renminbi in the reserve currency basket, and the US-led Trans-Pacific Partnership, Xinyu insinuates that global economic entities have increasingly integrated emerging markets and investors.


‘Hot peace’ to take hold in East Asia 

The Herald regards 2015 as a year of regional conflict throughout the Asia Pacific. Citing territorial disputes in the South China Sea, the continuation of Silk Road economic policy, and the creation of its AIIB, Song Sang-ho regards China as a having instigated regional tensions through 2015. The author projects that China will continue developing these initiatives throughout 2016, but with efforts targeted towards economic revitalization in order to reverse economic downfalls of 2015. Additionally, the author foreshadows increasing relations between the US and China due to continued terrorism throughout the Middle East. At the same time, Song Sang-ho notes that such global tensions may push the US to engage its other Asian allies, such as Japan and South Korea, to jointly eliminate security threats such as terrorism.



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