Countries Announce Major Phase-Out Of Coal Plant Financing 

Countries within the Organization for Economic Cooperation and Development (OECD) will halt export credits for the financing of coal plants. Except in those circumstances where there are no viable alternatives, or where the most efficient of technologies are used, OECD nations intend to phase out public financing for coal plants throughout the world. Ignited after US President Barack Obama issued a speech in 2013 admonishing credit exports to coal-fired plants overseas, the World Bank, European Investment Bank, and several European nations began to issue similar declarations. Now, the OECD has announced its phase-out, as well. The authors assert that developed countries must now dissuade other emerging economies, such as China and its AIIB, from replacing these gaps in export credits. Bovarnick and Ogden stress that countries must work together to control public investment for  projects with high rates of carbon emissions and pollution.


​AIIB Union Cabinet Has Ratified the AIIB Articles

The official ratification of the AIIB articles will allow member countries to raise and avail resources for their infrastructure projects. This is India's chance to become a major player in a multinational institution. India hopes to become the second largest shareholder in the AIIB after China and is currently one of the largest borrowers. 


With Chinese and American Trade Deals on the Table, Asian Countries are having to Pick Sides 

Although China was not initially included in the TPP, a US lead trade deal, the Chinese will have to think about joining at some point, according to the director of global operations at General Electric. However, the President of China is encouraging other leaders in Asia to align themselves behind the Free Trade Area of the Asia Pacific, which is a free trade zone that APEC has been on APEC's agenda for a long time. 


Countries turn to AIIB as Other Banks Remain Stagnant

Although the BRICS Bank structure is still an effective one, other lending backs, such as the IMF and the World Bank have not adapted to demands for change. The delay in needed reforms has caused countries to turn to other sources, including the AIIB. 


The AIIB and a New Asian Financial Order Living Parallel Lives 

China’s developing AIIB and Silk Road Initiative have signalled the country’s dominance in Asian and global economies. The article postulates that China will use its developing institutions as opportunities to actively modify international norms of diplomacy and banking. Some warn that the Bretton Woods institutions should stop paying heed to these new institutions, cautioning that they should let the AIIB rise or fall on its own merits. The author further asserts that AIIB’s multilateral structure demonstrates that China is not attempting to undermine world orders, but rather, insert itself into existing geopolitical and diplomatic affairs. 
 

Chinese Leader calls for free, fair trade 

Statements made by China’s President, Xi Jinping, at last week’s Asia Pacific Economic Cooperation (APEC) summit. Xi stressed that the region should engage in free and fair trade, which would be made possible under China’s “Free Trade Area of the Asia-Pacific” (FTAAP) trade pact. Xi cautioned that rival groups, such as the US-led Trans-Pacific Partnership (TPP),  may cause fragmentation in the region. 


India ratified articles of agreement of the Asian Infrastructure Investment Bank 

India has ratified its Articles of Agreement for membership in the AIIB. The bank will help India and other member countries to raise resources for infrastructure and sustainable development projects. Membership allows India to play a more prominent role in the governance of a multilateral institution; it is the second largest shareholder in the bank, behind China.
 

China's role in promoting regional connectivity appreciated: Thai official 

In a statement released by Vitavas Srivihok, Deputy Permanent Secretary of the Thai Ministry of Foreign Affairs, Srivihok asserted Thai appreciation of China for their role in promoting regional connectivity in Asia. Through platforms such as the AIIB or Silk Road project, Thai officials anticipate the promotion of trade, investment, and tourism between Thailand and China.
 

China vows to help push growth in Asia Pacific 

China has encouraged members of the Asia-Pacific Economic Cooperation (APEC) to fast-track the agreements for the Beijing-led Free Trade Area of Asia Pacific (TFAAP). Ordinario and Cuaresma write that the marked increase in regional free-trade (both the TFAAP and the US-led Trans-Pacific Partnership) agreements may contribute to fragmentation, which is also a marked concern of China.
 

Vice President and Chief Administration Officer (Job Vacancy) 

The Asian Infrastructure Investment Bank is hiring a Vice President and Chief Administration Officer. Primary responsibilities include leadership of the planning, implementation, and supervision of Human Resources Management, Information Technology, and Facilities & Administration Services. AIIB seeks candidates with 20-25 years of leadership in management, with particular experience in multilateral banking institutions. Applicants from all nations may apply; applications will be accepted no later than December 10, 2015.
 

President ratifies AIIB Membership Bill

Maldives President, Abdulla Yameen Abdul Gayoom ratified the AIIB Membership Bill, passed by the nation’s Parliament. The act’s main objective is to ensure that the terms of AIIB membership accord with the Constitution of the Republic of Maldives.
 

AIIB membership approved

Luxembourg’s parliament has approved the country’s accession to the AIIB, according to a statement that the Luxembourg embassy in Beijing sent to the Global Times.
 

AIIB melding, not moulding, Global Governance

As the Asian region is increasingly shaped by China, it’s become clear that the Chinese also seek greater influence in global governance. While China has taken overt steps to promote inclusivity within the region, they’ve also demonstrated frustration with the possibility of fragmentation in the Asia-Pacific, which Grégoire-François postulates may lead China to join the US-led Trans-Pacific Partnership. Grégoire-François also asserts that the AIIB offers the world a chance to reform existing financial organizations, such as the Bretton Woods institutions, and yet also provides China with the growing space to adopt some western standards. Overall, Grégoire-François stresses that China be given the opportunity to lead change within international financial orders.


We hope that you enjoyed this week's digest. Check back with the blog next Tuesday for another weekly update.


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US Should Join AIIB and Foster Trade Relations with China 

The U.S. should cooperate with China rather than excluding them, which seems to be the current policy, as evidenced by Washington's refusal to join the AIIB and exclusion of China from the TPP. The U.S. and China should initiate negotiations over the FTAPP which is larger and more inclusive trade deal  than the TPP, which is being called the "everyone but China club" and the "economic NATO". 


ADB and World Bank Staff Speak Off the Record on the AIIB

The new banks - the Asian Infrastructure Investment Bank and New Development Bank - according to an the ADB employee, do not know how to do development and are focused on financing rather than development as a whole. 

The AIIB needs to be successful at development and financing in order to be effective at being a political institution. The former director general for private sector finance at the ADB expressed doubt that the AIIB was the best way for China to gain footing in the political arena. 

An ADB staffer stated that the ADB is not keeping pace with the growing Asia economy. Due to the different organizational structure and policies of the AIIB, many ADB staff have considered changing banks and some already have - most notably the president-designate of AIIB was the vice president of ADB. 


UK Officials Increase Ties with China, Despite Opposition from British Citizens

The U.K's increasingly close ties with China have influenced Germany and France to also increase their ties with China, despite the U.S's concerns. This has created British citizens who oppose UK-China relations to speak out against these relations due to China's human rights abuses. 


Investment Bank legislation passes third reading 

In a statement released by the New Zealand government, the country’s finance minister welcomed the passage of the “International Finance Agreements Amendments Bill,” which will allow New Zealand to join the AIIB as a founding member. New Zealand was the first western, developed nation to join in negotiations on the bank. Finance Minister Bill English reiterated his hopes that membership will consolidate New Zealand’s political relationships in Asia. 
 

Moody’s: Institutional Debt to enhance funding diversity for Asian infrastructure 

Moody’s Investors Service is forecasting that participation in the AIIB by international investors will diversify the the funding sources available for Asian infrastructure. Moody issued a report, which articulates that institutional debt investors are increasingly investing in institutions like multilateral development banks, since long-term investments coincide with long-dated liabilities in their terms of agreement. This type of investment offers firms a diverse portfolio in their investments, and provides more favorable, risk-adjusted returns. Additionally, Moody asserts that institutional debt investors may promote a virtuous cycle in development lending, as other Asian asset-classes will be motivated to invest in the region, thus continuing the accumulation of private capital in multilateral institutions. Banks benefit, as they gain investment funding; in turn, nontraditional development lenders diversify their portfolios.
 

​EBRD sends China membership plan to governments for approval

The European Bank for Reconstruction and Development (EBRD) has send its board of approval and members-states China’s bid for membership in the bank. If accepted, as is expected by many, China will possess a .1% stake in the EBRD. Though small, the stake will allow China to extend its global influence between Asia and Europe. As a member-country, China will pay into the EBRD, rather than receive funds from it. In recent years, EBRD has expanded its efforts throughout the middle east, North Asia, and the mediterranean. Work in certain areas, such as Kazakhstan, will overlap with Chinese initiatives, such as the “One Belt, One Road” project.
 

A Border Boomtown in the Making 

China is devoting massive resources to the development of its border with Kazakhstan and Central Asia. Specifically in the Khorgos region, where Chinese and Kazakh borders meet, governments of both countries aim to convert this desert area to a metropolis comparable to China’s eastern hub of Shenzen. Khorgos will be a crucial station along the New Silk Road route, which will connect Europe with much of Central Asia. The installation of rail routes, high rise housing developments, and expressways have fostered growth in the region. Reeling from low oil prices, the depressed Kazakh economy welcomes Asian investment. Additional funding is expected to be provided by the China-led Asian Infrastructure Investment Bank, and regional New Development, or BRICS, Bank.

 
Taiwan Will Use 'Chinese Taipei' in Another AIIB Bid, Official from Island Says 

Taiwan will again apply for membership in the China-led AIIB. In April, the bank had rejected Taiwan’s bid for membership under the name “Chinese Taipai.” Taiwan wishes to use that name to indicate its historical dissociation from mainland China. Used in organizations such as the Asian Development Bank, Asia-Pacific Economic Cooperation forum, and the Olympics, Taiwan wishes to utilize “Chinese Taipai” as a baseline for recognition by Chinese authorities. Chinese President Xi Jianping has stipulated that Taiwan is welcome in the bank, so long as they apply under an “appropriate way”, such as using the name, “Taipai, China.” Xi has also been quoted as saying that so long as the two parties do not support the notion of “two China’s,” China and Taiwan will be able to devise a compromised solution under which Taiwan will seek AIIB membership. It’s noted that a majority of Taiwanese support membership in AIIB as a means to spur economic growth.
 

Opinion: 45 years in the making - Building the Canada-China relationship 

This opinion editorial asserts that China and Canada can stand to increase partnerships between the two nations. They possess a number of foreign policy accomplishments already, namely, the ratification of the Canada-China Foreign Promotion and Protection Agreement, a renminbi trading hub in Canada, and a developing nuclear energy cooperation. However, given the expansive scope of Asian economic investments, Beck asserts that Canada will increase its interaction with the Chinese. He suggests that the governments begin discussions on a Canada-China free trade agreement. Beck also promoted Canadian membership in the China-led Asian Infrastructure Investment Bank, as Canada might be able to finance part of the Asian infrastructure gap, and contribute to the development of sound-infrastructure practices in the institution. Beck emphasized that Canada might offer its espousal of democratic and transparent financial practices.
 

Asserting Itself 

Furukawa reports that Russia is attempting to boost its political capital throughout Central Asia by offering military supports. Previously, Russia created the Eurasian Economic Union as an attempt to maintain hold over countries such as Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. However, the country’s fledging economic status has decreased its ability to provide economic supports in the region. As a consequence, Furukawa asserts that Russia is trying to maintain its diplomatic stance by providing a military presence in the region. Furukawa emphasizes that political stability in the face of growing powers, such as the Islamic State, will allow for the success of initiatives of China’s Silk Road project.
 

China, Mongolia to Deepen All-round Cooperation
 
China and Mongolia released a joint statement, which outlined their intentions to augment strategic partnerships. The two sides will actively cooperate on China’s “One Belt, One Road” initiative and Mongolia’s Steppe Road plan. The statement also iterates that financing will be made available by the Asian Infrastructure Investment Bank, that China supports Mongolia’s bids for membership in the Asia Pacific Economic Cooperation, East Asia Cooperation, and East Asia Summit, and that the two will draft a program for a China-Mongolia-Russia east corridor.
 

China Set to make its mark on the G-20 

China is slated to begin its presidency of the G-20 at the conclusion of the upcoming Antalya summit in Turkey. This leaves the Chinese in a position to maximize their role in the international arena. In addition to the issues inherited from the 2013 G-20 in Russia, Tiberghien forecasts that China will present five distinct goals throughout their assumption to the G-20 presidency. Aside from its efforts to reform tax avoidance of large multinational companies, China is also set to continue with existing goals of fostering global growth, instituting regulatory reforms on banking and financial safety nets, elevating trade, implementing U.N. Sustainable Development Goals, and advancing commitments to infrastructure investment. Overall, Tiberghien also assesses that this presents China the opportunity to advance its AIIB launching and Silk Road initiative. 

China, Japan face off in new Asian Infrastructure Race 

The article argues that countries throughout Asia are expected to see an increased tension, due to competing bids for infrastructural and developmental projects. Curran posits that China and Japan may increase tensions between their current relations, as the Japanese-led Asian Development Bank, and China-led Asian Infrastructure Investment Bank, square off. Curran also mentions that the Philippines possess large-scale financial capital to contribute to investment in the region.


​Its Official: Chinese Legislature Ratifies AIIB Agreement 

China's top legislature just ratified the AIIB agreement. As the largest contributing member and founder of the AIIB, this ratification sets into motion the development projects that are aimed to begin next year, in 2016. The AIIB agreement is the legal architecture that will define the actions of the bank which is worth 100 billion US dollars. 


Taiwan Submits Last Minute Membership Request to AIIB

The long standing rivalry between leaders of Taiwan and China is being put aside in an upcoming meeting between the leaders in Singapore. The meeting was arranged in secret and has only just been made public, days before it transpires. Some in Taiwan speculate that the Taiwanese leader's decision to seek AIIB membership is an attempt to get increased approval ratings and influence the upcoming election in Taiwan.


Singapore to Host Historic China-Taiwan Meeting

Cooperation between Taiwan and China is being facilitated by the Singapore government and they are gong to have to tread lightly, as the two countries have been on bad terms for 70 years. Taiwan applied to become the newest member of the AIIB despite historic tensions with China and this will be the basis for the meeting this Saturday. 


Update 2: China applies to join EBRD, board likely to recommend approval

China has applied to join the European Bank of Reconstruction and Development (EBRD), thereby expanding financial and political ties between Asia and Europe. Joining the EBRD would augment the initiatives of China’s “One Belt, One Road” economic policy, as it aims to increase relations, trade ties, and influence between Asia and Europe. EBRD is owned by 64 countries, with G7 countries sitting on its board. Though the bank was originally created to spur development in previously communist nations of eastern Europe, it has since extended its influence to parts of North Africa, Asia, and the Mediterranean. EBRD is expected to recommend approval of the Chinese bid for membership, with final acceptance this December.
 

How UNDP is positioning itself in a growing donor environment 

Impacted by the emergence of new multilateral financial institutions, such as the Asian Infrastructure Investment Bank or the New Development Bank, this article argues that the United Nations Development Program (UNDP) will not be displaced within international frameworks. Santos posits that due to the massive infrastructural gap in Asia, UNDP is more likely to serve as an ‘integrator of knowledge and resources,’ and will thus facilitate much of the growth and developmental projects throughout the Asia-Pacific Region. Santos lastly posits that aside from the emergence of new multilateral institutions, governments should also consider the role that private entities, corporate foundations, and nonprofits might have upon international development.

 
World yuan-ization thanks to the City of London 

Budding relations between China and the UK will aid in the Chinese attempt to convert the yuan into a world currency. China has tried to globalize its economy through policies of ‘gradualism.’ Firstly developing Offshore Clearing Banks throughout the Asian region, China has also developed strategic and security-related tied to the UK, and added the UK as a member to its AIIB. Such steps augment China’s ability to globalize its currency, as at present, the UK is expected to vote in favor of incorporating the Chinese yuan in the Special Drawing Rights of the International Monetary Fund. If the IMF approves the Chinese bid, we might expect an increased demand for the currency of nearly $500 billion US dollars.

 
China’s Top Legislature Ratified AIIB deal 

China's legislature has ratified the agreements on the Asian Infrastructure Investment Bank, making the institution one step closer to its formal establishment. 54 of 57 prospective member countries have signed the articles of agreement, making AIIB expectant of its official opening in early 2016.

 
Donors to hear needs for funds 

In mid-November, multiple Asian nations are expected to participate in the Bangladesh Development Forum. The Bangladesh government is seeking development partners, and will present proposals for up to $30 billion worth of developmental projects. Representatives from the China-led Asian Infrastructure Investment Bank and Japan-led Asian Development Bank are expected to attend.

 
8th AIIB Chief Negotiators’ Meeting convened in Jakarta, Indonesia on November 3-4, 2015 

Chiefs of the bank recently discussed AIIB’s Proposed Budget and Business Plan, its environmental and social framework, and its preparations for establishing the bank. 54 of the bank’s 57 founding members have already signed on to its articles of agreement. AIIB expects to open in early 2016.

 
China Moves Forward with AIIB Bank 

This article reports on China’s recent ratification of the Asian Infrastructure Investment Bank. The agreement ratified is an outline of the financial share of each founding member, as well as rules for policymaking, governance structure, business, and operational systems. Furthermore, it’s reported that AIIB will promote sustainable development within the Asian economy and improve infrastructure connections for the region. China’s voting stake in AIIB is about 26&, the highest of all members. With each additional member, member shares and voting stakes will be gradually diluted.
 

President Jokowi Wish AIIB, Finance the Large-Scale Infrastructure Projects

President Jokowi of Indonesia reports that AIIB will invest in large-scale infrastructural projects throughout his country. Upon a recent visit to Indonesia, AIIB president, Jin Liqun met with the new Indonesian president to discuss potential partnerships. Projects are aimed at developing remote areas for the provision of electricity, transportation, drainage, urban infrastructure, roads, and railways. President Jokowi mentioned that in comparison to the Asian Development Bank, that AIIB appeared more geared towards procuring the ‘basic’ developmental needs. 
 

Indonesia-AIIB

AIIB will begin making loans to foreign nations in early January 2016. Indonesia’s Finance Minister reports that the bank will make loans to his nation for the purpose of developing energy and power plants. Indonesia is expected to invest nearly $670 million in AIIB over a span of five years, making it the bank’s eighth largest shareholder.
 

AIIB Will “Significantly” Bring Together Europe, Asia: Luxembourg Minister 

Luxembourg’s minister of foreign and European affairs, Jean Asselborn, expects that the AIIB will augment relations between Europe and Asia. In conjunction with initiatives such as the ‘New Silk Road,’ ASEAN Economic Community, and European Fund for Strategic Investments, AIIB will help to address infrastructure needs throughout both European and Asian regions.

The Asian Infrastructure Investment Bank

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​Increasing Chinese Influence in Central Asia has Shinzo Abe on the Move

Japanese Prime Minister, Shinzo Abe, recently visited six countries in Central Asia. Abe committed mass amounts of development funding in each country and hopes to invest in the economical potential that he see as mutually beneficial. China's increasing presence in the region, with the "One Belt, One Road" initiative and the AIIB, appear to be threatening Japan's influence in the region, which may have been an incentive for Abe's trip. 


Georgia Strives to be Europe's Hub for Trade with Asia

Georgia's Prime Minister, Irakli Garibashvili, publicly announced his support for rebuilding the Silk Road to its original glory in order to facilitate trade between Europe and Asia. With two thirds of the world's population in the Silk Road region, Georgia seeks cooperation from surrounding countries in order to boost the region's economies without conflict. Georgia proudly hosted the inaugural AIIB meeting and hopes to continue to be a major player in regional development activities. 


BRICS Bank and AIIB Interests and Members Overlap

Countries involved in the BRICS Bank have also signed on to work with the AIIB. Energy, transportation, and infrastructure are on the horizon for both development organizations in similar regions. 


AIIB Well-positioned for 2016 Start

New Development Bank Vice President, Vladimir Kazbekov, reported that the bank is expected to make its first loans beginning in April 2016. The bank has already received loan applications and aims to become operational in early 2016. China’s AIIB is also slated to launch at the same time; China is currently accelerating the approval processes for the bank.


Denmark's Positive Outlook on Joining the AIIB

Denmark has recently signed on to join the Asian Infrastructure Investment Bank. Denmark’s Foreign Minister Krisitan Jensen reports that his nation Denmark is ready to partake in the Chinese Silk Road Initiative, and that he hopes the two nations retain steady bilateral cooperation. The statement reports that Jensen would like to support China-EU relations.


That's a wrap for the AIIB this week. Check back with our blog next Monday for another weekly update.

Interested in other IPD updates? Check out our all-team IPD BLOG!