India and the Belt and Road
India is currently the largest borrower of the AIIB, even though the country has yet to participate in China's Belt and Road Initiative. Over the last two years, the AIIB has granted a total of 4.3 billion USD in loans to India. India is concerned that China will use the BRI to expand its power over nations neighboring India, thus they have refused to support the initiative. Dhruva Jaishankar, a research fellow at Brookings India, said that India finds a clear distinction between the AIIB and the Belt and Road initiative. The AIIB is composed of a board of directors and voting rights, while the BRI is a Chinese vision. Some people believe India will eventually come to accept the BRI and the only thing China needs to do is to be patient.
India is trying to avoid dependence on China, with the creation of "Made in India". There are several circumstances that make India's economic independence unrealistic, including the fact that India's trade deficit with China is growing every year. Although India has always regarded China as a competitor, India is actually the biggest beneficiary of AIIB. Read more here.
The Asian Infrastructure Investment Bank
Acciona and Swicorp started construction on three photovoltaic energy plants in Egypt after financing was secured with the Asian Infrastructure Investment Bank and the International Finance Corporation, and the World Bank. The investments involved total around 180 million USD. The plants will be able to power a reported 150,000 homes and will be a key part of the Benban photovoltaic complex, which incorporates nearly 40 facilities and has a total production capacity of nearly 1800 MW. The solar potential could offset 297,000 metric tons of CO2 emission per year.
Further, the AIIB, along with the European-Arab Bank and other financial institutions will provide funding for three solar parks with a combined capacity of 116 MWp. The park will be operated by an Italian company in partnership with Egyptian Electricity Transmission Company. Read more here.
Chile to join?
Officials from the Chilean Government met with representative from the Asian Infrastructure Investment Bank to review income statistics. If the Chilean legislature approves finalizing entry into the entity, it would make Chile the first South American nation to join the AIIB. Chile seeks to increase foreign investment to boost its own economy.
Asian Development Bank updates
Supporting Small and Medium-Sized Enterprises
ADB is allocating another 100 million USD to its Supply Chain Finance Program (SCFP), to support small and medium-sized enterprises (SMEs) in Asia and the Pacific. The SCFP is dedicated to assessing SME risk by focusing on history of performance, longevity, and nature of relationships within a supply chain to make up for the lack of confidence. By supporting SMEs, ADB hopes to bolster the sector's contribution to the region's economic growth and development.
Anti-Corruption and Counter-Terrorism Financing
ADB's Office of Anticorruption and Integrity (OAI) reports that the ADB is increasing support for anti-money laundering and counter terrorism financing (AML/CFT) efforts in the Asia-Pacific. ADB's AML/CTF funding includes a 2 million USD technical assistance grant approved in December 2016. The report details training, commissions, and other services offered to countries in the region, such as the Philippines, Mongolia, Bhutan, and Papua New Guinea, under the grant.
The ADB is loaning 260 million USD to Pakistan to improve the country's power transmission network. The funds will support the Second Power Transmission Enhancement Investment Program to better coverage, reliability, transparency, and quality of power transmission. The program will also provide more power to the national grid to enhance Pakistan's energy security and to establish a foundation for an energy trading platform. According to the Pakistani government, funds will be distributed to improve electricity networks in the Sindh and Balochistan provinces after the signing in Islamabad. Read more here.
The ADB is loaning 130 million USD to Mongolia to address public health issues concerning poor air quality in the capital of Ulaanbaatar. The city has a heavy reliance on raw coal burning for heating purposes. The loan will support a framework for air pollution regulation in certain sectors, such as transportation and domestic heating. It will also guide future spending on air pollution reduction and human health protection, and will support a long-term plan for cleaner fuel and green development.
Earlier this month, Japanese political columnist Taro Yayama criticized the AIIB's Maldives and Hambantota port (Sri Lanka) projects. He compared the Chinese-led development bank's efforts to British colonialism in the 19th century as well as to the operations of organized crime syndicates. Later in the article, Yayama claimed that Chinese efforts such as Belt and Road, and military expansion could threaten an economic recession.
Although Japan has traditionally been wary of growing Chinese economic influence, the country has recently expressed a greater interest in participating with China through the Belt and Road Initiative. Despite prevailing tensions between the countries, Japan plans on hosting Chinese Premier Li Keqiang to discuss bilateral relations and Japan's role in Asian development. In particular, Japanese firms have been exploring possibilities in the energy, environment and industrial sectors, but have also expressed concern about the current lack of framework or transparency in the Belt and Road Initiative. In the future, the Japanese government will be weighing its options of whether or not to pursue closer economic ties to Beijing, and assess the potential risks and rewards of such cooperation. Read more here.
Chinese collaboration around the world
Cameroon bilateral relations
Chinese President Xi Jinping and Cameroonian President Paul Biya met together in Beijing to discuss advancing bilateral ties between China and Cameroon. The African country has long been close to China, and has sought assistance from Beijing as it continues its process of industrialization of development. President Xi urged President Biya to integrate Cameroon into the Belt and Road Initiative in order to promote Chinese investment in sectors like agriculture, energy, transportation, housing and new technology. During this meeting, China and Cameroon also agreed to several bilateral agreements on economic and technological cooperation, human resources development, infrastructure construction, and industrial cooperation.
The Lao Cement Public Company, a joint venture between China Yunnan International Economic and Technical Cooperation Co., Ltd. and Lao Agro-industrial Development Co., Ltd. became the first cement company to be listed in Laos. The company will promote industrial integration to better serve Belt and Road construction, and infrastructure construction in Laos. The listing of the company also opened up a new financing model for the Belt and Road.
Panama joint investments
Panama president Juan Carlos Varela met with Zhou Xiaochuan, Governor of the People's Bank of China. The two discussed increasing joint investment strategies. They also highlighted the Bank of China's nearly 30-year involvement and the establishment of a headquarters for the Industrial and Commercial Bank of China in Panama to promote rhetoric of Chinese confidence of the Panamanian financial system. This comes as recent agreements set forth an agenda of multiple co-operational opportunities between the Republic of Panama and China Development Bank and Export-Import Bank.
Export-Import Bank pledges funds to China
The Export-Import Bank of China has agreed to pledge upwards of 100 Billion USD in an effort to drive new growth in China. The bank plans to strategically invest in growing industries such as the tech and automotive industries, and are intended to drive major projects and build platforms for new innovation.