Washington has doubted how effective and collaborative the AIIB would be. These doubts can begin to be eased this week, as the AIIB is working with the Japanese led development bank, the ADB. The AIIB and the ADB are undertaking a joint loan, which could be the first of many efforts the AIIB will make to engage in international cooperation.
China's Improving Relations with Vietnam, Myanmar
Chinese Premier Li Keqiang committed 11.5 billion dollars to development projects in South East Asia and stated he would encourage the Silk Road Fund and the AIIB to also commit to funding development in the region. One of Li's goals is to increase the use of the yuan in Laos, Myanmar, Thailand, Cambodia, and Vietnam. This could be a step in improving the tense relationship between China and Vietnam and Myanmar.
The AIIB and EDB Collaborate to Connect Europe and China with Road
The AIIB is teaming up with the Eurasian Development Bank (EDB) to finance the construction of a motorway across Russia, linking China and Europe. This projects is expected to cost billions of dollars and involve Russian cooperation.
Growing Waitlist for AIIB Membership
President of the AIIB, Jin Liqun states that there are currently more than 30 countries waiting to join the Asian Infrastructure Investment Bank (AIIB), in addition to its 57 founding members. At the Boao Forum for Asia on the Chinese island province of Hainan, President Jin said that the bank is working to solve the member state waitlist issue by the end of the year. The bank chief also noted that it is possible for China's Hong Kong Special Administrative Region to become a member as a sub-sovereign government, based on the bank's articles of agreement.
The AIIB Looks to Extend Membership to Hong Kong
AIIB president Jin Liqun claimed that Hong Kong may join the Beijing-led Asian Infrastructure Investment Bank as a sub-sovereign member by the end of the year at the Boao Forum for Asia on Friday. Jin believes Hong Kong is an international financial center that has a huge role to play in facilitating financing the AIIB. Christopher Cheung Wah-fung, a lawmaker for the Hong Kong's financial services sector said lender status in the AIIB would upgrade the status of Hong Kong's financial sector in the international world. If the AIIB chooses to use the Hong Kong platform to issue bonds or other products to raise funds, it would attract more international firms to set up shop here while the city’s investment banks would also expand their businesses here.
AIIB President Once Again Welcomes and Encourages U.S. Participation
At a pannel at the Boao Forum for Asia on the southern island of Hainan, AIIB President Jin Liquin said the AIIB would welcome the US as a member. Even if the US does not become a member, there are already a number of seasoned professionals with American passports working at the AIIB. However, Jin did caution that competition against Chinese companies bidding for work on AIIB funded projects would be extremely high. In 2014, President Obama stated that the U.S. would not be opposed to participating with the AIIB. President Xi Jinping further welcomed U.S. involvement with the bank that same year.
The BRICS Bank Seeks to Work Closely with the AIIB
The BRICS-backed New Development Bank will soon issue between 3 billion yuan and 4 billion yuan in bonds in China. This sum comes from the five emerging economies behind the bank: Brazil, China, India, Russia and South Africa. The bonds will mostly be related to green energy and clean energy. Although the economies of these 5 nations are diverging, BRICS bank the vice-president, Leslie Maasdorp, said the bank had a “20-year horizon” and there is no pressure from shareholders to see immediate dividends. What sets the BRICS bank apart from the structure of the China-led Asian Infrastructure Investment Bank is that each of the five countries holds 20 percent of the voting rights. Massdorp claims BRICS will not compete with the AIIB because they have a different geographic focus, however, the two banks will still work together closely. The BRICS has important operational issues to address first and foremost before anything else. The bank is in talks with two international rating agencies and is undergoing rigorous due diligence to secure an international rating, however, this might be a hard story to tell as Brazil and Russia both have junk ratings and South Africa and China might be facing downgrades.
"Asia Development Bank open to joint lending with China-led AIIB" - Nikkei Asian Review
The President of the Asian Development Bank, Takehiko Nakao, indicated that the ADB would be open to jointly working with the AIIB. Nakao noted that the European Bank for Reconstruction & Development and the World Bank are interested in collaboration, as well. Nakao also noted that the ADB will works towards “increasing capitalization” and investments from emerging economies. Nakao lastly asserted that the ADB could specifically help increase the AIIB’s international connectivity and platforms of environmental protection.
"Chinese and Japanese development banks to offer joint loan" - Out-Law.com
Asian Development Bank President, Takehiko Nakao has confirmed that the ADB and AIIB will offer joint loans. Nakao also noted that the two banks will assure that the loans safeguard “environmental, labour, and anti-corruption” standards. The cooperation is considered positive, as some analysts assert that it will give AIIB credibility if loans cofinanced with ADB, an experienced multilateral bank. Others stress that the 2 banks will selectively cooperate, as the two banks pursue different objectives. For instance, some analysts note that the AIIB will focus on economic infrastructure, whereas the ADB focuses on projects concerning “social inclusion and environmental sustainability.” While Japan leads the ADB, the country is not a member of AIIB. Japanese Prime Minister, Shinzo Abe, has previously noted that the ADB will remain competitive by soon halving their lending time. This effectually ends the bank’s “practice of requiring government guarantees for each loan.” Similarly, Abe remarked that Japan plans to provide $110 billion to Asian infrastructure development over the next five years.
"S. Korea calls for strong leadership to boost growth in Asia" - Yonhap News Agency
South Korea Finance Minister, Yoo Il-hoo, has remarked that the Asian region needs “strong leadership to rejuvenate economic growth.” In statements issued Thursday, Yoo noted that Asia is at a “crossroads between growth and stagnation.” Yoo asserted that the AIIB is crucial in funding infrastructure for developing nations. Yoo emphasized that funding the Asian infrastructure gap is a significant stimulant for financial growth.
"China mulling designated name for Taiwan to join AIIB: official" - Taiwan News
Beijing and Taiwan are currently negotiating the title under which Taiwan might join the China-led AIIB. In order to proceed in negotiations, representatives of both countries assert that Taiwan must first enact a bill that would allow “stricter screenings of agreements with China.” Due to its opposition to Beijing, Taiwan often confronts difficulty joining international organizations like AIIB and World Bank. China, however, maintains that Taiwan is welcome to become a member country of the bank.
"Pushing back against Beijing’s colonisation of the sea" - The Nation, Rene L Pattiradjawane
Pattiradjawane reports on ASEAN member nations’ frustration with Chinese colonization of the South China Sea. Member countries assert that China’s actions defy international law and agreements, as it continues to construct artificial islands in Asian waters. Pattiradjawane explains that there are 2 main motives for Chinese expansion. First, expansion is likened to “maritime colonialism,” as it ignores regional cooperation in the sea-lanes. Second, China has used the islands in order to increase its “physical security,” as they would block external threats by sea. Furthermore, Pattiradjawane asserts that China projects its domination in the region through “a mix of military, political, and cultural forces.” Pattiradjawane cites the China-led AIIB as an example of China’s continual emergence into global world orders. Pattiradjawane concludes by advising that Southeast Asian countries pursue “concrete political gestures” in order to resolve maritime conflicts.
"China Hosts Regional Meeting, Announces $11.5 Billion Loan to Neighbors" - China Topic
Leaders from China, Thailand, Cambodia, Vietnam, Myanmar, and Laos met to discuss the first Lancang-Mekong Cooperation Meeting. During the meeting, China offered $11.5 billion in loans and $10 billion in credit for Southeast Asian countries to pursue “infrastructure and other projects.” Remarking on the meeting, the Chinese Premier asserted that he would “make efforts to persuade China’s AIIB and ‘Silk Road Fund’ to finance projects in the peninsular region.” Javed lastly noted that despite disputes over China’s territorial claims in the South China Sea, China has pledged friendships to nations Myanmar and Vietnam.
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