Money Matters | Asia Infrastructure Investment Bank is not just about politics, it is about business too

To Beijing, the proposed Asia Infrastructure Investment Bank (AIIB) is not just about politics, it is about business too.

The bank, with the right kind of governance, is expected to reduce China's political and financial losses in its aggressive quest for influence, markets and natural resources through investment. And so far, the losses have been significant.

The controversy over the US$1.4 billion Colombo Port City project undertaken by state-owned China Communication Construction is the most telling. The project was to be the jewel in the crown of the billions of dollars of Chinese investment in Sri Lanka that Beijing sees as a key piece of its Maritime Silk Route linking China with Europe.

Six months into its inauguration by President Xi Jinping, the newly elected Sri Lanka administration ordered its suspension, alleging corruption behind the way it was fast-tracked.

The setback in Sri Lanka follows Mexico's cancellation in November last year of a US$4.4 billion high-speed railway contract to a Chinese consortium over "doubts about legitimacy and transparency".

That cancellation came shortly before it came to light that the Mexican president's wife had acquired a lavish mansion from a contractor in the consortium. China pledged to rebid but Mexico declared an indefinite shelving of the project in February.