China-backed AIIB ‘on track to meet 2016 lending targets’

PUBLISHED : Saturday, 05 November, 2016, 8:02am
UPDATED : Saturday, 05 November, 2016, 8:02am

The China-backed Asian Infrastructure Investment Bank (AIIB) is “on track” to meet its big first-year targets, including lending US$1.2 billion by the end of 2016, bank president Jin Liqun said on Friday.

After bringing many US allies on board and a high-profile launch in January, the multilateral lender moved onto the business of raising funds, gaining expertise, and recruiting experienced executives.

The bank, part of Beijing’s push to expand its regional clout, has lent US$829 million to six projects in Pakistan, Tajikistan, Indonesia and Bangladesh.

China unveiled plans for the AIIB in 2013 in a move seen as a challenge to the dominance of the World Bank and the Asian Development Bank.

AIIB and World Bank reach deal on joint projects, as China-led lender prepares to approve US$1.2 billion of funds this year

The AIIB was set up to help meet the massive demand for infrastructure in Asia and as a key part of China’s “One Belt, One Road” strategy, an attempt to revive the ancient maritime and silk trade routes.

Jin, who used to work at the Ministry of Finance, has repeatedly said the bank will be lean and clean, and will not “set up a separate kitchen” to overthrow the existing system of multilateral institutions.

At a forum organised by Peking University on Friday, Jin dispensed with his usual attempt to allay suspicions about the lender, saying instead that the AIIB would contribute to globalisation.

China and some emerging economies in Asia are testament to economic development through infrastructure investment
AIIB president Jin Liqun

He said the pace of globalisation and regional integration had slowed and lower growth had fuelled protectionism but the AIIB would promote regional connectivity and seek “inclusive” growth by including “marginalised” countries within an Asian-style approach.

“It is universally acknowledged that infrastructure investment is an important means to realise growth,” Jin said.

“China and some emerging economies in Asia are testament to economic development through infrastructure investment. Since opening up, China has lifted 800 million people out of poverty, largely a result of economic and social development via infrastructure investment.”

The AIIB enlisted 57 members, including Britain and Germany, as its founding parties. In August, Canada officially applied for membership, a move deemed as “a vote of confidence” in the bank, Jin said.

Canada to apply to join China-led AIIB, leaving Japan as sole US ally to remain non-member

The AIIB has launched two batches of funding projects in Asia – in energy and transport – since June.

Jin said the bank “anticipates increasing demand” on cross-border infrastructure projects such as railways and ports, with green infrastructure “at the heart” of development. Jin said the bank also aimed to link up with private capital next year by recruiting top executives in the area.