BRICS New Development Bank hopes to expand by drawing other nations as members
Market demand is big enough for old and new players, says bank’s vice president Zhu Xian
The New Development Bank, an infrastructure-focused lender initially set up to serve the five BRICS nations, is expected to add new members as early as next year, its vice president said on Thursday in Shanghai.
“It is very likely that we will see new members joining us in 2017 or 2018,” said Zhu Xian, vice president and chief operating officer of the bank, on the sidelines of a NDB seminar.
He noted that new members were unlikely to be added this year, as it takes time to go through due procedures and discussions with interested countries.
The NDB’s board of governors, who gathered in Shanghai for the bank’s first annual meeting that ended on Thursday, agreed that it was time for the bank to welcome new members for its future development, Zhu said.
Expanding the membership from the five founding members – Brazil, Russia, India, China and South Africa – has been ticked as a key task for the bank to become a truly global player.
The Shanghai-based policy bank reflects Beijing’s will to spread its global influence amid the rise of emerging economies.
The bank began operating a year ago, with initial capital of US$50 billion contributed equally by the five members. The bank hopes to showcase its accomplishments with five investment projects worth a total of US$911 million and 3 billion yuan (HK$3.5 billion) green bonds issuance in Shanghai within one year of operation.
At the seminar, Zhu tried to play down the rivalry between the bank and established global institutes such as the World Bank, noting that the market was big enough for old and new players.
He also said the bank would balance opportunity and risk when identifying investment projects.
Each member country is hosting one of the bank’s five investment projects.
Zhou Qiangwu, director of the international economics and finance institute at the Ministry of Finance, said expanding the bank’s membership was crucial to its long-term development by helping boost the bank’s international rating and business growth.
Zhou added that he hopes the bank would be open to developed and developing countries.
He also cautioned the bank about liquidity risk, or the mismatch of issueing short-term bonds replenish capital on the one hand and extending long-term credit on the other.
Niu Ximing, chairman of the Bank of Communications said his bank was open to cooperate with the NDB on various fronts, including liquidity support.