UpdateChina to hold 30 per cent stake in AIIB and 26 per cent voting rights
Delegates from 57 countries gathered in Beijing to witness the signing of the articles of agreement of the Asian Infrastructure Investment Bank
China will hold a 30.34 per cent stake in the Asian Infrastructure Investment Bank, the Finance Ministry said on Monday, making Beijing the largest shareholder in an institution that will project the country’s growing economic power.
China will also have 26.06 per cent of the voting rights in the lender, a Chinese-led development bank that will rival institutions such as the World Bank and the Asian Development Bank.
Countries defined as "within the region" will hold a 75 per cent stake in the bank, the ministry said in a statement on its website, as delegates from 57 countries gathered in Beijing to witness the signing of the articles of agreement for the lender.
President Xi Jinping said the signing ceremony was a step of historic significance when he met with the delegates in Beijing’s Great Hall of the People.
Xi, who proposed the AIIB’s establishment in October 2013, said he was pleased that the members have topped 50 and they have been able to seal the articles in a relatively short period of time.
View full list here (Source: Asian Infrastructure Investment Bank)
The preparation for setting up the AIIB would be smooth going as long as the members all follow “the spirit of solidarity, openness, inclusion and cooperation", he said.
Fifty countries signed the agreement, the finance ministry said, as the remaining seven - Denmark, Kuwait, Malaysia, Philippines, Holland and South Africa and Thailand - had not yet won domestic approval to formally join.
China's Finance Minister Lou Jiwei said the countries can sign the articles by the end of the year.
“This is an important initiative proposed by China to uphold more international responsibilities for the economic development of Asia and the world at large,” Lou said at the signing ceremony.
“Let’s work together to build the AIIB into a new type of professional and highly efficient multilateral development bank in the 21st century and multilateral cooperation platform,” he said.
India will have the second-largest share in the bank, followed by Russia, Germany and South Korea based on their capital subscriptions, according to the finance ministry statement.
The ministry added that the initial stakes and voting rights of China and other founding members would be gradually diluted as other members joined.
Australia was the first country to sign the articles of agreement at the Great Hall of the People in Beijing on Monday, which outline each members share and the bank's initial capital.
Finance Minister Lou said at the ceremony that he was confident the institution could start functioning before the end of the year.
The instituion was initially opposed by the United States, but has attracted many prominent US allies including Britain, Germany, Australia and South Korea. Other founding members include most Asian nations and countries from the Middle East and South America.
Japan and the United States are the most prominent nations not represented in the bank. China has said it has left the door open for them to join.
China will effectively have veto power as approval by at least 75 per cent of voting rights will be necessary for important issues, such as changes to its capital base and the board of directors. The institution’s first president is also expected to come from China. The president’s term of office is five years and the head may be re-elected once, according to the articles.
The AIIB will be headquartered in Beijing and its board of directors, composed of nine representing Asian members and three standing for nonregional members, will be nonresident, the articles said, adding that the working language of the investment bank will be English.
Apart from backing the AIIB, China has also pledged billions of dollars to the Silk Road fund and the “One Belt, One Road” initiative, which are also aimed at funding infrastructure to increase trade and connectivity between Europe and Asia.
Reuters, Agence France-Presse
