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AIIB (Asian Infrastructure Investment Bank) news

AIIB: Financial pillar for Belt and Road

MOVING TO AGREE

The latest phase of the AIIB process is another key step moving forward.

Monday's signing ceremony of the Articles of Agreement of the AIIB in Beijing has outlined the framework and management structure for the institution. Following Australia, 50 of 57 AIIB prospective founding countries signed the document.

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AIIB underway
Being the largest shareholder in the AIIB does not mean China will seek veto power over major issues. Instead, China will closely cooperate with other members to balance all parties' interests.

China's stake and voting share in the AIIB are a "natural outcome" of current rules and may be diluted as more members join this endeavor. China is not deliberately seeking veto power, China's Vice Finance Minister Shi Yaobin told Xinhua News Agency.

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AIIB: Major capital contributions
TOWARDS WORLD SUPPORT
Vice President of the Swiss Confederation and Head of Federal Department of Economic Affairs Johann Schneider-Ammann; Deputy Prime Minister and Minister of Finance of New Zealand Bill English; and Deputy Prime Minister and Finance Minister of the Republic of Korea Choi Kyung-hwan spoke to Chinese President Xi Jinping after the signing ceremony on behalf of all representatives.

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Representatives from 57 member countries attend a signing ceremony of articles of agreement of the AIIB
They spoke highly of the AIIB as timely and important, adding that along with the China-proposed Belt and Road Initiative, the bank would help address regional infrastructure bottlenecks and capital constraints, and enhance regional trade connections and interconnectivity, according to Xinhua.

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AIIB: Financial pillar for Belt and Road
Whether the US and Japan will join the new-born bank remains to be seen.

Last April, US President Barack Obama said the country will not join the AIIB at present but America will be looking forward to collaborating with the new development bank, "Just like we do with the Asia Development Bank and with the World Bank."

However, Japan's attitude toward the AIIB is not as positive. Japanese Finance Minister Taro Aso said that “Japan has to maintain caution toward the AIIB” in last March before the application deadline for founding membership, according to Kyodo News.

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Prospective founding memvers of the AIIB
The Belt and Silk Road Initiative and the AIIB, both proposed by Xi, are connected closely with one another.

The Belt and Silk Road Initiative will mainly spend effort on promoting regional economic development and strengthening connectivity among countries bordering China's west. The AIIB will support infrastructure along the Belt, while also cooperating with existing global financial institutions.

According to an analysis from the People's Daily newspaper, the Belt and the AIIB complement each other. The Belt needs financial support from the AIIB. The Belt will thereby create reciprocal opportunities for the AIIB's development.

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Is the share mentioned above the final one?
 
Is the share mentioned above the final one?

The final one in the sense that it was agreed upon by all parties involved. But, as I read it, as the landscape changes in the future with additions or changes of economies of scale, the distribution might be readjusted.

When will the first loan be made?

I think the first duty in in line is for the member states to pass the agreement in their national bodies.

The Articles of Agreement will remain open until December 31, 2015.

"The AOA will enter into force when at least 10 signatories, with initial subscriptions in Schedule A that total not less than 50 % of total subscriptions, have deposited their instruments of ratification, acceptance or approval.

It is expected that the AOA will enter into force by the end of the calendar year 2015.
Once the AOA enters into force, the inaugural meeting of the Board of Governors will be convened.
At its inaugural meeting, the Board of Governors will, among other matters: elect the President; elect the Board of Directors; determine the date that the AIIB will commence operations; and make other arrangements as necessary to commence AIIB operations."
 
China unlikely to wield veto power in new Asian bank, Indonesian envoy says
Jakarta's ambassador says Beijing wary of brandishing de facto power to block decisions

PUBLISHED : Tuesday, 23 June, 2015, 1:24am
UPDATED : Tuesday, 23 June, 2015, 8:18am
Teddy Ng teddy.ng@scmp.com




Indonesian ambassador Soegeng Rahardjo says 75 per cent of the AIIB's voting rights will go to Asian members. Photo: Simon Song
China will hold the biggest share of voting rights in the Asian Infrastructure Investment Bank, or AIIB, but Beijing will be cautious before exercising any power of veto, according to Indonesia's envoy to Beijing.

Soegeng Rahardjo said the newly formed international development bank had been well set up to ensure voting rights were used positively, and he believed the power of veto was unlikely to be used.

"We should learn from the successes and failures of the International Monetary Fund and the World Bank. This is a good teacher for the AIIB to move forward," he said.

"What is more important, I think, is how we use the voting rights … rather than talking about how to divide the voting rights.

"Many countries will react negatively [if the power of veto is exercised easily]."

Indonesia would get about 3.1 per cent of the voting rights and Asian members 75 per cent in total based on the size of their economy and their contribution to the bank, Rahardjo said.

A quarter of the rights would go to members from outside Asia, and China would have de facto veto power because it would hold the biggest block of votes, Rahardjo added, without giving a precise figure.

"Other countries will have a significant say in the operation of the bank," Rahardjo said. "I don't think there will be the situation of the majority dominating the minority, or minority domination of the majority."

Rahardjo's remarks came after the AIIB's 57 founding members met in Singapore last month to discuss goals for running the bank.

The lender's founding charter is due to be signed in Beijing on Monday.

The AIIB was established under China's "One Belt, One Road" initiative, which is aimed at bolstering trade and infrastructure links in Asia and beyond.

Beijing has pledged to streamline the bank's governance and avoid what it claims are the inefficient practices of lenders dominated by the West.

The United States, in particular, has publicly expressed concern over how the AIIB will be run and how open and transparent its decisions will be.

Rahardjo said the bank should be governed not only by market principles and profit considerations, but also by the potential impact of the proposed projects on local residents and whether local governments provided political guarantees for the infrastructure.

Local construction companies should be allowed to take part in the projects through open bidding, and the schemes should benefit local communities, he added.

Indonesia plans to upgrade its sea ports, airports, highways and railways in the coming years, and is ready to submit proposals to the AIIB once it starts operations. "I think all infrastructure is related to connectivity. It is important for the AIIB to participate in our infrastructure projects," he said.

Indonesian President Joko Widodo has suggested that a regional office of the bank could be set up in Jakarta, serving the Association of Southeast Asian Nations.

"It is logical that the AIIB has a representative office in Jakarta. This is the role that Indonesia would like to play, especially in subregional financing arrangements," Rahardjo said.

This article appeared in the South China Morning Post print edition as China unlikely to wield AIIB veto: Indonesian envoy

China unlikely to wield veto power in new Asian bank, Indonesian envoy says | South China Morning Post
 
Looks like the AIIB has just found itself a peer.

BRICS Bank to Approve First Infrastructure Projects in April 2016
09.07.2015

MOSCOW (Sputnik) — The BRICS New Development Bank (NDB) will approve its first infrastructure projects in April 2016, the head of the bank told Sputnik on Thursday.

In July 2014, BRICS members — Brazil, Russia, India, China and South Africa — signed an agreement to create the NDB, a mutual development bank set to finance infrastructure and sustainable development projects in BRICS and other developing countries.

"We are looking forward to approving our first projects in April," President designate of the BRICS New Development Bank Kundapur Vaman Kamath said.

"We have talked to the BRICS governments to put together projects which we can look at in the next six months, so that we have them ready for approval in April next year," he said, adding that all the projects will be on the infrastructure area as the bank's initial idea supposes.

BRICS member states regard the NDB as an alternative to existing global financial institutions, such as the International Monetary Fund and the World Bank.

At the moment, the seventh BRICS summit is being held in the Russian city of Ufa on July 8-10, with participants discussing the issues of mutual cooperation, including on the NDB.



Read more: BRICS Bank to Approve First Infrastructure Projects in April 2016 / Sputnik International
 
Looks like the AIIB has just found itself a peer.

BRICS Bank to Approve First Infrastructure Projects in April 2016
09.07.2015

MOSCOW (Sputnik) — The BRICS New Development Bank (NDB) will approve its first infrastructure projects in April 2016, the head of the bank told Sputnik on Thursday.

In July 2014, BRICS members — Brazil, Russia, India, China and South Africa — signed an agreement to create the NDB, a mutual development bank set to finance infrastructure and sustainable development projects in BRICS and other developing countries.

"We are looking forward to approving our first projects in April," President designate of the BRICS New Development Bank Kundapur Vaman Kamath said.

"We have talked to the BRICS governments to put together projects which we can look at in the next six months, so that we have them ready for approval in April next year," he said, adding that all the projects will be on the infrastructure area as the bank's initial idea supposes.

BRICS member states regard the NDB as an alternative to existing global financial institutions, such as the International Monetary Fund and the World Bank.

At the moment, the seventh BRICS summit is being held in the Russian city of Ufa on July 8-10, with participants discussing the issues of mutual cooperation, including on the NDB.



Read more: BRICS Bank to Approve First Infrastructure Projects in April 2016 / Sputnik International

Brilliant news we need a lot of funding to rebuild pur nation
The final one in the sense that it was agreed upon by all parties involved. But, as I read it, as the landscape changes in the future with additions or changes of economies of scale, the distribution might be readjusted.



I think the first duty in in line is for the member states to pass the agreement in their national bodies.

The Articles of Agreement will remain open until December 31, 2015.

"The AOA will enter into force when at least 10 signatories, with initial subscriptions in Schedule A that total not less than 50 % of total subscriptions, have deposited their instruments of ratification, acceptance or approval.

It is expected that the AOA will enter into force by the end of the calendar year 2015.
Once the AOA enters into force, the inaugural meeting of the Board of Governors will be convened.
At its inaugural meeting, the Board of Governors will, among other matters: elect the President; elect the Board of Directors; determine the date that the AIIB will commence operations; and make other arrangements as necessary to commence AIIB operations."

The current ratio will stay for a long time unless Japan joins
 
Brilliant news we need a lot of funding to rebuild pur nation


The current ratio will stay for a long time unless Japan joins

Japan may be allowed to join in,say,5 years,by which time China's nominal GDP could be 4 times Japan’s and India's will be on par with Japan's。Japan's joining won't lead to a big dilution of holdings in the Bank by the other major members。

I for one couldn't care less if Japan joins or not。:D
 
Japan may be allowed to join in,say,5 years,by which time China's nominal GDP could be 4 times Japan’s and India's will be on par with Japan's。Japan's joining won't lead to a big dilution of holdings in the Bank by the other major members。

I for one couldn't care less if Japan joins or not。:D


Interesting
 
Canada Will Join China-Led AIIB If Its Companies Can Benefit, Says Finance Minister
By Kalyan Kumar on July 13 2015 5:14 PM

Canada's decision on joining the Chinese-led Asian Infrastructure Investment Bank will be taken on merit and it will be judged by the opportunity and scope for Canadian companies in competing for projects coming up with the bank’s funding. This was stated by Canadian Finance Minister Joe Oliver. It may be recalled that Canada had said in April that it is considering the proposal to join the AIIB, despite reservations by the U.S. and Japan.

However, Canada was conspicuous by its absence among the 50 nations who signed the articles of agreement in early July, for conceiving the bank. The signing ceremony in Beijing was attended by the representatives from 50 countries, while seven more nations, including Philippines and Thailand are negotiating the matter.

Exploring Opportunities

The Canadian minister said, “Our government is monitoring the developments to determine, among other things, the opportunity for Canadian companies to compete for infrastructure projects.” Speaking at the Canada-China financial conference in Toronto, Oliver noted that any decision will be based on Canada's national interests. He said more than a trillion dollars, or several trillions of AIIB project investments would come up. So, the share of Canadian companies will not be too large to be meaningful. Calling for a level playing field, Oliver said, “We want to make sure that the rules provide a realistic and fair opportunity for our companies to compete. We're not asking for any guarantees.”

Seeking Global Clout

China’s Asian Infrastructure Investment Bank has already found support from 50 nations. In AIIB, China, India and Russia are the biggest shareholders, which began with $50 billion as capital investment. It is projected to grow to $100 billion soon. Canada’s stand assumes significance as the U.S and Japan wield much of the power in the World Bank and Asian Development Bank and they are not investing in AIIB. But Canada is not against AIIB.

For the U.S, the main objection to AIIB is the fear that it will undercut the existing institutions such as World Bank and might lead to lax lending standards. But much to the chagrin of the U.S, bulk of the West and Southeast Asia ignored the U.S. objections and signed up, which include Australia, Britain, Germany and South Korea.

China is hoping that AIIB will help it to leverage its weight on the international stage, commensurate with its economic importance and is hoping that the new bank will grow to the stature of the Asian Development Bank and World Bank. The AIIB envisages offering loans to member countries for building ports, roads and cities throughout Asia and China's engineering firms also expect taking up such work on a priority basis for expanding their global expertise. China's minister of finance, Lou Jiwei described the AIIB as a "win-win for Asia" and claimed that the bank would start operating toward the end of 2015. Among the biggest shareholders in the bank, India is at second place, with Russia and Germany at third and fourth positions respectively.
 
AIIB: The first international financial institution of the 21st century
July 20, 2015

In 1945, a group of 43 nations led by the United States, then the world’s dominant economic power, created the International Bank for Reconstruction and Development (now part of the World Bank Group) and the International Monetary Fund – the “Bretton Woods institutions” – to promote reconstruction after World War II.

There were a number of goals. First, given the experience of the interwar period, there was a perceived need to coordinate exchange rate policy and both control and cushion the impact of cross-border capital flows. Second, there was a desire to provide technical assistance to governments lacking expertise in promoting growth and development. And finally, in places where domestic financing, private or public, was insufficient, there was a need for the resources for public infrastructure projects.

Today, infrastructure funding remains insufficient, and nations still experience sudden stops of private funding that official lending can temporarily cushion. But the global economy has evolved much faster than the operations of either the Bretton Woods institutions or some of their regional siblings like the Asian Development Bank (ADB), the African Development Bank (AfDB), the Inter-American Development Bank (IDB), and the European Bank for Reconstruction and Development (EBRD).

What happens when official international financial institutions (IFIs) fail to respond to a changing environment? The same thing that happens to firms that stop innovating. New, more competitive institutions (firms) arise that compel them to change or – like dinosaurs – become extinct.

We may be witnessing this process of creative destruction right now. Last month, a group of 57 founding nations led by China signed the articles of agreement to establish the Asian Infrastructure Investment Bank (AIIB) with an initial subscribed capital of $100 billion. While most of the G20 nations, including the big European states, Australia, and South Korea, are among the founding members, the United States, Japan, and Canada are noticeably not.

No one disputes the need for more official infrastructure funding: the World Bank projects infrastructure spending needs over the next 20 years in east and south Asia at about $500 billion per year(see figure 0.4 here). The ADB’s estimate is even higher, putting Asian infrastructure investment needs at $8 trillion in the current decade (2010 to 2020). Yet, all types of loans on the balance sheets of the ADB and the World Bank (which includes lending outside of Asia) together total only a bit over $200 billion (see here and here).

What we find the most interesting is that the AIIB founders didn’t ask member countries to approve an expansion of either the World Bank or the ADB. Instead, they opted for a new organization altogether.

Why? The problem is institutional legitimacy arising from issues of power and governance. Frustrated with the failure of the IMF and World Bank to modernize, the AIIB’s 57 founders moved to start from scratch in an attempt to do better. Critical changes include the mechanism for distributing capital shares and voting rights; the role of the organization’s board; the focus on a single critical task; and the imposition from the start of oversight mechanisms to ensure compliance with rules that limit political interference and corruption.

In effect, the AIIB, which could begin operations this year, aims to establish principles for best practice for IFI’s in the 21st century. If it meets that high standard, the traditional IFIs will either have to change or, like many firms that fail to adapt, their importance will diminish over time.

The most glaring problem with the 20th century IFI’s – the BIS, IMF, World Bank and the regional development banks – is representation. Compare, for example, the relationship between the share of IMF quotas allocated to a country (a rough proxy for that country’s voting power) and its share of global GDP. The bars in the following chart show the gap between these two measures. For example, in 2014, China’s IMF quota was nearly 4% of the total, while it accounted for closer to 16% of global GDP (measured at PPP), a gap of 12 percentage points. Other large emerging economies also show sizable negative gaps – some of which have widened significantly since 1990. By contrast, Japan, the United States and the countries of Europe show growing overrepresentation. This all reflects the failure of the United States and Europe to implement a reallocation of quotas and voting rights commensurate with economic growth.

Gap between IMF quota share and global GDP share (measured in percentage points)

Note: GDP is measured as current international U.S. dollars (adjusted for purchasing power parity). Data for 2014 show the gap between 2014 quota shares and 2013 GDP shares. Sources: IMF and World Bank.

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Note: GDP is measured as current international U.S. dollars (adjusted for purchasing power parity). Data for 2014 show the gap between 2014 quota shares and 2013 GDP shares. Sources: IMF and World Bank.



You might wonder if the chart overstates the misrepresentation in the Bretton Woods organizations. If anything, the opposite is true. Since 1945, European members have always selected the IMF’s leader (known as the “Managing Director”), the United States has always selected both the leader of the World Bank (known as the “President”) and the deputy at the IMF, while Japan has always designated the head of the ADB. Other elements of IFI governance are skewed similarly. For example, despite an adjustment in recent years, advanced economies in Europe remain overrepresented on the IMF Board. (The current quota for the EU as a whole is roughly 30% of the total, twice its share of global GDP.) And, while most countries elect directors in a competition for shared slots on the Board, the United States, Japan, Germany, France, and Britain each appoint their own Board members.

Perhaps most important are the veto rights. In the case of the IMF, both the United States and (collectively) the large European members have sufficient voting shares to veto constitutional changes. As a result, the U.S. Congress’s continued failure to approve a 2010 IMF reform is the only remaining roadblock to a modest reallocation of voting shares and a shift to an all-elected IMF Board (see here for the policy options facing Congress). Finally, none of these organizations have agreed on or created a formula for future changes that would automatically reallocate voting shares as global GDP shares evolve, without triggering repeated constitutional debates.

Instead, the Bretton Woods institutions are becoming aging political fiefdoms, ruled by governments whose economies are diminishing in global importance. No wonder China – which remains the largest contributor to global economic growth – has led the charge for reform by doing an end-run around the existing IFIs.

Is the AIIB likely to do better? There are reasons to be hopeful. First, three-fourths of the voting shares will be allocated to Asia-Pacific members, boosting the representation of emerging and developing economies. Second, the Bank’s broad membership and its constitutional pledges bode well for implementing high standards for transparency. To highlight the founders’ desire for good governance, and notwithstanding U.S. absence from the organization, the AIIB has appointed a top U.S. and ex-World Bank lawyer as the Chief Counsel for the Secretariat that is preparing for the start of AIIB operations. Third, while China initially will have sufficient votes to veto constitutional changes, Chinese authorities argue that its voting rights will be diluted as others join. Fourth, unlike the Bretton Woods institutions, the AIIB’s Board will be nonresident. In an age when Board members can travel easily, a nonresident Board is less costly and avoids the sort of intrusion into daily management that comes from having an executive board in the building (as there is at the IMF). Finally, the AIIB’s focus on infrastructure lending and its stated willingness to cooperate with existing IFIs should allow more efficient specialization. Not every IFI needs a large staff (the World Bank has staff of more than 12,000).

Of course, the proof will be in the pudding. When the AIIB begins operations, observers will be watching closely whether these ideals are realized. Will AIIB loans be free of political interference and bid-rigging? Will it avoid favoring providers from nations like China that have large quotas and voting rights? Will AIIB leadership and employment be based solely on merit, rather than on nationality? Will it be able and willing to recruit top-flight staff? Will the AIIB cooperate where possible with the World Bank and the ADB to avoid duplication of effort or outright conflict? Will the rules of the game promote transparency and continued self-reform? And, as the relative economic importance of the countries changes, will voting rights adjust?

As economists, we like competition. If the AIIB meets the high standards its leaders espouse, it will heighten the pressure on the existing IFIs’ political masters to change with the times. In addition, in light of numerous potential areas of conflict between China and the United States (think cyberspace and the South China Sea for starters), wouldn’t we all benefit from having these two leading economies and governments instead focus their competitive energies on improving global infrastructure finance?

From this perspective, we see a powerful argument for the United States to do two things. First, the U.S. Congress should belatedly approve the IMF’s 2010 Quota and Governance Reforms to signal its support for continued global economic and financial cooperation in coming decades. And second, after failing to stop the AIIB, and refusing to participate as a founding member, the United States should join the institution as soon as it can, participating actively in holding it to the highest 21st century standards.
 

Interview: AIIB agreement meets high standards, implementation to be " real test": expert

WASHINGTON, July 22 (Xinhua) -- The Agreement of the Asian Infrastructure Investment Bank (AIIB) meets international high standards, but faces a key test of implementation as the China-initiated institution aims to start operation at the end of the year, a U.S. expert said.


"AIIB's Articles of Agreement is very similar to that of the World Bank," David Dollar, senior fellow with the Brookings Institution and former official of the World Bank and the U.S. Treasury Department, told Xinhua in an interview, referring to the 60-article agreement that outlined the governance structure and policy-making mechanism of the new multilateral institution.

"I think it's quite impressive that China pulled together this initiative and got nearly 60 countries to sign up, putting together these professional and international-standard articles of agreement," Dollar said, who also works as an unpaid consultant to the AIIB.

According to the articles, the bank will have an authorized capital of 100 billion U.S. dollars, with 29.78 billion dollars provided by China, as the bank's largest shareholder holding a 30.34 percent stake and 26.06 percent of voting shares.

As the bank goes from theory to reality, "the real test is going to be implementation," Dollar said, noting that implementation is often very slow in the World Bank and "the clients complain about this."

"So I know the challenge for Mr. Jin Liqun is... can this bank be more efficient, can it operate quickly and still meet high environmental standards?" Dollar said.

China has formally nominated Jin, secretary-general of the interim multilateral secretariat for establishing the AIIB, as candidate for the first president of the bank.

Jin has spent the past few months shuttling between countries to convince them to join the bank and has earned a reputation for his flexible approach.

"I had opportunities to interact with him for a long time, so I have very high regard for his abilities," Dollar said, noting that Jin had represented China in the World Bank while serving as vice president of the Asian Development Bank, a senior official of China's sovereign fund and the country's vice finance minister.

"He has lots of experience with development banks. So I think he is the excellent choice to head the bank," Dollar said.

The bank is expected to start operation at the end of the year under two preconditions: at least 10 prospective members sign the agreement and the initial subscribed capital is no less than 50 percent of the authorized capital.

Dollar believed money will not become a problem for the bank's operation as it's well capitalized.

Interview: AIIB agreement meets high standards, implementation to be " real test": expert
- Xinhua | English.news.cn
 
TPP Versus AIIB: Obama’s Uphill Battle
By Wall Street Daily | Jul 23, 2015 11:44AM GMT

It was a party that the United States urged 57 countries not to attend… But they did.

These countries included close European allies of the United Sates, such as Germany and the United Kingdom, and Asian comrades like Australia and South Korea. Not to mention members of the Middle East, including Israel and the Saudis. The party in question was held in Beijing for the late-June signing of the Articles of Agreement, putting in place the framework for the China-led Asian Infrastructure Investment Bank (AIIB).

Instead of joining the AIIB, the Obama Administration offered up another option to 11 countries in Asia: the Trans-Pacific Partnership (TPP). This “next generation” trade agreement has one glaring omission, though: China – the region’s most important trading nation.

Of course, that’s only fair since China didn’t invite the United States to its version of the TPP – the Regional Comprehensive Economic Partnership (RCEP). This trade initiative links 16 nations in Asia. But that transgression isn’t the most important part of this tiff.

The real sticking point is that the TPP isn’t popular among our Asian friends. Allies, such as Australia and Japan, say the TPP intrudes too much into their internal affairs. That’s a valid point. The TPP requires more than tariff reductions. It gets into other areas, including intellectual property rights, data protection rules, corporate governance, labor and environmental standards, and financial regulations.

The perception in many parts of Asia is that the TPP will result in net costs to the region’s economies, while only benefiting the United States. A high hurdle indeed for a “partnership.”

China’s Approach

This is when the differences between the Chinese and American approaches to global economics and geopolitics become very stark.

China doesn’t bother with other countries’ internal processes. Its leadership realizes that, in today’s world, there’s one main obstacle to increase trade between nations: poor transportation, power, water, and communications infrastructure, which fouls up global supply chains.

This is the same conclusion reached in a 2013 study by the World Economic Forum. In fact, the study found that removal of these supply chain barriers could increase the world’s GDP by up to six times!

Somehow the Obama Administration missed the memo on that. But the Chinese did not.

China has the $50-billion AIIB, the $40-billion Silk Road Fund, and the $100-billion New Development Bank. The latter was founded in cooperation with India, Russia, Brazil, and South Africa.

And there are the individual Chinese development banks, too – the China Development Bank, which has $100 billion in capital, and the Export Import Bank of China. These banks already give more loans to Asia and Latin America than U.S.-dominated institutions like the World Bank, the Asian Development Bank, and the Inter-American Development Bank.

Of course, this isn't completely altruistic. China is hoping that a good chunk of the infrastructure work will be done by Chinese companies, as the country faces a serious excess capacity problem in heavy equipment manufacturing and construction.


21st Century “Marshall Plan”

Still, funds dedicated to infrastructure are sorely needed in the developing world. According to some estimates, the U.S.-led development banks fall short by $175 billion annually in aid for the poverty-stricken.

And the infrastructure needs are much more massive. The Asian Development Bank itself estimates that Asia faces an infrastructure funding shortfall of about $8 trillion for 2010 to 2020. McKinsey & Co. estimates the global infrastructure investment requirement through 2030 to be $57 billion and $67 billion.

And that’s exactly where China is focusing the AIIB and its other efforts – on infrastructure.

Meanwhile, the global perception is that the Obama Administration is more concerned on imposing its vision of what’s “right” on other nations, instead of actually getting the help where it’s needed. For example, the Administration believes any infrastructure project should pass the strictest environmental standards before proceeding.

Tell that to the people without power and roads. That type of environmental permitting may take a decade or more. Just ask any U.S. company involved in an infrastructure project.

And with the involvement of Europe and developed Asian countries in the AIIB, it’s likely that environmental standards won’t be ignored.

President Obama seems to be left at the station after the train has left, and the United States’ global influence is sure to diminish.

Meanwhile, China is proceeding full steam ahead with its version of a 21st century Marshall Plan, making friends around the world as it goes.

And the chase continues,

by Tim Maverick
 
China doesn’t bother with other countries’ internal processes. Its leadership realizes that, in today’s world, there’s one main obstacle to increase trade between nations: poor transportation, power, water, and communications infrastructure, which fouls up global supply chains.

This is the same conclusion reached in a 2013 study by the World Economic Forum. In fact, the study found that removal of these supply chain barriers could increase the world’s GDP by up to six times!

Very good point. That's the whole idea behind the One-Belt One-Road project. In the final analysis, all from AIIB to NDB comes down to this grand project, China's version of Marshall Plan for 21st century.

The US seems to have stuck in 20th century, which is not surprising because hegemonies are always reactionary and resistant to change.
 
Former Chinese finance minister named head of Asian Infrastructure Investment Bank
Tuesday 25 August 2015 07.35

Former Chinese vice finance minister Jin Liqun has been elected to head the new Asian Infrastructure Investment Bank (AIIB), the Chinese government has said.

Jin was elected as the bank's "incoming president" at a two-day meeting of chief negotiators in the Georgian capital of Tbilisi, according to a statement by China's finance ministry.

Beijing last month had named Jin as its preferred candidate to head the new institution.

The AIIB has been viewed by some as a rival to the World Bank and Asian Development Bank. The United States and Japan - the world's largest and third-largest economies, respectively - have notably declined to join.

Jin has previously worked for both institutions. He was also formerly a top official at the China Investment Corporation, the country's sovereign wealth fund.

He has a master's degree in English literature, speaks fluent English and reportedly good French and was a Hubert Humphrey Fellow in economics at Boston University in 1987-88.

Jin's selection had been widely expected as Beijing will initially have a 26.06% share of the votes at the bank, giving it veto power over the choice of the president, which requires a 75% majority.

Beijing will be by far the largest AIIB shareholder at about 30%, according to the legal framework signed by 50 founding member countries in late June.

Source: AFP

-----------------------------------------------------

Jin chosen as official candidate for AIIB president
English.news.cn 2015-08-24 21:33:47

TBILISI, Aug. 24 (Xinhua) -- The 6th Chief Negotiators' Meeting on establishing the Asian Infrastructure Investment Bank (AIIB) agreed on Monday to name Jin Liqun, a former Chinese official, as the official candidate for the bank's president.

The chief negotiators from 54 of the 57 founding members of the AIIB (with Sri Lanka, Switzerland and Amman absent) unanimously agreed to choose Jin for the post in Tbilisi, capital of Georgia.

According to the AIIB's charter, Jin needs to be re-confirmed by the Board of Governors at its inaugural meeting after the formal establishment of the AIIB.

Jin, nominated by China for the post of AIIB president in early July, has an outstanding leadership record in the public and private sectors, and multilateral development institutions.

He once served as China's vice finance minister, vice president of the Asian Development Bank, chairman of the Supervisory Board of China Investment Corp., and board chairman of China International Capital Corp., Ltd.
 

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