More than 30 countries have applied to join the Asian Infrastructure Investment Bank (AIIB), but the US is not among them.
At a meeting in China’s Hainan Province, the Chairman of the China-backed multilateral said that new applicants are likely to be admitted this year, but appeared to open the door to US and Japanese collaboration, even if neither state becomes a full member.
“Even if you decide not to join, that does not mean we cannot work together,” said Jin Liqun, adding: “I strongly believe AIIB should not be a new hotspot for the frictions between China and the United States. It is actually just the contrary. AIIB should be a new platform for China, the United States, Japan and many other countries to work together.”
There are currently 57 member states of the AIIB, including US allies such as the UK, Germany and Australia. If 30 more countries join, then it will dwarf the Asian Development Bank (ADB) in terms of membership. Currently, the ADB has 67 members, 48 of which are Asian. The US and Japan are the largest stakeholders in the World Bank-affiliated development bank, holding more than 30% of shares between them.
The US was left red-faced last year when its close allies signed on to the AIIB, despite the personal intervention of Treasury Secretary Jack Lew. Many have speculated that the AIIB is set to compete with the ADB, but tones from both camps have been conciliatory.
We believe Hong Kong has a role to play in facilitating the financing of the AIIB. Jin Liqun, AIIB
Last week, ADB chairman Takehiko Nakao confirmed that both organisations were working towards a joint loan, the details of which were not disclosed in an interview with the Financial Times. The AIIB is also taking advice from the ADB on labour, environmental and anti-corruption procedures in its lending programme, Nakao revealed.
Jin also opened the door for Hong Kong’s involvement in the AIIB, saying: “Hong Kong is an international financial centre. We believe Hong Kong has a role to play in facilitating the financing of the AIIB. For instance, the AIIB can issue bonds in Hong Kong and can also have currency swaps with Hong Kong.”
Experts in the Special Administrative Region of China have long been touting Hong Kong as the clearing and financial hub for both the AIIB and the financial work for One Belt One Road projects.
The AIIB is yet to make its first loans, however it is expected to do so this year. Indonesia is known to have been an early applicant for finance, as it is seeking to develop its infrastructure.
Furthermore, the CEO of the Anaklia Development Consortium, which is developing a large port facility in Georgia, Levan Akhvlediani, recently told GTR that his organisation is in talks with the AIIB about potential funding.
“In September 2015, representatives of the ADC met with the president of the AIIB, Mr Jin Liqun, and exchanged details of the project. We will be approaching the AIIB for potential debt financing shortly for our project,” he said.