China-led multilateral lender Asian Infrastructure Investment Bank (AIIB) said on Tuesday it would prioritise policy, transparency and creditworthiness when deciding on deals.
Jin Liqun, the bank’s president, was keen to play down its role in Chinese economic diplomacy amid the trade war between Beijing and Washington. He was addressing a forum on business environment organised as part of the China International Import Expo (CIIE), which runs in Shanghai from November 5 to 10.
“We want to make sure that our investment is safe and sustainable,” he said. “Credibility has to be earned through what you do, not what you say.”
“It is important to reiterate the bank’s role as a driver for the global and regional economies at the CIIE, given the event’s high profile,” said Li Lifan, an international affairs professor at the Shanghai Academy of Social Sciences. “The AIIB still has a long way to go, as it invests more in infrastructure projects.”
AIIB hit a milestone in July after its membership reached 100 countries, Benin, Djibouti and Rwanda being the latest to join the multilateral lender.
But the bank has taken just a small step forward in its quest to reshape the global economic order. “The bank is at its initial stage, and focuses on only regions such as Southeast Asia,” said Li. “It will be a long and convoluted road for it to become a game changer in the global finance sector.”
The absence of the United States as a member has helped China consolidate its control over the lender.
“China will obviously have a bigger say and more power in global economic affairs [if the AIIB can flex its financial muscle],” said Bob Zhou, chief executive of financial services company Yinshu Capital. “AIIB obviously used the CIIE as an opportunity to promote itself as a new global institution that can bring benefit to the world economy.”
By the end of 2018, the infrastructure-focused bank had extended US$7.5 billion in loans for 35 projects in 13 countries. It had a stated capital base of US$100 billion.
The bank was established as part of Beijing’s push to create a new global economic order, as China’s financial might rose after three decades of breakneck growth. Its goals are similar to another project’s, the Belt and Road Initiative, which was introduced by President Xi Jinping in 2013 to bolster China’s trade ties with 65 countries.
There had been mounting worries that Beijing would recklessly splash cash on infrastructure projects around the globe to increase its influence over the global economy.
The bank, along with the New Development Bank, another infrastructure-focused lender established by the BRICS nations, and Silk Road Infrastructure Fund, reflect China’s rising profile in the regional and global economies.
More from South China Morning Post:
- AIIB chairman urges private sector not to worry over sovereign risks in Belt and Road investments
- China says AIIB will have better understanding of developing world’s needs than other international development banks