AIIB’s first president defends China as ‘responsible stakeholder’ in less multilateral world

But can the Asian Infrastructure Investment Bank – which boasts China as its largest shareholder, and is closely linked to Beijing’s effort to be seen as a “responsible stakeholder” – remain neutral in a more polarized international environment? Can multilateralism survive under the “America First” administration in Washington?

After decades of working in multilateral organizations – the World Bank, the Asian Development Bank, and now the Asian Infrastructure Investment Bank – Jin remains a fan of multilateralism and optimistic about the prospects for global governance.

“I find it very difficult to understand that you can go it alone,” says Jin. luck In an interview. “If one of those countries is going to work with China, and then China is going to have negotiations with that country on cross-border trade and investment and so on — how can they negotiate something without understanding the basics, without following generally accepted rules?”

“Pluralism is something that can never be escaped.”

Why did China establish the Asian Infrastructure Investment Bank?

Beijing established the Asian Infrastructure Investment Bank nearly a decade ago, on January 16, 2016. The bank grew in the wake of the global financial crisis, as Chinese officials considered how best to use the country’s growing foreign exchange reserves. Beijing has also been complaining about its perceived lack of influence in major global economic institutions, such as the International Monetary Fund and the World Bank, even though it has become one of the world’s most important economies.

With assets of $66 billion (according to its latest financial statements), the AIIB is smaller than its US-led counterparts, the World Bank (with assets of $411 billion) and the Asian Development Bank (with $130 billion). But the AIIB was designed to be the first bank in China to design its own institutions for global governance and establish its name as a leader in development finance.

Negotiations to create the bank began in earnest in 2014, with several Asian economies such as India and Indonesia choosing to join the new institution as members. Then in early 2015, the UK made the shock decision to join the Asian Infrastructure Investment Bank as well; Many other Western countries followed suit, such as France, Germany, Australia and Canada.

Two major economies stood out in abstaining from the vote. Under the then Obama administration, the United States chose not to join the Asian Infrastructure Investment Bank, due to concerns about its ability to meet “high standards” in governance and environmental safeguards. Japan, the United States’ closest security ally in East Asia, has also retreated due to concerns about human rights, environmental protection, and debt.

“They chose not to join, but we don’t mind.” says Jane. “We continue to maintain a very close working relationship with US financial institutions and regulators, as well as Japanese companies.” He believes that this relationship is evidence of the neutral and non-political nature of the Asian Infrastructure Investment Bank.

However, Beijing established the AIIB after years of pressure by US officials to become a “responsible stakeholder,” when then-US Secretary of State Robert Zoellick in 2005 defined countries that “realize that the international order supports their peaceful prosperity, so they work to support that order.”

Two decades later, US officials see China’s presence in global governance as a threat, and fear that Beijing will now try to distort international institutions to suit its own interests.

Jain ignores these criticisms. “I think China is now the second largest contributor to the United Nations, and one of the largest contributors to the World Bank and the Asian Development Bank,” Jin says. “However, China’s GDP per capita is still significantly lower than that of a number of countries. This, in my view, is an indication that it is taking charge.”

Now, with many countries withdrawing from global governance, Jin believes those lecturing China about taking responsibility are hypocrites. “When anyone says to another person: ‘You must be a responsible man’, you should ask yourself whether I myself am a responsible man. You cannot say: ‘You must be a good man’.” Do you think you’re a good guy yourself?” he says, laughing.

Why does China care about infrastructure?

Since its inception, Beijing has tried to differentiate the AIIB from the World Bank and the Asian Development Bank through its focus on infrastructure. Jin credits infrastructure investment with laying part of the foundation for China’s later economic boom.

“In 1980, China had no highways, no electrified railways, no modern airports, nothing in terms of so-called modern infrastructure,” Jin says. “However, by 1995, the Chinese economy began to take off. Since 1995, other sectors – manufacturing and processing – have mushroomed because of the basic infrastructure.”

However, Jin does not see the AIIB as a competitor to the World Bank and ADB, saying he is “deeply connected” to both banks due to his time at each. “These two institutions have been tremendous for Asian countries and many other countries around the world. But time is moving forward, and we need something new to deal with new challenges, implement projects more cost-effectively, and be more responsive.”

Jin is particularly keen to defend one particular institutional choice: the decision by the Asian Infrastructure Investment Bank to form a non-resident board, with directors not based at the bank’s Beijing headquarters. (At the time of the bank’s creation, commentators were concerned that a non-resident board would reduce transparency and limit the ability of board members to stay informed.)

“For management to be accountable, and for the board to have real authoritarian power to oversee and direct management, the board should be hands-off,” he says. “If the board makes policy decisions and approves specific projects, management will not bear any responsibility.”

This was a lesson she learned privately, says Jain. “The real owners, the members of the board of directors, realize that they should not interfere in the routine management of the enterprise, because only by doing so can they hold management accountable.”

“If the CEO is doing a good job, he can stay. If he’s not doing a good job, fire him.”

What does Jin Liqun plan to do next?

Jin Liqun was born in 1949, just a few months before the official founding of the People’s Republic of China. He was sent to the countryside during the Cultural Revolution, spending a decade first as a farmer, and eventually as a teacher. He returned to higher education in 1978, earning a master’s degree in English literature from Beijing Foreign Studies University.

From there, he worked his way through a host of Chinese and international financial institutions: the World Bank, the Asian Development Bank, the Chinese Ministry of Finance, the China International Capital Corporation, and eventually the China Investment Corporation, the country’s sovereign wealth fund.

In 2014, Jin was appointed responsible for the body created to establish the Asian Infrastructure Investment Bank. Then, in 2016, he was elected as the first-ever president of the Asian Infrastructure Investment Bank.

“Geopolitical tensions are like the wind or waves in the ocean. They will push you a little here and there,” Jin says. “But we have to navigate this difficult and turbulent situation in such a way that we do not deviate from our neutrality and apolitical nature.”

He admits that “the sea was never calm” during his decade in office. The election of US President Donald Trump in 2016 intensified the competition between the United States and China, as Washington now sees China’s participation in global governance as a threat to the power of the United States.

Other countries have also reconsidered their membership in the AIIB: Canada suspended its membership in 2023 after a former Canadian AIIB director raised allegations of Chinese Communist Party influence among the leadership. (The Asian Infrastructure Investment Bank described these accusations as “baseless and disappointing.”) China is also the largest shareholder in the AIIB, owning about 26% of voting shares; By comparison, the United States has about 16% of the voting shares in the World Bank.

However, several countries with tense relations with China, such as India and the Philippines, have maintained their relations with the AIIB. “We have been able to overcome many difficulties that arose from disagreements between some of our members, and we have been able to overcome some difficulties resulting from conflicts around the world,” he said.

“Employees of different nationalities did not become enemies because their governments were having problems with each other. We did not have that kind of problem at all.”