China is not now considering borrowing from its new global development bank to bankroll domestic projects, the state-run People’s Daily said on Friday. The AIIB was formally launched by Chinese President Xi Jinping at a special function on Saturday.
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The launch of the bank on Saturday in Beijing was attended by representatives from 57 member countries, including India, which will contribute $8 billion, only second to China’s $ 29.7 billion.
The United States and Japan are not members of the AIIB, which some see as a potential rival to the Western-led World Bank and International Monetary Fund.
The new bank’s board of governors elected Jin Liqun, a former executive at the Asian Development Bank and Chinese government official, as AIIB’s first president, for a five-year term. “The opening of the AIIB for business has great significance for the reform and improvement of the governance of the world economy”, Xi said at the opening event. It’s the first China-initiated multi-lateral financial institution.
Indonesia and other countries are already showing interest in borrowing from the AIIB, according to a source close to the bank.
The value of AIIB’s authorized capital amounts to $100 billion, with nearly $30 billion invested by China. The AIIB’s mandate will be to fund projects both inside and outside Asia: loans, participation in capital, bank guarantees, and technical assistance.
“We are confident that AIIB will not only complement the existing multilateral development banks, but it will also inject the dedicated additional resources for infrastructure development in the region”, the finance minister said as per a copy of his speech received today.
“China has no intention of stimulating exports via competitive devaluation of currencies”, the premier said at the meeting in Beijing, which marks China’s previously announced official entry into the bank.
China is the largest shareholder with 26.06% voting shares. Meanwhile, a press conference after the conclusion of the two-day inaugural meeting, the first president of the AIIB vowed that he will adhere to the “highest possible standard” in running the new multilateral financial institution.
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He said while some countries were initially skeptical about the AIIB’s role, yet Pakistan firmly believed from the very onset that the bank would play a complementary role and it was a matter of satisfaction for it that the institution was now a reality.
