AIIB opening - a beacon of hope
- By Tim Collard
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E-mail China.org.cn, January 15, 2016
One concern which was raised in certain quarters when China first came up with the AIIB blueprint was the possibility that there may be too many development banks in the field, leading to unproductive rivalry and/or duplication of effort. This might, of course, have been the case without any coordination; but the AIIB project team have worked closely with other development banks to ensure that this should not be a real problem - after all, there is enough that needs doing in the field of global infrastructure! It makes sense that banks should cooperate on the larger and more adventurous projects, so that risk can be shared responsibly.
Only a few days ago Asian Development Bank President Takehiko Nakao welcomed the forthcoming AIIB opening, saying that ADB-AIIB cooperation could produce a series of win-win situations. During 2015 Nakao met AIIB President-designate Jin Liqun to compare notes and align objectives; both banks have very similar guiding principles, prioritizing infrastructure with a close eye to social and environmental concerns.
China is of course providing the majority of the new bank's core funding - the authorized capital will be, as expected, US$100bn, with initial subscribed capital of $50bn. Bonds will be issued to the value of $100m-$500m in the first year. This of course represents a heavy initial burden on China during a period of global economic uncertainty; but actually there is a solid synergy between China's global development and her national economic needs. There is a good deal of surplus capacity in China's construction sector, which can be usefully employed on the infrastructural initiatives promoted by the AIIB in the context of the "Belt and Road" initiative. It is also obvious that improvements in the economy and infrastructure of China's less developed neighbours will be of benefit to China's trading potential in the medium to long term.
It is thus clear that the AIIB is an initiative whose time has come, and that China has ensured that no time has been wasted in bringing it into active operation. The commitment shown by the top Chinese leadership augurs well for the stability of the project; and the global economy in 2016 needs all the stable pillars it can get. China has achieved astonishing economic progress over the last forty years; and those who feared that China's rapid emergence might have a destabilizing effect will hopefully be reassured by the fact that the economic clout of China is being directed towards projects which will not only raise people in the developing world out of poverty, but which will also further security by furthering practical trans-national cooperation.
The writer is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/timcollard.htm
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