Separate AIIB, B& R goals complement each other
In the future, the AIIB will not only support construction projects along the route, but will also offer financial support for infrastructure construction on the regional and global level.
When it comes to the relationship the Asian Infrastructure Investment Bank ( AIIB) has with the Belt and Road ( B& R) initiative, many people are inclined to believe the AIIB is a subordinate body that serves the development of the B& R initiative, which in my opinion is not accurate. In fact, these two hold equal status and are complimentary to each other, which can be seen in several aspects.
The service scope of the AIIB is not just limited to countries and regions along the B& R route. With countries like the UK, Australia and Brazil joining the AIIB, the bank will do business not only in Asia, but in Europe, Oceania and South America.
With the rapid expansion of the AIIB, the bank has investment projects in more countries than those along the B& R route. In the future, the AIIB will not only support construction projects along the route, but will also offer financial support for infrastructure construction on the regional and global level.
In addition, the AIIB has a development orientation different from the Silk Road Fund ( SRF). As an open government fund for multilateral cooperation with China’s foreign exchange reserve as its primary source of initial capital, the SRF was established to facilitate connectivity construction proposed by the B& R initiative, which is designed to make investment in cross- border infra- structure projects along the B& R route. The SRF is funded by China, which will play a decisive role in the SRF’s future investments.
China has actively proposed and pushed forward the launch of the AIIB. Nevertheless, with the participation of many countries, the AIIB will set up branches in London, New York, Frankfurt and other international and regional financial hubs to expand overseas financing. Moreover, as the AIIB’s equity is allocated based on GDP volume of countries, China, the biggest shareholder of the bank, will adhere to the principle of achieving shared growth through discussion and collaboration, making sure China’s presence won’t shadow those of other countries within the bank.
It should also be pointed out that the focus of the AIIB and the B& R initiative are different. The AIIB will remain committed to regional development and will strive to forge a new multilateral development bank of the 21st century, which will not only promote the reform of the existing global economic governance system, but will also seek deepened collaboration with the World Bank, the Asian Development Bank and the European Bank for Reconstruction and Development, in an effort to complement the existing multilateral development banks, add dynamic to the existing multilateral systems and promote the common development of the multilateral institutions with its own advantages and features.
In this sense, the AIIB will grow into a professional, efficient and sustainable new- style multilateral development bank with advanced governance concept of the 21st century, thus becoming an infrastructure investment and financing platform featuring win- win results, professionalism and efficiency.
In the meantime, the Belt and Road initiative aims to form a loose but efficient economic community with relevant countries and regions through the connectivity of policy, capital, trade, infrastructure and civil support so as to establish cooperation with win- win outcomes. As such, the AIIB’s future mission and development direction demonstrate a different focus from the positioning of the B& R initiative, representing an equal relationship between the two.
In short, the establishment of the AIIB gives China a pivot in the world, while the B& R initiative is a lever on this pivot, helping China bridge the East and the West. Local governments, enterprises and the public should clearly recognize the differences and similarities between the AIIB and the B& R initiative so as to achieve better development by making good use of their positioning and advantages.