AIIB gives China global leadership experience
China was the initiator of the Asian Infrastructure Investment Bank (AIIB) and it has played a leading role in its progress. The AIIB’s headquarters is in China, and its first president Jin Liqun is Chinese.
More importantly, China’s shareholding in the AIIB is about 30 percent and its voting power is more than 26 percent.
Is China trying to become a new financial hegemon? Is it necessary to build the AIIB into a tool of China’s diplomatic strategy? These issues have aroused heated debate in the international community. Objectively, how should we view China’s leading role in the AIIB?
China did not deliberately pursue dominance and leadership within the AIIB. There were 57 founding members of the AIIB from around the world, and in just over two years, the number of members reached 84. As the sponsoring country and most important member state, China has consistently adhered to a democratic, open and tolerant attitude and welcomed all interested countries to apply for membership.
Following the principles of multilateralism, the AIIB has unique characteristics such as the distribution of equity and voting rights, operational management, decision-making mechanisms, governance and business focus.
The status and influence that China enjoys in the AIIB reflects its economic strength as well as its willingness to support the common development of Asia and the world. It is also a recognition of member countries to the contribution and leading coordinating role of China in the development of the Asian region.
China took the initiative to subscribe for a stake of nearly $30 billion, which is a form of taking responsibility for global development and providing more public goods for the international community. It is China’s huge contribution that ensures the smooth operation of the AIIB.
As the largest developing country in the world, China still has many impoverished people, but China decided not to borrow from the AIIB at the initial stage of its operation. Out of the current total of around $4.3 billion invested in 25 projects approved by the AIIB, China has only one: a $250 million air quality improvement project in Beijing.
China’s position in the AIIB is essentially different from that of other major countries in some other multilateral lenders. For instance, it is different from the veto rights of the US in the IMF and the World Bank and the dominance enjoyed by the US and Japan in the Asian Development Bank.
China’s high share in the AIIB and its high voting power is temporary. Quotas will be adjusted with more members’ participation, but it is not necessary for China to give up its role.
More countries within and outside Asia are changing their attitudes about joining the AIIB because of its performance. Under the bank’s charter, as new members join, China’s share will gradually be diluted. If Japan and the US join AIIB, this dilution will be more pronounced. China’s attitude has been nothing but welcoming, and the AIIB has made provisions for these countries to join. The performance of the AIIB over two years has fully demonstrated China’s considerable progress in advancing multilateral diplomacy. China, as the sponsor and host country of the AIIB, has promoted a series of groundbreaking foreign policy practices, and this should be acknowledged. The AIIB’s outstanding performance is the best embodiment of the diplomatic concepts and practical innovations promoted by China in recent years. For China, its value far exceeds the pure economic benefits and the dominance of a multilateral financial institution. China’s leading role in the AIIB has significance for China’s diplomacy in achieving new development and breakthroughs, and it shows that the nation’s diplomacy will be more proactive, flexible and mature. Multilateral diplomacy has increasingly become an important stage for China’s diplomacy. However, China is still a newcomer in this field. There is still a large gap between the flexible and mature multilateral diplomacy of traditional major powers and China, which has little experience of initiating and running an international multilateral development finance institution. The experience gained in the AIIB has offered China an opportunity to learn to play a leading role and create new rules through multilateral diplomacy.
The performance of the AIIB over two years has fully demonstrated China’s considerable progress in advancing multilateral diplomacy.