China Daily Global Edition (USA)
Confidence in the air
Head of AIIB says bank is just starting to win the world over
For Jin Liqun, president of the Asian Infrastructure Investment Bank (AIIB), skepticism must be forgiven because there is no way to cure it.
Jin said he referenced a quote from Jane Austen, who said in her novel MansfieldPark that, “Selfishness must always be forgiven you know, because there is no hope of a cure.”
The banker was referring to his frustration when some audience members approached him after his recent talk, saying they finally understood that AIIB is not a Chinese bank.
“My goodness, after I talked so much and reached out so much, still some people think it’s China’s bank,” he said at a talk at the Atlantic Council in Washington on April 24.
Questions about AIIB abound in the US, especially since former president Barack Obama’s administration, unlike the nation’s European allies, took a disapproving attitude toward the new multilateral institution.
Jin has been asked multiple questions such as “What do you really want?” or “What is China up to?”
He said it reminds him of a scene in Bernardo Bertolucci’s movie TheLastEmperor, when the tutor Reginald Johnston said the emperor wants glasses but was met with distrust because no one believed the emperor would need glasses.
“Spectacles, just spectacles,” Jin quoted Johnston as saying.
With his impeccable English and frequent citing of English and American literature, Jin stands out among most Chinese officials.
“So don’t imagine things; we just want to set up a bank,” he said, adding that it is to deal with the shortfall of infrastructure investment in Asia and other countries.
To Jin, the reason to focus on infrastructure is self-evident. China has borrowed from the World Bank, Asian Development Bank and international capital market since the 1980s to invest heavily in infrastructure. The Chinese economy started to take off.
“Given this experience, China believes that to promote broadbased economic and social development through investment in infrastructure and other productive sectors is really important,” he said.
However, Jin said he and his people never publicly debated and countered those skeptics who asked why he wanted AIIB when there are well-established, multilateral financial institutions such as the World Bank and ADB.
He was asked why he wouldn’t put money in the existing banks to cut costs and whether AIIB is to cut corners, compete with the existing institutions and disrupt the existing international financial order.
“We stayed very calm,” Jin said of his team’s not fighting back in previous years.
The AIIB opened for business on Jan 16, 2016, but it was formed on Dec 25, 2015, after its Articles of Agreement entered into force.
Jin said that when he came here almost three years ago, during the initial stage of preparing for the AIIB, he kept telling people that “we are much keen on working with the United States to create this new bank”.
“When China and the US work together, wonderful things would happen,” Jin said.
He said he was figuratively inviting people to the kitchen to make the cake together, to participate in the whole process and know every ingredient.
Eventually “a beautiful cake” was made by 57 members, Jin said, referring to the 37 regional and 20 non-regional Prospective Founding Members, all of which signed the Articles of Agreement that form the legal basis for the bank.
The new institution also made loans of $1.73 billion in its inaugural year.
In December, AIIB approved $600 million for the construction of a natural gas pipeline from Azerbaijan through Turkey. It was co-financed with the World Bank Group and some other commercial entities.
The multilateral development bank now has 70 members, and Jin expected that number to likely hit 85 by the end of 2017.
He said he understood the worries of some countries, including the US, Japan and some European nations.
“We are very much serene about all these critical comments because we know what we are doing is a right course of action,” he said.
But he thought it was not a good idea to argue with the critics in those days. “Because I believe credibility has to be earned. Credibility has to be earned through not what you are talking about, but what you do by your performance,” he said.
“It’s not possible for you to talk people into believing you, no matter how eloquent you are.”
He said that if the AIIB does well, people will believe in it and work with it.
When major US allies, such as the UK, Germany, France and Italy, all joined the AIIB despite US opposition, it was a vote of confidence for the bank.
“Eight months into operation, Canada and some other countries decided to join, which in my view is a vote of confidence,” Jin said confidently.
Jin believes one year is still too soon, saying the AIIB will continue to try to do a good job.
US President Donald Trump’s administration has not criticized the AIIB like the previous administration, but its prospects of joining the bank are still unknown.
Jin said his position to the US is clear. “Regardless of the membership of the United States, we work together,” he said, adding that he was speaking as president of the bank, not simply as a Chinese national.
“As a Chinese national, I would say that AIIB should not be yet another hot spot for possible conflicts between the United States and China. It should be a platform for cooperation between these two countries,” said the 67-year-old.
Jin revealed that he has already engaged US financial institutions, manufacturers, law firms and consulting firms to work together.
“I have Americans working in my institution,” he said, pointing to a young man sitting in the front row.
Oliver Barren, a US citizen, is now an executive officer at AIIB and participated in all the decision-making processes. Meanwhile, Natalie Lichtenstein, another US citizen, was the chief legal counsel who drafted the AIIB’s Articles of Agreement.
Jin believes the AIIB has two good features that other established multilateral financial institutions can’t claim.
One is universal recruitment. While those existing institutions hire only nationals whose countries are members, the AIIB recruit across the world.
“We don’t look at your passport, we look at your track record, professional and technical integrity,” he said.
The second is universal procurement. While the US and Japan are the only G7 countries that have not joined the AIIB, Jin said US and Japanese companies can compete for contracts through competitive bidding.
“We treat you fairly, equally and equitably,” he said.
The AIIB has five vice-presidents, including three Europeans and two Asians despite the fact that Asian countries have 75 percent of the voting power. Jin called it “meritocracy”.
On March 1, the AIIB voluntarily adopted the list under an anticorruption agreement known as the Agreement for Mutual Enforcement of Debarment Decisions.
It means that close to 1,000 entities that have been debarred by five other leading multilateral development banks also are debarred by the AIIB.
“It’s truly a multilateral international institution by the highest possible standards,” Jin said.
Jin, who repeatedly emphasized the core values of the AIIB as “lean, clean and green”, said people should not just look at the revenue side of the AIIB because the developing institution is not maximizing its profits but rather working in the interest of the borrowing countries.
He said the AIIB is also learning from existing institutions. Only 25 percent of the programs were prepared by the AIIB while 75 percent were co-financed with other institutions such as the World Bank and ADB.
“As we move forward, we would continue to work together. There is no cutthroat competition among all these institutions. We only enjoy cooperation,” he said.
Just a day before Jin’s speech at the Atlantic Council, the AIIB and the World Bank signed their second memorandum of understanding to strengthen cooperation, including development financing, staff exchanges and analytical and sector work.
Despite his busy schedule as a banker, Jin said he sleeps well. He sticks to his love for liberal arts before going to bed every night, flipping over some pages of literature or philosophy.
He said it makes his life more interesting. “We should be good by being a whole person — be humane, sympathetic, understanding,” he said, referring to his late-night reading.
We are very much serene about all these critical comments because we know what we are doing is a right course of action.” Jin Liqun, AIIB president