How China successfully redrew the global financial map with AIIB

From worries that it would not raise enough funds to concerns other nations would not support it, Beijing was plagued by self-doubt when it first considered setting up the Asian Infrastructure Investment Bank (AIIB) in early 2013, two sources with knowledge of internal discussions said.

However, promises by some Middle East governments to stump up cash and the support of key European nations – to Beijing’s surprise and despite US opposition – proved a turning point in China’s plans to alter the global financial architecture.

The overseas affirmation, combined with the endorsement of stalwart supporters, including a former Chinese vice-premier and incoming AIIB president Jin Liqun – a former head of the sovereign wealth fund China Investment Corp – enabled China to bring the bank from an idea to its imminent inception.

The bank’s successful establishment is likely to bolster Beijing’s confidence that it can play a leading role in supranational financial institutions, despite the economic headwinds it is facing at home.

The AIIB, to which 57 nations have signed up to join, is poised to rival the World Bank and the Asian Development Bank (ADB) and will amplify China’s influence on global development finance.

However, long-time rival Taiwan was left off the list of founding members despite expressing a desire to join.

Only the AIIB would give China the global stage to properly wield its financial influence, one of the sources said.“The AIIB will allow China to get a hundred positive replies each time it makes a call,” he said.

However, that changed when President Xi Jinping took office in the spring of 2013 and threw his weight behind China’s bold “One Belt, One Road” infrastructure and export strategy.

‘One Belt, One Road’ is a development strategy launched by after Xi called for a revival of the 2,000-year-old land-based Silk Road and a maritime silk route.

The New Silk Road economic belt will link China with Europe through central and western Asia, and the 21st-century maritime Silk Road, will build roads, railways, ports, airports and railways across Central and South Asia to link China with Southeast Asian countries, Africa and Europe.

The final list of 57 founding members of the AIIB

Australia
Austria
Azerbaijan
Bangladesh
Brazil
Brunei
Cambodia
China
Denmark
Egypt
Finland
France
Georgia
Germany

Full article: How China successfully redrew the global financial map with AIIB (South China Morning Post)

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