China launches AIIB bank despite opposition from United States

With plans to resume the Colombo Port City Development Project, and increasing pressure on Sri Lanka’s foreign reserves, ties between Colombo and Beijing are back on track after an year’s review of Chinese-funded projects in Sri Lanka.

I would like to pay tribute to the leadership and vision of President Xi.

New Zealand was the first OECD member to join negotiations to establish the Bank, a fact recognised during the Secretary’s meetings with Vice Minister Shi Yaobin and the inaugural President of the Bank, Jin Liqun.

Answering a question about the bank’s oversight mechanism, the he described the AIIB’s core values as “lean, clean and green”, and stressed the importance of putting in place “a good system and corporate culture”.

Nakao, meanwhile, congratulated the founding members of AIIB, including the Philippines, and the staff of the Multilateral Secretariat who have been preparing the establishment of the new institution.

Launching the bank, Chinese President Xi Jinping said it would “effectively boost investment for infrastructure in Asia, channel more resources, particularly private investment for infrastructure projects, and promote regional connectivity and economic integration”.

“Asia’s financing needs for basic infrastructure are absolutely enormous”, President Xi said, adding that the bank is going to invest in high-quality, low-priced projects.

China said the AIIB would work with other multinational lenders on Asian infrastructure projects, and both the World Bank and the ADB issued statements Saturday saying they would cooperate with the AIIB.

Finance Minister ArunJaitley is the designated governor of the AIIB from India.

The United States and Japan are not members of the AIIB, which some see as a potential rival to the Western-led World Bank and International Monetary Fund. It targets to finance the construction of infrastructure projects, ranging from airports, mobile phone towers, railways and roads in Asia.

With a 30 percent stake in the bank, which is expected to have $100 billion (92 billion euros) in authorized capital, China is AIIB’s largest shareholder.

The AIIB is expected to invest US$10 billion to US$15 billion this year and will make its loan facility available in the second quarter of 2016.

In his address at the founding conference of the AIIB council on Saturday afternoon, Chinese Premier Li Keqiang said the operation of the new multinational development bank is “of positive and constructive significance for the global economic governance reform”.