China-led AIIB sets up unit to oversee ‘integrity’

China has committed to hold the AIIB to high standards of governance and transparency.

Chinese President Xi Jinping has outlined a broad plan called “One Belt, One Road” to deepen trade relations with neighbouring countries and open new markets, with the AIIB a key component of that strategy.

In a closed-door meeting with Jin Liqun, president of the AIIB, Korean Finance Minister Yoo Il-ho made a request for support for the nomination of a Korean vice president, the Finance Ministry said in a press release on Sunday.

China on Saturday officially launched the Asian Infrastructure Investment Bank (AIIB) which is seen as an emerging rival to powerful Western-led financial institutions such as the World Bank, the Asian Development Bank and the International Monetary Fund.

The Beijing-based AIIB is a new multilateral financial institution created to provide financial support for infrastructure development and regional connectivity in Asia. “It will serve to channel more resources, particularly private investment, into infrastructures projects”, Xi said.

The new bank’s board of governors elected Jin Liqun, a former executive at the Asian Development Bank and Chinese government official, as AIIB’s first president, for a five-year term.

Statistics from the Asian Development Bank (ADB) show that between 2010 and 2020, around eight trillion USA dollars in investment will be needed in the Asia-Pacific region to improve infrastructure. Germany, the bank’s biggest shareholder among non-Asian countries, also is expected to seek opportunities in the construction and renewal projects the bank is expected to finance.

Jin has said the AIIB expects to bring its first investment project for approval around this summer and expressed hope of co-financing and working closely with other multilateral development banks.

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. “We have taken care if anything falls into areas where more than one country has claims, it should not be done without both countries agreeing”, he said.

China is the largest stakeholder with 26.06 per cent voting shares. The bank is aligned with the UAE leadership’s vision to promote worldwide collaboration and ensure the efficient distribution and use of development aid.

Mr. Jin has served as AIIB’s President-designate since September 1, 2015. It is working closely with other global lenders such as the World Bank and the ADB, he said.