Suggestions on Building an Asian Infrastructure Investment and Financing Institution Led by China

Abstract

The Political Report to the 18th National Congress of the CPC called for pushing forward connectivity between China and its neighboring countries.

This article, authored by Zheng Xinli in July 2013, is a proposal to found the Asian Infrastructure Investment Bank (AIIB). Zeng Peiyan, chairman of the China Center for International Economic Exchanges, sent the proposal to President Xi Jinping and Premier Li Keqiang, which was highly endorsed by the two leaders. In October 2013, during a meeting with Indonesian President Susilo Bambang Yudhoyono in Jakarta, President Xi announced China’s initiative to found the AIIB. The main purpose of the AIIB is to assist countries in the Asia-Pacific with infrastructure development and promote connectivity and economic integration in the region. On October 24, 2014, the finance ministers and representatives of the first group of the 21 Prospective Founding Members, including China, India and Singapore, signed an agreement in Beijing to found the AIIB. On June 29, 2015, representatives of the 57 Prospective Founding Members of the AIIB attended a ceremony to sign the Bank’s Articles of Agreement in Beijing. With a total capital stock subscription of US$29.7804 billion and 26.06% of the voting shares, China is currently the AIIB member with the largest number of shares and votes. The establishment of the AIIB is a crucial step in the internationalization of the RMB. It will alter China’s position in the world economy, and it represents both an important achievement in raising China’s international standing and a practical step in reforming the global governance system. Some commentators have classed the AIIB’s establishment as China’s most intelligent move yet. Renowned economist Joseph Eugene Stiglitz also commented positively on the move, stating his belief that 2015 would be the first year of the Chinese financial era.