Jin Liqun, president of AIIB, speaks to reporters at a press conference in Beijing in 2016.
Fred Dufour/AFP via Getty Images
hide caption
pick a caption
Fred Dufour/AFP via Getty Images
Jin Liqun, president of AIIB, speaks to reporters at a press conference in Beijing in 2016.
Fred Dufour/AFP via Getty Images
How has the rising geopolitical tension between the United States and China affected the Chinese-led Asian Infrastructure Investment Bank (AIIB)? Its president, Jin Liqun, says they have no influence.
“Regardless of the bilateral issues, which seem to bother them [between] these two great countries, AIIB has maintained close, very good cooperation with American government institutions, financial institutions and individual businesses,” Jin told NPR’s Steve Inskeep on Morning Edition.
He says the bank has strong relationships with Wall Street companies as well as with the US Treasury Department.
Contentious issues—from Taiwan, to Chinese spy balloons, to trade—have put the two countries on a collision course in recent years. Other financial groups have raised concerns about the growing duopoly between Beijing and Washington.
“Investment funds are particularly sensitive to geopolitical tensions and tend to reduce cross-border allocations, particularly to countries with differing foreign policy perspectives,” according to a recent report by the Fund. International Monetary Fund (IMF).In another report, the IMF says, the ongoing tension between the two largest economies in the world could lead to a decline of 2% in global output.
With tensions between the two countries not expected to ease anytime soon, there is no guarantee that the AIIB will not be affected in the future, but Jin is confident that the necessary checks and balances are in place his bank to avoid such a situation.
“We don’t choose projects from the Chinese government’s list,” he says. “We in the management are trying to reach a consensus rather than push through any big decisions by voting. We don’t do that.”
Initially seen as a competitor to the US-led World Bank, the two banks have in fact collaborated on dozens of projects over time. Over the past seven years, the AIIB has almost doubled its member countries, including close US allies such as Australia, Canada, the UK and Germany. China remains its largest shareholder with more than 26% of voting rights.
Compared to the World Bank, the AIIB’s investment strategy focuses on infrastructure development, including mitigation and climate change projects, Jin says. “Our idea is not to address poverty reduction directly. We will try to promote sustainable development through investment in infrastructure.”
Starting this July, all projects approved by the bank must comply with the Paris Agreement on climate change. “To deal with climate change and all these development issues, no institution can go it alone,” Jin says.
This is similar to President Biden’s World Bank nominee Ajay Banga, who recently reported Morning Edition that addressing today’s global challenges requires new partnerships and trillions of dollars.
To ensure that low-income people do not suffer further economic hardship from the move towards a green future, Jin is calling on the world’s richest countries to protect their most vulnerable citizens – and to share their resources with the rest of the world.
“Rich countries have to provide finance and technology,” he says. “If you really want to get a long-term benefit because you think this is in the best interest of humanity, a few have to sacrifice to be there in the short term.”
Jin is optimistic about the global economic outlook, even though he admits that some countries have a tougher road to recovery.
“Global growth is not synchronized. The growth of some countries seems to be strong,” he says. “Overall, I don’t think there will be any major problems looming large on the horizon.”
Not all economists agree. Many warn that high inflation and rising interest rates could hamper economic growth and lead to recession – possibly recession – in many countries.
The US and Japan – among the largest economies in the world – are two countries that have been affected by these economic heads. They are also the two countries that have so far refused to join the AIIB. Back in 2015, the US government opposed the creation of the AIIB and reportedly urged its friends and partners in Europe and Asia not to join.
“The United States remains focused on its existing commitments to the International Financial Institutions of which we are already a member, and has no plans to join the AIIB,” said a Treasury Department spokesperson told NPR.
Majd Al-Waheidi edited this digital story.
