BEIJING – Chinese President Xi Jinping on Saturday inaugurated the Asian Infrastructure Investment Bank, saying China will take more international responsibility with the birth of the new lender.
“This is a historic moment,” Xi said, adding that China wants to improve the investment environment and integration in Asia through the 57-member AIIB.
Xi made the remarks at a ceremony in Beijing to mark the inception of the bank, which symbolizes China’s rise and is seen as a challenge to the U.S.-dominated global financial architecture.
“It will enable China to undertake more international obligations, promote improvement of the current international economic system and provide more international public goods,” he said at the Diaoyutai State Guesthouse.
The event came on the same as elections on the self-ruled democratic island of Taiwan, which is seen by Beijing as a renegade province. Independence-leaning opposition leader Tsai Ing-wen won the presidential election by a landslide amid public worries, especially among young people, about the growing clout of mainland China.
Chinese official media repeatedly reported the inauguration of the AIIB, but there was almost no coverage of the Taiwan elections.
While a more than dozen European countries decided to join the AIIB, Japan and the United States did not do so, citing such reasons as skepticism over whether it will have sound lending standards and whether infrastructure projects to be funded by it will be environmentally friendly.
To begin with, the investment bank has an authorized capital stock of $100 billion. China is its largest shareholder, with a stake of about 30 percent, followed by India, Russia, Germany and South Korea, none of which has a share of more than 10 percent.
China will effectively have veto power, as approval by at least 75 percent of those with voting rights will be necessary for important issues such as changes to the board of directors.
At the ceremony, attended by about 450 people, including ministers and senior officials of the founding members, Xi said China will invest an additional $50 million in the AIIB as a special fund.
He said the institution will be a “highly efficient, upright and a new type of multilateral development bank in the 21st century.”
Xi proposed the AIIB’s creation in October 2013 to secure more funds for the building of infrastructure, such as roads, railways and power stations, in Asia.
China’s role in creating the AIIB in less than three years has been broadly welcomed by developing countries because the lending capacities of existing multilateral institutions, including the World Bank and the Asian Development Bank, cannot meet the fast-growing demand for their infrastructure investment.
China sees the AIIB’s success as highly important for the country’s overarching goal of connecting countries along the ancient Silk Road more closely under the “One Belt and One Road” initiative as it steps up efforts to solidify and extend its political and economic influence as far away as Africa.
Jin Liqun, a former Chinese deputy finance minister, was elected as the first head of the Beijing-headquartered organization.
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.