PHNOM PENH – The new China-led Asian Infrastructure Investment Bank is not competing with the long-established Asian Development Bank backed by Japan and the United States, the Beijing-based bank’s leader said Thursday.
Instead, the two complement each other and enjoy “very good cooperation,” the Beijing-based bank’s leader Jin Liqun said Thursday.
Speaking to reporters on the sidelines of a regional conference in Phnom Penh, the Cambodian capital, Jin said there is a “misconception that the creation of this new bank is to create a rival against ADB or the World Bank.”
Jin recalled that Japan, with the support of many other countries, set up the ADB more than five decades ago at a time when the size of the region’s economy was much smaller than now and living standards and per capita income in many countries were very low
“Now, 50 years later, the size of the Asian economy is much, much bigger and the demand for infrastructure investment and other productive sectors is huge, so it may not be possible for one or two institutions to meet the needs of this region,” he said.
Jin said that while the two institutions “share the common objective of promoting infrastructure,” there is a “division of responsibility” between them.
Whereas the Manila-based ADB promotes social sectors such as health, education and poverty reduction through soft funding, Liqun said the AIIB focuses only on “infrastructure and other productive sectors.”
The creation of the AIIB was proposed by Chinese President Xi Jinping in 2013 and it was established in 2015.
As China’s economy has grown and its political influence has increased, the bank has drawn global attention and its membership has expanded to 70, already eclipsing the 67-member ADB.
Jin, who previously served five years as the ADB’s vice president, said he and ADB President Takehiko Nakao have been personal friends for many years and they have met 10 times in the last two years, most recently at last week’s ADB annual gathering in Yokohama.
“We share the common objective of promoting economic and social development in this region,” he said.
Jin’s remarks in Phnom Penh came after Nakao recently said in Yokohama that the two institutions “can complement each other.”
“The financing needs are so large so we do not need to regard the AIIB as a kind of a rival in that regard,” Nakao told reporters. “We can cooperate with the AIIB because they are focusing on infrastructure building.”
The two institutions have already cofinanced three projects. One was the construction of an expressway in Pakistan.
But fears are lingering that China will try to use the AIIB to build economic and financial hegemony beyond Asia.
The United States and Japan — the two biggest financial contributors to the ADB, in equal proportion — have not joined the AIIB, the only nations among the Group of Seven industrial powers to have stayed out.