What is the Asian Infrastructure Investment Bank (AIIB)?
The Asian Infrastructure Investment Bank (AIIB) is an international development bank with the stated goal of improving social and economic conditions throughout Asia. The creation of the AIIB was led by China, which maintains a controlling interest in the bank’s operations. The AIIB is headquartered in Beijing, and its current president is Chinese banker Jin Liqun.
The Asian Infrastructure Investment Bank was established in 2016 with $100 billion in capital. For comparison purposes, the amount is equal to about half the capital that the World Bank currently holds and approximately two-thirds of the capital of the Asian Development Bank (ADB), which is headquartered in the Philippines. It is viewed as an eventual potential rival to the World Bank, which China’s leadership views as being too much under the influence of the United States.
As of 2020, the bank counts more than 100 member countries, located in Asia, Africa, the Middle East, and Europe.
- The Asian Infrastructure Investment Bank (AIIB) is an international development bank with the stated goal of improving social and economic conditions throughout Asia.
- As a China-led enterprise, the AIIB also serves the purpose of strengthening China’s position as a world economic power.
- The bank finances various business enterprises and projects designed to increase international trade through improved infrastructure, primarily in Asian countries.
The Idea Behind the Creation of the AIIB
The Asian Infrastructure Investment Bank was created with the purpose of serving as a regional financing tool for Chinese President Xi Jinping’s “One Belt, One Road (OBOR)” initiative. The initiative is a push to promote economic connections between China and its neighbors in the Asia-Pacific region and to increase trade from Asian countries through the Middle East and into Europe. It is part of President Xi’s overall economic policies, which include the establishment of multiple trading and financial ventures led by China.
Overall, the bank aims to improve infrastructure in Asia and strengthening the economies of countries in the region through capital investment and business partnerships. As a China-led enterprise, it also stands to strengthen China’s position as a global economic power.
AIIB Organizational Structure
The governance of the AIIB includes a Board of Governors, a Board of Directors, the Senior Executive Management Team, and an International Advisory Panel.
The Board of Governors comprises a governor and an alternate governor, who are appointed by each member country of the bank. The board holds annual meetings, at which it considers resolutions such as the admission of new member countries.
The Board of Directors directly oversees the AIIB’s operations, an authority delegated to it by the Board of Governors. In addition to supervising the management and overall operations of the bank, the Board of Directors exercises approval control over the bank’s annual budget and operational strategy. It is also charged with establishing oversight mechanisms for the bank.
The Senior Executive Management Team is led by the bank’s President Jin Liqun, who also serves as Chairman of the Board of Directors. It includes, in addition to the President, five vice presidents and the bank’s General Counsel, Chief Risk Officer (CRO), and Chief Financial Officer (CFO).
The vice presidents of the Asian Infrastructure Investment Bank consist of an internationally eclectic mix. They include Sir Danny Sullivan, former Chief Secretary to the Treasury of the United Kingdom, and Dr. Joachim von Amsberg, formerly a vice president of the World Bank.
The 11-member International Advisory Panel is tasked with providing advice and consulting services to the AIIB in relation to business strategy, bank policies, and general operational matters. The panel, whose members are appointed to two-year terms by the bank’s president, meets twice each year, including a joint meeting with the Board of Governors.
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