TOKYO – Next month, the Asian Infrastructure Investment Bank (AIIB) will hold its first general meeting, the aim being to launch operations before the end of the year. And now China has doubled down on its effort to secure a controlling role in the new bank by increasing its initial investment from a planned $50 billion to $100 billion.
The additional Chinese investment certainly will strengthen the AIIB’s credit rating. But it may also have been necessary for China to maintain control of the bank, because the number of countries agreeing to participate in the AIIB’s launch has turned out to be far higher than China’s leaders expected.
Indeed, even doubling its initial investment will not give China a majority stake in the world’s newest multilateral lender. Still, it appears that China’s share, at around 30%, will be the largest of the 57 participating countries, which could effectively give it a near-veto over AIIB decisions.
That underscores the main concern among development economists and observers of international relations as the AIIB’s birth approaches. Will it turn out to be a bank of China, by China, and for China, or will it pursue a multilateral agenda in the manner of the World Bank and regional development banks like the Asian Development Bank (ADB) and Africa Development Bank (AfDB)?