Jin Liqun, president of the AIIB, speaks to journalists at a press conference in Beijing in 2016.
Fred Dufour/AFP via Getty Images
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Fred Dufour/AFP via Getty Images
Jin Liqun, president of the AIIB, speaks to journalists at a press conference in Beijing in 2016.
Fred Dufour/AFP via Getty Images
How have rising geopolitical tensions between the US and China impacted the China-led Asian Infrastructure Investment Bank (AIIB)? Its president, Jin Liqun, said they had no impact.
“Regardless of bilateral issues, it seems to be in trouble [between] these two major countries, the AIIB has maintained a very good, close working relationship with the respective US government institutions, financial institutions and businesses,” Jin told NPR’s Steve Inskeep on Morning version.
He said the bank has close relationships with Wall Street firms as well as with the US Treasury Department.
Controversial issues — from Taiwan, to China’s spy balloon, to trade — have pushed both countries into conflict in recent years. Other financial institutions have raised concerns about the growing monopoly between Beijing and Washington.
According to a recent report by the International Monetary Fund (IMF), hedge funds are particularly sensitive to geopolitical tensions and tend to reduce cross-border allocations, especially for countries with different foreign policy prospects. IN other reportOngoing tensions between the world’s two largest economies could lead to a 2% drop in global output, the IMF said.
With tensions between the two countries not expected to ease soon, there is no guarantee that the AIIB will not be affected in the future, but Jin is confident his bank has the necessary checks and balances. to avoid such a scenario.
“We don’t select projects from the Chinese government’s list,” he said. “We in management try to reach consensus rather than pass any important decisions by voting. We don’t do that.”
Initially considered a competitor of the US-led World Bank, the two banks have actually collaborated on dozens of projects over the past time. Over the past seven years, the AIIB has nearly doubled the number of member states, including close US allies such as Australia, Canada, Britain and Germany. China remains the largest shareholder with more than 26% voting rights.
Jin said that compared to the World Bank, AIIB’s investment strategy focuses on infrastructure development, including climate change mitigation and adaptation projects. “Our idea is not to tackle poverty directly. We are trying to promote sustainable development through investment in infrastructure.”
Starting this July, all projects approved by the bank will need to be in line with the Paris Agreement on climate change. “To deal with climate change and all those development issues, no one organization can act alone,” Jin said.
This echoes President Biden’s World Bank candidate, Ajay Banga, who just said Morning version that addressing today’s global challenges will require new partnerships and trillions of dollars.
To ensure that low-income people will not suffer additional economic hardship as a result of the transition towards a green future, Jin is calling on the world’s wealthiest nations to protect their vulnerable citizens. them — and share their resources with the rest of the world.
“Rich countries need financing and technology,” he said. “If you really want to achieve long-term gain because you think this is in the best interest of humanity, then there must be some short-term sacrifice.”
Jin is upbeat about the global economic outlook, although he acknowledges that some countries face a tougher road to recovery.
“Global growth is out of sync. Growth in some countries seems to be very strong,” he said. “In general, I don’t think there’s going to be big trouble coming.”
Not all economists agree. Many warn that high inflation and rising interest rates could hamper economic growth and lead to recessions — possibly recessions — in many countries.
The US and Japan – among the world’s largest economies – are the two countries affected by those economic headwinds. They are also 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 allies and partners in Europe and Asia not to join.
“The United States remains focused on its existing commitments to the International Financial Institution, of which we are already a member, and have no plans to join the AIIB,” a Treasury spokesperson told NPR.
Majd Al-Waheidi edited this digital story.
