Report on AIIB structure denied

2015-05-07 08:51Global Times Editor: Qian Ruisha

No branches, fewer vice presidents, says expert

A senior expert on the Asian Infrastructure Investment Bank (AIIB) at the Ministry of Finance (MOF) dismissed on Wednesday a media report about a proposed plan to set up regional branches for the AIIB and a team of one president and 10 vice presidents.

China has proposed an executive system of one president and 10 vice presidents, the China Economic Weekly magazine reported Wednesday, citing unnamed sources close to the matter.

The report also said the AIIB founding members are considering setting up two branch offices of the AIIB, one in Europe and the other in Asia.

However, Zhou Qiangwu, chief of the Asia-Pacific Finance and Development Center, said the report was not accurate. Zhou's office, a think tank on international economics, is an affiliated agency under the MOF.

"There are no plans at present to set up branches, just a headquarters in Beijing. There might be some regional offices in the future, if such a need was agreed upon by all members," Zhou told the Global Times on Wednesday.

As for the arrangement of AIIB senior management, Zhou said there will be one president, but it is unlikely there will be as many as 10 vice presidents.

"The AIIB will aim for high efficiency, with keen-witted and capable staff," Zhou said.

Requests for comment sent to the Ministry of Finance were not answered by press time Wednesday.

Vice Finance Minister Shi Yaobin said on March 25 that issues concerning the setting-up of regional centers and the appointment of executives are still being discussed.

Zhou said the draft agreement for the AIIB has been under discussion by all the prospective founding members. The draft is expected to be agreed upon by late May, and in June it will be submitted to the AIIB members for approval. The AIIB will officially be launched somewhere between the end of 2015 and early 2016, Zhou said.

A meeting was held in Beijing from April 27 to 28 for preparing the draft proposal and another meeting will be held in Singapore in late May, according to the website of the MOF.

The AIIB, initiated by China in October 2014 to spur infrastructure investment in Asia, has 57 founding members. In contrast, the World Bank and the Asian Development Bank have 28 and 31 founding members, respectively.

"Things have been complicated as a large number of countries have pledged participation. This was unexpected," Yuan Gangming, a researcher at Tsinghua University's Center for China in the World Economy, told the Global Times on Wednesday.

More presidents means more voices will be heard, more interests will be taken into account, and there will have to be wider representation. The downside is that it will take more efforts to reach a consensus, Yuan said.

Di Dongsheng, a research fellow at the international monetary institute under Renmin University of China, noted that the AIIB will not regard making a profit as its primary goal.

"Its goal is to support and sustain the development of developing economies in Asia. The investment might go to projects that are not favored by commercial banks and with limited yields. However, China's economic restructuring and upgrading will also benefit from more of its investment and industrial capacity heading to global destinations," Di told the Global Times Wednesday.

The China Economic Weekly report cited experts as saying that there are many contenders to be president of the AIIB, with India showing a special interest.

"India is very confident it can get the president's post, with Prime Minister Narendra Modi pushing reforms at home. But it is not the only country seeking it," Dong said.

Yuan did not totally agree with this view. "There is no doubt that the president of the AIIB will be Chinese rather than Indian, since China has taken the greatest risks and responsibilities in the foundation and development of the AIIB."

"But China will not dominate the AIIB, since China has criticized the US dominance of the World Bank. China will not do a similar thing," Yuan told the Global Times. "The AIIB will give more weight to the opinions and benefits of developing countries."

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