World Economy

Chinese Named AIIB President-Elect

Chinese Named AIIB President-ElectChinese Named AIIB President-Elect

The Beijing-based Asian Infrastructure Investment Bank is one of several projects that President Xi Jinping has unveiled recently in a bid to expand China’s influence and financial clout in Southeast and Central Asia.

At a negotiators’ meeting on Monday in Tbilisi, the capital of Georgia, member shareholders chose Jin Liqun—China’s former vice finance minister—as president-elect of the AIIB, according to the official Xinhua News Agency.

He was one of two candidates after Russia nominated Andrey Bugrov, vice president of the mining and smelting company Norilsk Nickel Mining & Metallurgical Co. There was no immediate word on the vote breakdown.

China’s approximately 30% stake in the AIIB has given it an effective veto over major issues, and the well-regarded Jin, who has been leading the bank’s interim secretariat, has been widely expected to gain the top job. The China-led infrastructure bank has stressed that the election—expected to be held sometime in the next several months—will be an “open, transparent and merit-based process.”

Jin has worked at the Asian Development Bank, the China International Capital Corp. and at China’s sovereign-wealth fund, the China Investment Corp.

Interest in the new infrastructure bank, which China first floated as an idea in 2013, reportedly exceeded even Beijing’s expectations. US allies signed on despite concerns voiced by Washington early in the process that the new bank might cut corners on environmental, social and anti-corruption standards.

China took another step in its bid to create a rival to the World Bank and Asian Development Bank with the naming of its candidate as the likely president of the new institution, Wall Street Journal reported.

Analysts say creating the bank is the easy part. Far more difficult will be managing the multilateral organization under a global spotlight while juggling a range of national interests. China has vowed to streamline approvals and funding delays that have slowed projects at existing multilateral lenders.

A 2014 World Bank study found that the average time for a privately managed bank project to go from concept to implementation is two years and five months. But veterans of multilateral organizations say it is a fine balance between moving quickly and taking the time required to build a consensus, properly vet projects and ensure that responsibility is shared if a project fails.

China is the largest shareholder of the bank, followed by India and Russia.

The AIIB is expected to commence operations by the end of 2015. The bank is viewed as an alternative to Western-dominated financial institutions, such as the World Bank and the International Monetary Fund.