For much of the past decade, the China-led Asian Infrastructure Investment Bank, or AIIB, and its president, Jin Liqun, have worked hard to convince people that it is not a tool of China.
Canada ordered a halt to the country’s activities at the AIIB and an investigation into the criticism, hours after Bob Pickard, a Canadian former AIIB communications chief, tweeted the infiltration theory.
The AIIB said the remarks were baseless. On Thursday, the AIIB said it would conduct an internal review of Pickard’s comments, led by its chief legal counsel, and report the findings to a newly formed panel of directors.
The Chinese embassy in Canada called Pickard’s remarks “pure hype for sensationalism and an outright lie.”
The incident underscores a growing challenge to the ambitions of Chinese leader Xi Jinping, who seeks to expand China’s influence and financial power and reshape the international order, which he sees as favoring the West.
The AIIB, established in 2015 and officially started operating in 2016, is a multilateral lending institution spearheaded by China, aiming to be on an equal footing with other multilateral lending institutions widely considered to be dominated by the United States, Europe or Japan, such as the World Bank. Bank), International Monetary Fund, Asian Development Bank, etc.
Many Western countries, including Germany, France and the UK, have opted to become AIIB members despite the U.S. government urging allies to reject the AIIB.
Jin Liqun, 73, has worked at the World Bank and the Asian Development Bank and is credited with helping build the AIIB’s reputation as an independently run financial institution. Jin Liqun, a former Chinese vice-minister of finance who has led the AIIB since its inception, told The Wall Street Journal in an interview in March that the AIIB is based on international best practices. Practice works, and said he wanted the facts to speak.
China holds 26.6% of the shares in the AIIB, and is the largest shareholder of the bank. It has de facto veto power over any major decision-making; the AIIB implements a 75% absolute majority approval system for major issues. The bank says it has staff from 65 countries and economies serving 106 members.
Austin Strange, who specializes in China’s international development finance at the University of Hong Kong, said Pickard’s allegations hurt the AIIB’s reputation and could undermine China’s efforts to portray itself as a provider of high-quality, sustainable infrastructure for developing countries s hard work.
But unless members larger than Canada raise similar concerns, the matter is likely to have no major consequences, Hao said.
The AIIB’s public affairs crisis began on Wednesday after Pickard said he was resigning from the bank, alleging that the AIIB was “dominated by the Chinese Communist Party” and had a toxic culture within it.
When The Wall Street Journal asked him if he knew of any instances where party members had banded together to veto the board, Pickard said, “I haven’t seen anything like that.”
To illustrate the CCP’s influence, Pickard recounted an incident he said involved a junior employee in his department who he said was a party member. Dissatisfied with a decision, the employee went directly to a “party member” in the governor’s office, Pickard said, a process that Pickard likened to a “parallel structure”.
The AIIB said the events Pickard described never happened. “This situation has not happened and is fabricated. Bob Pickard is not aware of any such instances because the fact is that the AIIB is an apolitical institution,” the bank said in an emailed statement. “We are an independent multilateral development bank with credible, internationally recognized governance standards.”
AIIB employees said Pickard’s tweet was surprising. Current and former foreign employees said Pickard’s claims of Communist interference did not match their own experiences at the bank.
From the early to mid-2000s, Pickard worked as a long-term PR consultant in Singapore, Japan and South Korea before joining the AIIB last March, according to his LinkedIn profile.
In China, membership in the Communist Party has long been considered a prerequisite for career advancement in the country’s highly competitive society, especially for employees of government agencies and state-owned enterprises. Under Xi Jinping, the Chinese Communist Party has stepped up efforts to increase its presence and influence in the private sector. Many of the top executives in China’s private companies are party members.
According to news reports and briefing materials published by Chinese media, although the recent official resume of Jin Liqun does not state his party status, he used to work in the sovereign wealth fund China Investment Corp. ) served as the deputy secretary of the party committee and served as a member of the party group of the Ministry of Finance of China.
The AIIB, which has $100 billion in authorized capital, has been conservative in its use of funds and the pace of deals has slowed. During the COVID-19 pandemic, many of the key projects financing developing countries have shifted from building infrastructure to addressing more pressing medical needs as China closed its borders and staff were unable to go to the site to inspect projects.
Jin Liqun said in 2015 that the bank would lend about $10 billion to $15 billion a year in the first five to six years after opening, according to Chinese state media. In 2022, the bank provided $6.8 billion in loans to 42 projects, down from 51 loans in 2021 and total loans of about $10 billion.
To find more projects, Jin Liqun said in March that the bank was actively engaging with the private sector and host governments. He said at the time that the AIIB would be particularly active in projects involving climate change mitigation and adaptation.