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A Speech on the Establishment Progress of Asian Infrastructure Investment Bank by Mr Jin Liqun, Head of the Working Group for Establishment of AIIB, C
Origin:Boao Forum for Asia      Time:2014-07-31 19:00:29    Views:9377603

Keynote Speech at the Opening Ceremony of the Financing Challenge Seminar

on Infrastructure Connectivity in Asia

Mr. Jin Liqun

Chairman of China International Capital Corporation, 

Head of Working Group for Establishment of Asian Infrastructure Investment Bank,

China’s Ministry of Finance

 

Mr. Zeng Peiyan, vice Chairman of the BFA Council,

Dear Guests, ladies and gentlemen,

Good morning!

It is my great honor to attend this important seminar. I would like to pay my tribute to my old friend Mr. Steve Howard, and all the members of your delegation.

The concept of Asian Infrastructure Investment Bank (AIIB) derives from China’s new administration that intends to establish a new multi-lateral financial organization to enhance Asia’s infrastructure development and connectivity. It originates in China, but in my view, as a new multilateral financial organization, it will migrate to an important platform for Asian countries to build partnership, and for countries around the world, developed countries and developing ones, Asia and other regions alike. It will play an important role in fostering connectivity, financial cooperation and many other fields. I believe in the end it will also stimulate the world’s economic recovery.

Since 1978 when China implemented the policy of reform and opening-up, the government has invested much in infrastructure construction. Thanks to the sustained infrastructure improvement, China has grown at a fast rate for more than three decades, and become one of the world’s most competitive economies. At first there were some doubts about the government’s heavy investment in infrastructure, as China then held a limited amount of foreign reserves, and had doubts over increasing foreign debts. However, investment in infrastructure does boost China’s economic growth.

China asked international multi-lateral financial organizations and some other countries for loans. China’s economy was not consumption-driven. It was finally agreed that China would not be hit by a credit crisis as long as it only borrowed from the World Bank and Asian Bank. For some Chinese youngsters, especially those born in the 1980s and 90s, it is hard to imagine a life without speedways, high voltage circuits and ports for containers. However, it was so at that time. There was no tunnel under the Huangpu River. The post office delivers messages faster than telecommunication. People living far from each other wrote letters to communicate. Now all these have been changed.

In recent years, many Asian countries have stepped up their investments in infrastructure and made some success. It is, however, still far from enough and needs to be accelerated. Some countries are slow in infrastructure development probably because they do not have adequate resources, and are faced with a huge gap between supply and demand, which in foreseeable future will not be addressed. According to many research institutions, the demanded funds will probably rise to 8 trillion dollars in a decade, which the World Bank and Asian Development Bank finds impossible to cover. Actually, what the world and Asia lack is not money but motivation and leadership. Last year when President Xi Jinping of China visited Indonesia, he introduced the idea of establishing an Asian Infrastructure Investment Bank to boost the regional connectivity and infrastructural development. Premier Li Keqiang reiterated the idea when visiting the Southeast Asian nations. The initiative has also been well responded to in many other regions.

When the idea was first introduced, some had doubts over whether it was necessary to found such a multilateral financial organization, the same question as raised when Japan proposed to establish Asian Development Bank fifty years ago. For years the World Bank has been trying to justify why it has been focusing on poverty reduction in developing countries since the Second World War. ADB has also helped the development of low income countries. In retrospect, it was a right decision to establish the ADB as it meets the development needs of some countries. Currently the ADB and World Bank alone cannot provide all the funds necessary to infrastructure development of Asian countries, and therefore we have to set up a new bank, which will function as a financing channel for the low income developing countries, which will enable them to benefit from the growth of other Asian-Pacific countries and receive more funds to accelerate their own development, and which will therefore have an agenda different from that of the Asian Development Bank.
Asian Infrastructure Investment Bank, by funding Asia’s infrastructure, together with the World Bank and ADB, will help achieve common development of the Asian countries. We are glad to hear the willingness of the World Bank and ADB to cooperate with the AIIB. I would like to highlight the relationship between the AIIB and ADB. The existing financial organizations for the past few decades have facilitated Asia’s economic growth, and provided China with financial resources for development. The importance of the ADB will never be undermined. Some national development banks also play their roles and the World Bank share its experience with others. The existing multi-lateral development banks have well served the region, and therefore we will build on their achievements, learn from their lessons and best design the function of the AIIB.

With the faith in the harmony between man and nature, we will strengthen the transparency of our work and take more innovative measures. With zero-tolerance of corruption, we have every confidence to establish a high-standard bank, and tackle security and environmental issues. This is not some game. We will dutifully follow every standard set for a project or a product. We will observe the international standards while assessing the effects of a project on the local environment, culture, sustainable development and standards of living. Meanwhile we will also do our best to grasp every new opportunity to establish innovative business models and gain more experience. We have already conducted three rounds of multi-lateral negotiations, present by all the countries showing interest. 22 countries participated in the third round of negotiation, and 3 were absent because of their domestic procedures. Meanwhile bilateral dialogues are also in the process. We have engaged America, Japan, India, Australia and some European countries in some well-responded bilateral talks. It will take us some time to make some preliminary decisions and resolve some problems. When it comes to decision-making, we completely follow the agenda. The bank is always open to all countries. As long as you are willing to or ready to join us, we are glad to welcome you.

China has been very sincere in this regard. We are open to all the countries and wish to boost the development of both Asia and the world. China is an inclusive, open and cooperative country. We have engaged ourselves in many negotiations and discussions, listening to other countries’ advice, and on this basis we have revised for many times the Governmental Framework of Memorandum of Understanding on Preparation of Establishing Asian Infrastructure Investment Bank. We welcome the participation of non-Asian countries into this.

We respect the advantages non-Asian countries have in management, technology and talent, and understand the restrictions brought by their domestic laws and internal procedures. However, we do hope that they can join us in this stage. AIIB will act with flexibility and open up communication channels for those who ready to join in. We are open to them and will always be so. We will do our utmost as a builder, and wish to foster close cooperation with other countries and shoulder our share of international responsibilities. With our concerted efforts, AIIB will become a new-type, sophisticated, clean and efficient bank, and bring win-win results to all parties.

I believe China’s Experience to have been well interpreted, not because I am a Chinese, nor because our generation is luckily involved in the reform and opening-up, and saw China’s fast development of infrastructure. Instead it is because China’s development methodology is logical. China’s Experience can be transplanted to any other country. If China can make it, there is no reason why another country cannot. Last evening, I had a talk with Steve Howard about an Australian Nobel Laureate for literature and his novel The Tree of Man. Australia is a young country compared to China, but does not lack the pioneering spirit, which is fully exhibited in the novel. Steve Howard and his wife devote themselves to the development of the western region that once had no infrastructure and is completely desolate. It is also a reflection of the pioneering spirit. We need a bank, not just today, but the future.

Finally I would like to thank the Boao Forum for Asia for inviting me here. I hope that you can share with us your advice on how the Asian Infrastructure Investment Bank should be built and how it should be managed in the future. We, together with other countries, will do our utmost to facilitate the establishment of the bank, make it a simplified, efficient multilateral development bank, and contribute our share to Asia’s sustained economic development and prosperity!

Thank you!