Definition of Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is one of four institutions created by Beijing in what some see as an attempt to create a Sino-centric financial system to rival western dominated institutions set up after the second world war.

The other institutions are the New Development Bank (better known as the Brics bank) and a contingent reserve arrangement, seen as alternatives to the World Bank and the International Monetary Fund; and a proposed Development Bank of the Shanghai Co-operation Organisation, a six-country Eurasian political, economic and military grouping dominated by China and Russia.

The AIIB offers an alternative to the Asian Development Bank, which focuses on poverty relief and lacks the firepower to undertake the large-scale infrastructure projects that are the remit of the AIIB. [1]

 

AIIB in the news

In 2015, the FT reported that according to the Chinese foreign ministry, 47 applications have been received to join Beijing’s rival to the Asian Development Bank and other US-led financial institutions. Some 30 applications has already been approved.

The rush to the AIIB embarrassed Washington, which initially tried to dissuade applicants, citing potential governance issues at the proposed bank. However, those seeking founding-member status include traditional US allies the UK, Australia, South Korea, Taiwan, France and Germany. [2]