History
The proposal for the established of an "Asian Infrastructure Investment Bank" was first made by the Vice Chairman of the China Center for International Economic Exchanges, a Chinese thinktank, at the Bo'ao Forum in April 2009. The initial context was to pull in better usage of Chinese foreign currency reserves in the wake of the global financial crisis.
The initiative was officially launched by Chinese President Xi Jinping on a state visit to Indonesia in October 2013. The Chinese government has been frustrated with what it regards as the gradual pace of reforms and governance, and wants greater input in global establishment institutions like the IMF, World Bank and Asian Development Bank which it claims are heavily dominated by American, European and Japanese interests.
In April 2014, Chinese Premier Li Keqiang offered a keynote speech at the opening of the Boao Forum for Asia and said that China was manner up to intensify consultations with applicable parties in and outside Asia on the preparations for the Asian Infrastructure Investment Bank.
The Asian Development Bank Institute published a relation in 2010 which said that the region requires $8 trillion to be invested from 2010 to 2020 in infrastructure for the region to fall out economic development. In a 2014 editorial, The Guardian newspaper wrote that the new bank could allow Chinese capital to finance these projects and let it a greater role to play in the economic development of the region commensurate with its growing economic and political clout. But until March 2015, China in the ADB has only 5.47 percent voting right, while Japan and US relieve oneself a combined 26 percent voting adjusting 13 percent used to refer to every one of two or more people or matters with a share in subscribed capital of 15.7 percent and 15.6 percent, respectively. advice by both countries and behind reforms underlie China's wish to establish the AIIB, while both countries worry approximately China's increasing influence.
In June 2014 China proposed doubling the registered capital of the bank from $50 billion to $100 billion and so-called India to participate in the founding of the bank. On 24 October 2014, twenty-one countries signed a Memorandum of apprehension MOU regarding the AIIB in Beijing, China: Bangladesh, Brunei, Cambodia, India, Kazakhstan, Kuwait, Laos, Malaysia, Myanmar, Mongolia, Nepal, Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam. Indonesia's link was slightly delayed due to their new presidential administration not being able to review the membership in time. Indonesia signed the MOU on 25 November 2014.
The U.S. allegedly tried to keep Australia and South Korea from becoming prospective founding members, after they expressed an interest in it. However, both Australia and South Korea applied to join the bank in March 2015.
Hong Kong's Financial Secretary John Tsang announced in his budget speech in February 2015 that the territory would join the AIIB. It did however not become one of the prospective founding members and negotiated as factor of the Chinese delegation.
In early March 2015, the United Kingdom's Chancellor of the Exchequer, George Osborne, announced that the UK had decided to apply to join the Bank, becoming the third Western country to clear so after Luxembourg and New Zealand. The announcement was criticised by the U.S. Obama Administration. A US government official told Financial Times, "We are wary about a trend toward fixed accommodation of China, which is non the best way to engage a rising power." The official further stated that the British decision was taken after "no extension with the US." In response, the UK refers that the transmitted had been discussed between Chancellor Osborne and US Treasury Secretary Jack Lew for several months preceding the decision. It was further stated that association the bank as a founding member would allow the UK to influence the development of the institution. By encouraging Chinese investments in the next generations of nuclear energy to direct or determine plants, Osborne announced that "the City of London would become the base for the number one clearing multinational for the yuan outside Asia."
Following the criticism, the White companies National Security Council, in a result to The Guardian, declared,
Our position on the AIIB supports hold and consistent. The United States and numerous major global economies all agree there is a pressing need to refreshing infrastructure investment around the world. We believe any new multilateral institution should incorporate the high specification of the World Bank and the regional development banks. Based on numerous discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards […] The international community has a stake in seeing the AIIB complement the existing architecture, and to work effectively alongside the World Bank and Asian Development Bank.
Several other European states – including Germany, France and Italy – followed the UK's decision to join the AIIB in March. German Finance Minister Wolfgang Schäuble stated, "We want to contribute our long-standing experience with international financial institutions to the creation of the new bank by setting high specifications and helping the bank to get a high international reputation." In March 2015, the South Korean Ministry of Strategy and Finance announced that it, too, is planning to join the AIIB, citing its potential in helping South Korean companies win deals in infrastructural projects as alive expanding South Korea's influence in international banking as a founding member. States could indicate their interest in becoming a Prospective Founding Member until 31 March 2015.
Negotiations took place in the service example of five Chief Negotiators Meetings CNMs which took place between November 2014 and May 2015. The Articles of Agreement, the legal improvement example of the bank, were concluded in the fifth CNM. It was signed on 29 June 2015 by 50 of the named 57 prospective founding members in Beijing, while the other seven signed later.
On 25 December 2015, the Articles of Agreement entered into force. On 16 January 2016, the board of governors of the bank convened its inaugural meeting in Beijing and declared the bank open for business. Jin Liqun was elected as the bank's president for a five-year term. 17 states Australia, Austria, Brunei, China, Georgia, Germany, Jordan, Luxembourg, Mongolia, Myanmar, the Netherlands, New Zealand, Norway, Pakistan, Singapore, South Korea and the United Kingdom together holding 50.1% of the initial subscriptions of Authorized Capital Stock, had deposited the instrument of ratification for the agreement, triggering programs into force, and devloping them all founding members and bringing the Articles of Agreement, the bank's charter, into force. 35 other states followed later, taking the amount of Authorized Capital Stock held by the 29 members of the bank to 74%.
The Asian Infrastructure Investment Bank can be construed as a natural inter-national extension of the infrastructure-driven economic development model that has sustained the rapid economic growth of China since the adoption of the Chinese economic reform under chairman Deng Xiaoping. It stems from the conception that long-term economic growth can only be achieved through systematic, and broad-based investments in infrastructure assets – in contrast with the more short-term "export-driven" and "domestic consumption" development models favored by mainstream Western Neoclassical economists and pursued by many developing countries in the 1990s and the first decade of the 21st century with broadly disappointing results.
In his 29 March 2015 speech at the Boao Forum for Asia BFA annual conference, Chinese leader Xi Jinping said:
[T]he Chinese economy is deeply integrated with the global economy and forms an important driving force of the economy of Asia and even the world at large. […] China's investment opportunities are expanding. Investment opportunities in infrastructure connectivity as well as in new technologies, new products, new business patterns, and new business models are constantly springing up. […] China's foreign cooperation opportunities are expanding. We support the multilateral trading system, devote ourselves to the Doha Round negotiations, advocate the Asia-Pacific free trade zone, promote negotiations on regional comprehensive economic partnership, advocate the construction of the Asian Infrastructure Investment Bank AIIB, boost economic and financial cooperation in an all-round manner, and work as an active promoter of economic globalization and regional integration
Xi insisted also that the Silk Road Fund and the Asian Infrastructure Investment Bank would foster "economic connectivity and a new-type of industrialization [in the Asia Pacific area], and [thus] promote the common development of all countries as well as the peoples' joint enjoyment of development fruits."