The incoming president of China’s new international development bank said he expects the institution to lend $10 billion to $15 billion a year for the first five or six years and said the bank would not be a tool of Beijing.
Jin Liqun, will lead the Asian Infrastructure Investment Bank (AIIB) after it’s inauguration expected toward the end of the month. He said on Tuesday that the bank will start operating in the second quarter of 2016, reported Reuters.
In an unusual twist in light of the Chinese currency being accepted in the International Monetary Fund’s basket of reserve currencies, the bank will use the US dollar as the operating currency of the bank.
The AIIB is China’s attempt to create a new financial order that isn’t dominated by US-backed institutions such as the World Bank and the IMF. Despite this, the AIIB is talking with the World Bank for co-financing, said Jin.
As operations ramp up next year, he said he expects the bank to lend “probably $1.5 billion to $2 billion.”
“In regular years, given $100 billion in registered capital, I think every year I expect to do probably $10-$15 billion, for the first five or six years,” Jin told a European business forum, reported Reuters.
Jin did not specify priority projects or which countries would be the beneficiaries of initial loans, but said around 30 countries are waiting in line for membership, which would increase the bank’s capital.
Proposed by President Xi Jinping less than two years ago, the AIIB has become one of China’s biggest foreign policy successes. Despite the opposition of Washington, almost all major US allies — Australia, Britain, German, Italy, the Philippines and South Korea — have joined.
The US has said China will wield a huge amount of influence over the new institutions.
Jin addressed that by saying that while China holds the de facto veto power in the bank based on a function of GDP, as more countries join the bank, China’s relative voting power will decrease. He added the bank is not just a way to increase the influence of Chinese state-run companies.