AIIB isn’t the Chinese weapon Washington and Tokyo feared

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Ten years ago, Washington worried that China would use the Asian Infrastructure Investment Bank (AIIB) as a means of imposing its political will on Asia’s infrastructure. But…

Ten years ago, Washington worried that China would use the Asian Infrastructure Investment Bank (AIIB) as a means of imposing its political will on Asia’s infrastructure. But after a decade in operation, it may be time to reconsider that view.

The AIIB now holds triple-A ratings from the leading international rating agencies. India, which has abstained from Beijing’s Belt and Road Initiative, has genuinely benefited for the bank’s lending. Although the AIIB is not free of geopolitical considerations, it is increasingly hard to view it as a purely Chinese financial weapon.

Having served in Pakistan’s Federal Service for roughly 37 years and held additional charge as managing director of the China-Pakistan Economic Corridor (CPEC) Secretariat from 2020 to 2023, I have observed both the bilateral and multilateral sides of infrastructure financing.

And in my estimation, the US, Japan and their outlier allies should engage with the AIIB and hold it to account for the claims it makes.

There is no doubt that China pushed for the creation of this bank and is its largest shareholder. But the AIIB is undeniably a multilateral lending institution, so its $100 billion in capital is not all Chinese money. Nor does Beijing solely decide where that lending does and doesn’t go.

To be sure, China has strong influence over the AIIB. It holds 26.4% of the voting power, giving it a blocking minority on decisions that require 75% of the vote. Although the bank’s international character imposes some restraint, China does wield significant power.

That said, it is a treaty-based bank, with lending policies and oversight provided by other shareholders, among them Australia, France, Germany, Italy and South Korea. Cooperation with the World Bank and the Asian Development Bank (ADB) means AIIB-funded projects have established appraisal and procurement processes.

All of this has helped ensure AIIB lending discipline. The bank carries a very high credit rating of AAA/AAA from Moody’s, S&P and Fitch…

Th…

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