A revealing encounter with AIIB president Jin Liqun

The 67-year-old former vice minister of finance – and ex-vice president of the World Bank and Asian Development Bank – gave a lively presentation to senior editors from the Asia News Network (ANN) at China Daily’s offices recently. The question-and-answer session that followed was a robust exchange of the kind Chinese officials rarely tolerate.  

The China-initiated AIIB now has 57 founding members, which would rise to 100 by the end of the year, said Jin, when the first batch of infrastructure projects will be announced. The United States and Japan have so far shunned entry, but “the door has been open and will remain open”, said the president.

But the question on many lips is, how can the bank erase its image of being a diplomatic tool of Beijing? 

As CEO, how would he respond to questions from board members about this “brand image” when the bank launches its “products”?  

Jin, who is fluent in English and French and has a life-long love of Shakespeare, paraphrased English author Jane Austen to hit back at scepticism over China’s motivation for creating the bank:

“Scepticism must always be forgiven, you know, because there is no hope of a cure,” he said, replacing “selfishness” in the original quote with “scepticism”.

Sceptics must be forgiven, of course, because the doubts and suspicion have not emerged out of nowhere. The hype and symbolism have not gone unnoticed. 

As well as being the initiator, China is the biggest single shareholder in the bank, with 30 per cent of the $100,000 billion registered capital. (Thailand has a 1.45-per-cent stake.)

Jin, as the first president, is a Chinese Communist Party member. The bank’s offices are located in China: For now, operations are being carried out in a nondescript office tower in Beijing’s financial district, with plans to build permanent headquarters in the Olympic Park near the Bird’s Nest stadium.

“We will soon appoint a Japanese national in a senior position in the bank,” Jin declared, by way of confirming his earlier statement that the AIIB would earn international trust and credibility through its good governance. To qualify for screening by the bank, projects must be “financially sustainable, environmentally friendly and socially acceptable”.

The AIIB wouldn’t do anything that was driven by politics and would not interfere in political affairs, he insisted. 

Although Jin gave a long introductory brief on China’s much-hyped “One Belt, One Road” initiative, the president confirmed that Beijing would not borrow from the bank.

“It doesn’t make sense for China to start this bank and borrow massively from his bank. India can borrow. India is No 2. China doesn’t want to borrow, even though China has 30 per cent of the bank’s shares and will also contribute $50 billion as a donation to the bank to establish a special fund,” he said.

Sceptics also suggest that the AIIB was designed by China to counter the World Bank, which is dominated by the US and Europe, and the Asian Development Bank (ADB), long under Japan’s shadow. But Jin rejected that perception, as well.

The AIIB was not trying to upend the international financial and economic order, he insisted, even though that order has much room for improvement. He cited Chinese President Xi Jinping’s statement that China had already benefited from the general support of the World Bank, the ADB and other bilateral sources. “And now it’s China’s turn to contribute. That is the basic idea or principle of this institution,” he added.

But surely there would be no need for a new multilateral financial institution like the AIIB if the World Bank and ADB were already doing a good job. What are their deficiencies?

If the usually jocular Jin felt cornered by that question, he didn’t show it. “It’s not appropriate for me to make judgements on the merits or demerits of existing institutions. My job is to learn from the strong points.”

He admitted to having received an even more direct question in this regard: Wasn’t he worried about rivalry from the World Bank and the ADB?

His answer was equally diplomatic and matter-of-fact: “I worked for six years on the board of the World Bank, five years in management. If you think the sibling, the new institution, has sold out the existing institution, I would not agree.”

The encounter left many Asian journalists present convinced that Jin Liqun is a banker, a diplomat and a technocrat all rolled into one. According to the Financial Times, Western diplomats have dubbed him Beijing’s “chief barbarian handler”, meaning his job is to deal with foreigners.

Jin finds the term offensive. “I take exception and issue with this description,” he told the FT’s Asia editor Jamil Anderlini recently. “I’m not dealing with barbarians, I’m dealing with people in modern civilisations.” 

Jin Liqun certainly lived up to that standard during our hour-long exchange.