Global Policy Volume 10 . Issue 4 .

November 2019
653

Is the AIIB a China-controlled Bank? China’s

Evolving Multilateralism in Three Dimensions
(3D)

Special Section Article

Jiejin Zhu
Fudan University

Abstract
Is the Asian Infrastructure Investment Bank a China-controlled bank? This basic question highlights the issue of the Asian
Infrastructure Investment Bank’s (AIIB) international credibility, especially as a multilateral institution. AIIB president Jin Liqun
recognized the ‘multilateral challenge’ for China from the outset of the planning to create the new Bank, and he understood
that the new Bank would only be a real success for China if the AIIB is truly a multilateral development bank – inside Beijing
circles, he added, ‘and only if the new Bank does better than the long-established counterpart MDBs’. These sentiments were
alluded to in Jin’s remarks in the Financial Times: ‘China benefited a lot from the existing international system. China needs to
do something which can help it be recognized as a responsible member and maybe a responsible leader in the future. . . if it
does well, that will enhance China’s credibility, but if this institution does not follow the international best practice, who will
believe in China in the future’. Skeptics, however, question whether it is ever possible that China will allow the AIIB to develop
into an actual multilateral bank.

Ever since China floated the AIIB proposal in 2013, the ques-
tion of the AIIB being ‘China-controlled or not’ has emerged
as a key point of debate within international society. This
essay challenges the notion that the AIIB is a China-con-
trolled Bank. It does so by exploring the nature of the rela-
tionship between China and the AIIB. We examine whether,
or to what extent, China has supported multilateral engage-
ment and cooperation within the AIIB; and whether China
has only or mainly pursued its own national interests with
the AIIB, or whether it has, in key instances, sacrificed its
national interests in order to support the greater collective
good. We assess whether China is giving the AIIB the ‘space’
to develop as a multilateral development bank, rather than
treating it merely as a China-controlled Bank, or as some
disparage, the Bank for the Belt & Road Initiative (BRI).
Actions speak louder than words, and the method used
here is to examine China’s actions, its international behavior,
in creating the AIIB, and in managing its ongoing relations
with the AIIB. It is argued that China clearly played a strong
role in shaping the design and character of the AIIB at its
origins, and after the Bank opened, China’s influence has
remained significant, though somewhat obscured and diffi-
cult to trace. Moreover, it is further suggested that China
could dominate the AIIB, including through the use of its
veto power on major strategic decisions, if it were to choose
to use this power. China’s latent power or capacity to domi-
nate is strong, and only time will tell whether China will
choose to do so in the future. But so far, China has exer-
cised restraint in dealing with the AIIB, especially China’s
Ministry of Finance (MoF), the main Chinese government
interlocuter with the Bank. The main finding is that MoF has
provided the AIIB the ‘strategic space’ it needs to foster its
multilateral character, and to sustain the growth of its multi-
lateral culture, and by extension, its international credibility
as a multilateral development bank.1 It is argued that Beijing
is doing so along three dimensions. First, during the estab-
lishment phase for the AIIB, China’s Party and government
leaders supported the Chinese negotiators, and the AIIB
Multilateral Interim Secretariat (tasked with establishing the
AIIB, 2014–16) to enter into detailed multilateral negotia-
tions with the prospective members of the AIIB, from Asia,
and then also from Europe, Africa and Latin America, with
the goal of building new multilateral consensus and agree-
ment on the institutional design of the Bank. The multilat-
eral discussions led to changes in China’s original designs
for the new Bank, and equally important, Chinese authorities
also supported the legal codification of the arrangements
for the new multilateral bank.
Second, after the AIIB opened, and commenced with the
operational phase, China has further supported the develop-
ment of the multilateral character and culture of the AIIB by
supporting the Bank to work within the ‘family’ of multilat-
eral development banks (MDBs), by partnering with the
established MDBs, including the World Bank (WB), Asian
Development Bank (ADB), the European Bank for Recon-
struction and Development, and other MDBs, to co-finance
projects, and conducting by human resources exchanges.
The preparatory discussions for these partnerships actually
started in 2015, before the official launch of the AIIB in Jan-
uary 2016. Third, from 2017 onwards, Beijing has supported

Global Policy (2019) 10:4 doi: 10.1111/1758-5899.12763 © 2019 University of Durham and John Wiley & Sons, Ltd.
 Jiejin Zhu
654
further multilateralization of the AIIB by backing the Bank to
join the collective effort to build a new multilateral coordi-
nation center for development finance, called the Multilat-
eral Cooperation Center for Development Finance (MCDF).
The rest of this essay is organized into three sections. The
next section details how China has helped to foster the
AIIB’s multilateral character during the establishment process
by supporting multilateral negotiations over the main pur-
pose and goals, rules, structure, and legal parameters for
the Bank, before the analysis turns to examining how China
has further supported the multilateralization of the AIIB by
supporting the Bank’s partnership strategy with the existing
MDBs, through co-financing large-scale infrastructure pro-
jects. The third section examines another dimension of Chi-
na’s support for the multilateralization of the AIIB, of
supporting the AIIB to join the MCDF. The analysis underli-
nes that the AIIB, as a newly created international financial
institution backed by a rising power, faces a dilemma that is
not easily resolved, between, on the one hand, needing to
foster international legitimacy and multilateral credibility,
and on the other hand, pursuing innovation or new ways of
doing things.
Multilateral negotiations for the AIIB’s
establishment
The specific proposal for the Asian Infrastructure Investment
Bank was put forward by Chinese President Xi Jinping dur-
ing a visit to Indonesia in Southeast Asia, and he spoke to
the infrastructure needs of Asia: ‘At present, Asian countries,
especially emerging economies and developing countries,
are in great financial need to develop infrastructure. Particu-
larly in the face of such severe challenges as mounting
downward pressure and financial volatility, it is necessary to
mobilize more funds for infrastructure development to
maintain sustained and steady economic growth and pro-
mote connectivity and economic integration in the region.
China proposes to establish a new Asian Infrastructure
Investment Bank’.2
But skeptics have charged that China is not motivated by
a desire to help other developing and emerging countries,
but rather that the AIIB is an instrument for control by the
Chinese government. Is this so? China’s proposal was wel-
comed by the developing countries from South-east Asia,
South Asia and Central Asia, but met by skepticism from the
non- Asian developed countries, especially in Europe and
North America. One of the criticisms was that the AIIB would
merely be an instrument of Chinese government control.
Lawrence Summers, former US treasury secretary, suggests
that AIIB was China’s direct response to the US congress
rejecting the 2010 IMF reform agreement which would have
greatly increased China’s share (Summers, 2015). Sun Yun,
for example, addresses the perception of Chinese control,
noting that China is the largest shareholder of the Bank,
and its headquarter is in Beijing, and its president a Chinese
citizen, and that analysts in the developed countries think
that China has both geo-economic and geo-political strate-
gies behind the AIIB proposal. Sun Yun acknowledges that
© 2019 University of Durham and John Wiley & Sons, Ltd.
Beijing did reduce its voice within the Bank when it agreed
to support the addition of non-regional members to be in
the AIIB, but her main argument is that the new AIIB reflects
what she sees as China’s more ‘assertive foreign policy pos-
ture’ under President Xi Jinping, that aims for the ‘great
rejuvenation of the Chinese nation’, and establishing a new
‘proper’ international order that reflects China’s great eco-
nomic and political weight, and its prioritization of Asian
diplomacy (Yun, 2015).
From a geo-economic perspective, several Chinese ana-
lysts and foreign observers also argue that China wishes to
use the AIIB to export its excessive industrial capacity and
promote the RMB internationalization (Lo, 2015). For exam-
ple, Roach and colleagues suggested that the Chinese econ-
omy has major overcapacity in many of its industrial sectors,
and AIIB is in part designed to create opportunities for Chi-
nese state-owned companies to ‘go abroad’ by expanding
their access to new external markets. In addition, the AIIB
can help the Chinese government to diversify its invest-
ment, and also to promote the internationalization of RMB
(Roach et al., 2015).
From a geo-political perspective, some people argued that
the AIIB would be used by China as a diplomatic tool to
‘subsidize’ the countries that are friendly toward China in
the escalating US-China competition in the Asia Pacific area,
following the Obama administration made its ‘Pivot to Asia’
(Keck, 2014). Sun Yun writes similarly that, with the AIIB,
China can strengthen economic interdependence with its
neighbors, and increase its leverage in settling disputes in
the South-China Sea (Yun, 2015).
These interpretations raise doubts about the AIIB’s inter-
national credibility as a multilateral institution, and may
have temporarily halted the growth of its membership
within the Asian region. By 24 October 2014, only 22 coun-
tries had signed the memorandum of understanding (MOU)
to establish the AIIB, including Bangladesh, Brunei Darus-
salam, Cambodia, China, India, Indonesia, Kazakhstan,
Kuwait, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal,
Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka,
Thailand, Uzbekistan, and Vietnam. Except China, Singapore
and Qatar, the rest of the signatories were borrowing and
developing countries in South, Southeast, and West Asia.
Major and more developed economies within the region,
including Japan, Korea, Australia, Russia, initially sat on the
sidelines. Japan refused to join despite the outreach by Chi-
nese diplomats several times, each time expressing con-
cerns about the AIIB’s governance and transparency, and
more indirectly, Tokyo’s concerns about possible competi-
tion with the ADB. The US repeatedly voiced its concern
that the AIIB would lower the international standards of the
WB and the ADB, and also discouraged its Asian allies not
to join, including Australia and South Korea (Ba, 2017).
Although China and the AIIB interim secretariat tried to
allay concerns, and rebut the criticisms, initially, the US and
Japanese accusations and Washington’s warnings against
joining did cast doubt onto the Chinese and AIIB interim
secretariat’s efforts to establish the international credibility
of the new Bank.
Global Policy (2019) 10:4
 China’s Evolving Multilateralism
However, the situation evolved rapidly from late 2014 to
early 2015. In particular, the AIIB received a boost of interna-
tional legitimacy and credibility when on 12 March 2015 the
UK government announced it would be the first major
developed country in the West to seek to join the AIIB. The
UK Chancellor of the Exchequer, George Osborne
announced that the UK ‘intends to become a prospective
founding member of the AIIB’, and he also declared that ‘UK
will play a key role in ensuring that the AIIB embodies the
best standards in accountability, transparency and gover-
nance, which will be essential to ensuring the success of the
initiative and to unlocking the potential benefits for the
wider global economy’ (Osborne, 2015). The US administra-
tion made clear its displeasure about Osborne’s decision to
join the AIIB, with one US official telling the Financial Times:
‘We are wary about a trend toward constant accommoda-
tion of China, which is not the best way to engage a rising
power’ (The Guardian, 2015). Despite the push-back from
the US, the UK’s decision to join set in motion a wave of
other membership applications, including Germany, France,
Italy, Switzerland, Russia, South Korea, Australia, Brazil, Tur-
key. According to Zhao Ke, a Chinese European studies
scholar, the decision of the European powers to join the AIIB
was their new engagement strategy, in which they would
corral the AIIB, and keep it within the existing international
liberal order, and global financial system (Zhao, 2015; see
the Gabusi essay which details the European intentions).
Jin Liqun, president of the AIIB, has noted that the Chi-
nese government originally expected that approximately 20
countries would join the new Bank, and probably only
developing countries in East Asia, South Asia and Central
Asia (Hu, 2016). But by the ‘founding membership’ deadline
of 31 March 2015, 57 countries had signed up, including 37
Asian countries and 20 non-Asian countries, and with a mix
of developed and developing countries in each group. The
number was much larger than initially expected, and was
widely seen as a victory of Chinese economic diplomacy
(White, 2015). However, the dramatic expansion in the AIIB’s
membership also involved China facing group pressure from
the European governments, who negotiated as a grouping,
and they pressed Beijing to make a number of concessions
in order for the European governments to agree to join. As
such, these negotiations took on a multilateral quality from
the start, in which China ended up in a give-and-take bar-
gaining.
In the course of these negotiations, China essentially
agreed to ‘tie its hands’, by reducing its quota allocation
and its capital contribution to the Bank, and reducing its
voting share, and by agreeing to the European demands for
high standards of transparency and oversight in the gover-
nance and management of the Bank, and by accepting glo-
bal best practices for environmental and social standards
and safeguards. In return, Beijing insisted and gained agree-
ment from the Europeans, that the influential Board of
Directors be non-resident, as Chinese officials and Jin Liqun,
the president of the AIIB originally envisioned (Wilson,
2019). The deeper significance of Beijing’s concessions, in
terms of building multilateral credibility has seemingly been
Global Policy (2019) 10:4
655
missed in the assessments to date of the AIIB, which have
instead emphasized that the ‘international community’
forced Beijing to change its positioning on the AIIB (Yun,
2015). According to Thomas Schelling’s theory of credible
commitment, if one actor in a negotiation can constrain
itself, for example, by narrowing options, its commitment
will be more credible (Schelling, 1960). Schelling’s theory
can be applied to the negotiations over the AIIB Articles of
Agreement, especially the negotiations with the European
nations, when China made several concessions to constrain
its power in exchange for the European governments to
agree to join. In constraining itself, Beijing also helped to
foster the multilateral credibility and legitimacy of the new
Bank. For example, on China’s quota share and voting share,
certain European representatives voiced the view that China
really needed to give up the veto in order for the Bank to
be taken seriously as a multilateral development bank (Wei
& Davis, 2015). In response, and enshrined in the Articles of
Agreement, China agreed to reduce its quota share to 30.34
per cent, and a voting share of 26.06 per cent. Skeptics and
critics then highlight that even with its reduced quota and
voting shares, China still retains a veto on the major strate-
gic decisions of the Bank. However, what has been missed
or ignored in the published analysis is that China did also
agree, verbally, to give up its veto power, ‘gradually’, within
the AIIB. On 29 June 2014, Chinese Finance Minister Lou
Jiwei is quoted saying that China’s quota could have been
more than 50 per cent, in that China was willing, and that
such as a large financial contribution was not a sign of Chi-
na’s desire to dominate the new Bank, but a reflection of
China’s determination to establish the Bank. However, he
then stated that if more countries were willing to join,
including the US and Japan, then China would reduce its
quota and voting shares accordingly, including below the
level of the veto.3 Beijing actually offered a political compro-
mise of sorts: on one hand, China still retains the veto dur-
ing the formative stage of the Bank’s operation; and on the
other hand, China has offered to give up the veto when
more new members join the bank by introducing a ‘fixed’
special majority, comprising two-thirds of the number of
members and representing three-quarters of the voting
power.4 In contrast, the United States has maintained its
veto power in the World Bank by amending the articles of
agreement. This increased the special majority needed to
override the US veto even when the voting power of the US
was reduced after new members were added (Fu, 2016).
On governance structure, initially the Chinese design was
for the Board of Directors (BoD) to supervise the manage-
ment and the operation of the Bank on a regular basis, but
for the BoD to be non-resident. The Chinese had made the
observation from the experience of many existing MDBs that
when Directors are full-time resident, it can lead to problems
of duplication of oversight and unclear division of authority
between the management team and the Board, with the
Board members wanting to make policy and approve pro-
jects. The Chinese emphasized that accountability on Board
decisions was not straight-forward when Board members
made mistakes with their decisions. As such, China initially
© 2019 University of Durham and John Wiley & Sons, Ltd.
 Jiejin Zhu
656
proposed to increase the accountability of the management
team, especially for the Bank’s operations, and to reduce ‘un-
necessary interference’ by the BoD on the Bank’s operations.
However, the Europeans were concerned that a non-resident
Board would be unable to truly supervise the management
team; and the related concern was that the Board members
would not be able to supervise the senior management of
the Bank which would be headed by a Chinese national. The
not so hidden concern was that of excessive Chinese govern-
ment influence of the Bank’s senior management.
In the course of these governance negotiations, the main
negotiating parties made concessions: on one hand, it was
agreed that the BoD would be non-resident and responsible
for supervising and overseeing the general operations of the
Bank, but the Board would delegate project approval power
to the senior management on projects inside the Asian
region; on the other hand, it was agreed that the BoD
would supervise the Bank’s management by establishing the
‘Compliance, Effectiveness and Integrity Unit’, as a unit to
evaluate the management, but that is separate and inde-
pendent from the management team, and reports directly
to the BoD. China further agreed that on investment deci-
sion-making, the AIIB president would work through the
Executive Committee and an Investment Committee. In the
AIIB project approval process, for projects in Asia, if a pro-
posal passes the initial project identification and due dili-
gence assessment process conducted by the Project Team
and by the risk and sector professionals, the Executive Com-
mittee discusses whether the project meets the basic
screening criteria of the Bank, and then the Investment
Committee does the final review of the project proposal, for
due diligence, and project viability. Although the President
chairs the two Committees, decision-making on projects
assessments is by consensus, which means the president
alone cannot make the decision. If the proposed project is
outside of the Asia region, but has links to the region, the
final decision is made by the BoD.
For the Europeans and the other Bank members, it was
very important that these negotiations were multilateral.
Equally important for the Europeans, China supported the
legal codification of the multilaterally-negotiated rules, terms
and conditions for the Bank, which took the form of a legal
Charter for the new Bank, and precise ‘Articles of Agree-
ment’ (see the Lichtenstein essay in this collection). These
multilateral negotiations, their successful conclusion, and the
legal codification of the agreements, helped to secure the
dramatic increase in the AIIB’s membership, especially the
addition of the key non-regional members in Europe.
AIIB President Jin Liqun has stated that, in the process of
setting up the AIIB, both China and the AIIB have gained
international credibility, and built mutual trust through col-
lective consultation, and by making decisions through
clearly defined and democratic procedures (Fu, 2016). In
brief, the multilateral negotiations of the rules, terms and
conditions, and structure of the AIIB, their codification in the
Articles of Agreement, helped to build the AIIB’s interna-
tional credibility as a multilateral development bank, and
the beginnings of the multilateral culture of the Bank.
© 2019 University of Durham and John Wiley & Sons, Ltd.
Multilateral partnering
A second dimension of China’s support for the multilateral-
ization of the AIIB is its support to the Bank to join the so-
called ‘family’ of MDBs, specifically by supporting the AIIB to
work with other MDBs on the big infrastructure projects,
including the World Bank Group, Asian Development Bank,
European Investment Bank, and European Bank for Recon-
struction and Development, to co-finance large-scale infras-
tructure projects.
On 13 April 2016, AIIB and World Bank signed a co-financ-
ing framework, outlining the co-financing parameters of
AIIB-World Bank investment projects. Under the agreement,
the World Bank agreed to prepare and supervise the co-fi-
nanced projects in accordance with its own policies and
procedures in areas like procurement, environment and
social safeguards.5 In June 2016, the AIIB announced it
would invest in the Indonesia National Slum Upgrading pro-
ject, co-financed with International Bank for Reconstruction
and Development (IBRD)/World Bank (WB), with each Bank
respectively contributing US$216.5 million. The AIIB agreed
that the WB would administer the loan, and that the entire
project would be implemented according to the WB’s envi-
ronmental and social compliance and project monitoring
and reporting procedures. Procurement would also be con-
ducted in accordance with the WB’s Procurement and Con-
sultant Guidelines (dated January 2011, and revised July
2014). The AIIB accepted the WB’s ESSP, to quote the AIIB
project document: (i) ‘they are consistent with AIIB’s Articles
of Agreement and materially consistent with the provisions
of AIIB’s Environmental and Social Policy and relevant Envi-
ronmental and Social Standards’; and (ii) ‘the monitoring
procedures that WB has in place to ascertain compliance
with WB ESSP are appropriate for the project’ (AIIB, 2016a).
On 2 May 2016, AIIB signed an MOU with ADB, setting the
stage for jointly financing projects. The two banks agreed to
strengthen project co-financing cooperation, including
energy, transportation, telecommunications, rural and agri-
culture development.6 Also announced in June 2016, Pak-
istan National Motorway M-4 (Shorkot-Khanewal Section)
Project was the first co-financed project between the AIIB,
ADB, and the Department for International Development
(DfID) of the UK. The AIIB and ADB each contributed US$
100 million, and the DFID US$34 million. The AIIB agreed
that the project would use ADB’s safeguard policy statement
(2009) (ADB SPS). To quote the AIIB project document, the
AIIB also agreed to use ADB’s standards, as they are: (i) ‘con-
sistent with the AIIB’s Articles of Agreement, and materially
consistent with the provisions of the AIIB’s Environmental
and Social Policy and relevant Environmental and Social
Standards’; and (ii) because the ‘monitoring procedures that
ADB has in place to ascertain compliance with the ADB SPS
are appropriate for the project’ (AIIB, 2016b).
On 11 May 2016, AIIB also signed a MOU with the Euro-
pean Bank for Reconstruction and Development (EBRD),
which set out a framework for strategic and operational
cooperation in joint infrastructure projects in Central Asia.7
AIIB approved a loan of US$ 27.5 million for Dushanme-
Global Policy (2019) 10:4
 China’s Evolving Multilateralism
Uzbekistan Border Improvement Project on 24 June 2016.
The project was co-financed with the EBRD, which con-
tributed US$ 62.5 million, for a project with a total cost of
US$ 105.9 million. The AIIB agreed that the project would
use the EBRD’s Environmental and Social Policy (2008) (EBRD
ESP) and the EBRD’s procurement policy and procedures
(AIIB, 2016c). By the end of 2018, AIIB had approved 35 pro-
jects for infrastructure, of which 21 projects are co-financed
with the World Bank, Asian Development Bank, and the
European Investment Bank and European Bank for Recon-
struction and Development – or what amounts to about 60
per cent of the AIIB’s project investment up to that point in
time.8 Most importantly, co-financing means not only the
joining of money between the banks but also potentially
the AIIB’s internalization of the policy and standards of the
established MDBs. Drawing from sociology, one could
hypothesize that the AIIB has been undergoing processes of
‘socialization’, in other words, internalizing the norms and
ideologies of the existing MDBs. Whether such socialization
of the AIIB is happening, and if so, to what degree, would
be an important area of future research, as it would tell us
whether the AIIB has mainly been engaging in socialization,
and potentially at the cost of pursuing innovation and new
ways of doing things. The decision of the AIIB to accept the
standards of the established MDB, when co-financing pro-
jects together, would only be the first step in such a social-
ization process. The key next question or issue for inquiry is
whether the AIIB uses the ESSs of the World Bank Group,
the ADB, the EBRD, and other MDBs for its own (AIIB) solely-
financed projects, or whether or the degree to which the
AIIB develops and institutionalizes its own ESSs for its own
projects.
New multilateral platform
A third dimension China’s support for the multilateralization
of the AIIB, and one that is also related to the second
dimension of the AIIB joining the family of MDBs, is Beijing’s
support for the AIIB to be included in a newly created multi-
lateral platform, the ‘Multilateral Cooperation Center for
Development Finance’ (MCDF; see the Chin Introduction
essay for this collection).
In April 2019, at the Second Belt & Road Forum, in the
outskirts of Beijing, a group of eight MDBs and China’s Min-
istry of Finance agreed to commence with the creation of
the MCDF, and the AIIB is one of the core member institu-
tions. According to the MOU, signed in March 2019, the
MCDF is intended to promote collective infrastructure
investment, from this MDB grouping, as well as facilitate the
exchange of information among its members, strengthen
the institutional capacity of developing countries to control
their investment climate and improve the transparency of
their debt management and project preparation. The Chi-
nese government wants the MCDF to support the BRI. For
example, Zhang Wencai, director general of the Department
of International Economic and Financial Cooperation at Chi-
na’s Ministry of Finance, stated that the purpose of the
MCDF is to ‘organize the eight MDBs and other international
Global Policy (2019) 10:4
657
development partners to support the BRI, including informa-
tion sharing, capacity building and project preparation’
(Zhang, 2019).
The 2019 MDCF MOU actually builds on an earlier MOU in
May 2017 between China’s finance ministry and six MDBs,
the WB, ADB, European Investment Bank, EBRD, AIIB and
New Development Bank, to consideration their collective
cooperation on ‘shared interests’ under the BRI. It can fur-
ther be said that the MCDF agreements have built on even
earlier commitments, in 2016, at the G20 Leaders Summit in
Hangzhou, China, at which Chinese officials used their host
presidency of the summit to encourage more internation-
ally-shared investment in the Global Infrastructure Connec-
tivity Alliance (GICA), which is led by the World Bank Group,
and has China as a major donor (Chin and Dobson, 2015).
At those meetings in Hangzhou, China pushed 11 MDBs,
including the AIIB to give more investment support to
infrastructure.9
At the fourth AIIB annual meeting, in July 2019, in Luxem-
bourg, Liu Kun, Chinese finance minister, said that the AIIB
‘should actively join the MCDF’, and play a key role in sup-
porting the EU-China strategy of ‘connecting Europe and
Asia’ and the BRI.10 This dual agenda suggests that the Chi-
nese finance ministry is treating the AIIB as one of its inter-
national development partners, rather than merely as an
international financial institution which it directly controls.
Skeptics argue, however, that these multilateral diplomatic
gestures are largely about China wanting to avoid the per-
ception that the AIIB is a tool of the BRI, and Beijing used a
global forum, the G20, to push a global message, which also
encompassed what it was suggesting that the AIIB should
do. The BRI, and its relationship with the AIIB, is an optimal
test case for whether the AIIB is a China-controlled bank.
Raffaello Pantucci, a Researcher at Royal United Services
Institute, argues that the AIIB is a tool of the BRI – and by
extension, a tool of the Chinese government – rather than a
multilateral development financing institution, that pursues
a collective or common purpose, because 75 per cent of the
AIIB’s first projects are devoted to countries along the BRI
routes (Pantucci, 2016).
In reality, there is overlap between the AIIB and BRI, but it
is not accurate to call the AIIB the BRI Bank. Jin Liqun, the
AIIB president, has acknowledged that the AIIB and the BRI
were both initiated by China, and at about the same time
period, and they share similar purposes; however, Jin
emphasizes that they are ‘distinct and separate entities. As a
high-standard international organization, AIIB has its own
standards in choosing the projects, including the debt sus-
tainability, environmental protection and local people sup-
port’ (Jin, 2019). Joachim von Amsberg, AIIB vice president,
further explained the connection and difference between
AIIB and BRI, ‘if a project comes to you and it is Belt and
Road Initiative, are you going to invest it? Well, we could,
but just because it is BRI doesn’t mean we will’ (Amsberg,
2017).
Chinese officials are also aware that the AIIB must demon-
strate that it has policy and operational autonomy, and that
it is not a tool of the BRI. For now, it is possible to say that
© 2019 University of Durham and John Wiley & Sons, Ltd.
 Jiejin Zhu
658
the decision to create the MCDF was only announced
recently, in July 2019, and that the MCDF remains more of a
promise than a reality – and the exact relationship between
the MCDF and the BRI is still to be defined. Nonetheless, the
decision to commence with creating the MCDF is suggestive
of multilateral intentions, as is Beijing’s support for the AIIB
to be a member of the MCDF. Only time and actions will
truly tell whether Beijing will restrain its power and influ-
ence in relation to the MCDF and the AIIB, including with
respect to BRI projects.
Conclusions
Compared with other China-backed international initiatives,
such as the BRI, the AIIB has developed or gained a fairly
high level of international credibility, as a multilateral organi-
zation, and sooner than many observers predicted. It has
been suggested that a key factor in this legitimization pro-
cess is that China has restrained itself from intervening uni-
laterally in its dealings with the AIIB, and has supported the
multilateralization of the AIIB, during the negotiations for
the creation of the Bank, and after the AIIB commenced
operation. Chinese authorities, particularly from the Ministry
of Finance, are supporting the AIIB in joining the ‘family’ of
MDBs, by developing a significant portion of the Bank’s new
portfolio of investment and lending through co-financing
partnerships with existing MDBs, and by joining the MCDF.
It is further suggested here that China’s relations with the
AIIB are a good case study for examining how China is
translating its material capabilities as a rising power into
multilateral public goods. This process of transfer of power
and influence is crucial to China’s evolution as a responsible
stakeholder, rather than as a threat (revisionist power). But
the case of the AIIB also highlights a particular dilemma for
China and for the AIIB. To the extent that the AIIB has been
undergoing socialization into existing MDB norms and stan-
dards, in order to build its international credibility and legiti-
macy as an MDB, it has also been somewhat overlooked
that, as a new MDB initiated by an emerging economy,
namely, China, the AIIB actually has two mandates: the first
is to improve infrastructure connectivity in Asia, and the sec-
ond is to push the reform of the international financial and
economic system. Joining with other MDBs to co-finance
infrastructure projects supports the first mandate, but it is
questionable whether it supports the latter. For the AIIB,
joining with other MDBs to co-finance projects, or acting as
part of the MCDF, has allowed it to gain international legiti-
macy and multilateral credibility, quite rapidly. However,
there may be a cost: that such partnering with other MDBs
has potentially decreased the AIIB’s pursuit of innovation, or
disincentivized it to develop new ways of doing things,
especially to experiment with means and ways that are dif-
ferent and potentially better from the established patterns.
Future research should examine whether, or to what degree,
and in what ways, the AIIB is facing such a dilemma, of trad-
ing-off between gaining legitimacy through socialization
into existing MDB norms and standards versus pursuing
innovation and new ways of doing things.
© 2019 University of Durham and John Wiley & Sons, Ltd.
Data availability statement
I confirm that my article contains a Data Availability State-
ment even if no data is available (list of sample statements)
unless my article type does not require one.
Notes
1. Jin Liqun is quoted in James Kynge, ‘AIIB Chief Unveils Aim to Rival
Lenders such as ADB and World Bank’, Financial Times, 4 May 2017
[online]. Available from: https://www.ft.com/content/3a938ee4-0288-
11e7-aa5b-6bb07f5c8e12 [Accessed 20 August 2019]
2. ‘China Proposes an Asian Infrastructure Investment Bank’, China
Daily, 3 October 2013 [online]. Available from: http://www.chinada
ily.com.cn/china/2013-10/03/content_17007977.htm [Accessed 26
August 2019]
3. ‘Lou Jiwei responds to reporter’s questions on AIIB preparations’
[online]. Available from: https://www.mof.gov.cn/mofhome/guojisi/
pindaoliebiao/gongzuodongtai/201406/t20140630_1106322.html
[Accessed 20 August 2019]
4. AIIB, Articles of Agreement, Article 28, Clause 2(ii) [online]. Available
from: https://www.aiib.org/en/about-aiib/basic-documents/_download/
articles-of-agreement/basic_document_english-bank_articles_of_agree
ment.pdf [Accessed 26 August 2019]
5. ‘World Bank and AIIB Sign First Co-Financing Framework Agreement’,
13 April 2016 [online]. Available from: https://www.worldbank.org/en/
news/press-release/2016/04/13/world-bank-and-aiib-sign-first-co-financ
ing-framework-agreement [Accessed 16 September 2019]
6. ‘ADB, AIIB Sign MOU to Strengthen Cooperation for Sustainable
Growth’, 2 May 2016 [online]. Available from: https://www.adb.org/
news/adb-aiib-sign-mou-strengthen-cooperation-sustainable-growth
[Accessed 16 September 2019]
7. ‘EBRD to Cooperate with Beijing-Based Asian Infrastructure Investment
Bank’, 11 May 2016 [online]. Available from: https://www.ebrd.com/ne
ws/2016/ebrd-to-cooperate-with-beijingbased-asian-infrastructure-inve
stment-bank.html [Accessed 20 September 2019]
8. ‘Approved Projects’ [online]. Available from: https://www.aiib.org/en/
projects/approved/index.html [Accessed 28 August 2019]
9. ‘G20 Leaders’ Communique: Hangzhou Summit’, 5 September 2016
[online]. Available from: http://www.g20.utoronto.ca/2016/160905-
communique.html [Accessed 20 September 2019]
10. ‘AIIB Fourth Annual Meeting was held in Luxembourg’, 13 July 2019
[online]. Available from: http://www.mof.gov.cn/zhengwuxinxi/caizhe
ngxinwen/201907/t20190713_3298573.htm [Accessed 20 September
2019]
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Author Information
Jiejin Zhu is an Associate Professor at the School of International Rela-
tions and Public Affairs, Fudan University. His research focuses mainly
on international organization and global governance, especially China’s
relations with international and regional organizations. He is finishing a
book manuscript on China’s Rise and International Institutional Change.
© 2019 University of Durham and John Wiley & Sons, Ltd.