The Asian Infrastructure Investment Bank
Independent Research Project
Jing Jin
8/12/2015
The Asian Infrastructure Investment Bank (AIIB) was proposed by China as an international
financial institution. It focuses on helping developing Asian countries to build infrastructure for
transportation, energy, telecommunications, agriculture and city development. The headquarters
are located on Beijing Financial Street in the Xicheng District, the oldest and biggest traditional
central business district (CBD) for finance. Many international financial companies such as
JPMorgan Chase & Co, Goldman Sachs and the United Bank of Switzerland are located here.
These companies make the CBD international.
There are some similar institutions in the world. Most of them are proposed by government
or private organizations. They provide only funds to some developing countries and focus on
making an economic system for minor developed countries. The IMF, the International Monetary
Fund, is lead by America and the EU. America especially has the veto power and uses this power
to protect the status of the American dollar. For example, there was a reform that would give
some quota to the emerging market and developing countries. (Imf.org 2013) The U.S. Congress
did not approve the IMF reform. (Reuters.com 2014) America has 16.74% voting power.” The
requirement for amendments to the Articles to enter into force is acceptance of at least three-
fifths of member, representing 85 percent of the total voting power.” (imf.org 2013). If America
does not support a reform, this reform can not come true. It shows this organization is not fair to
other countries, and it is working for the interests of minority countries. We have enough reasons
to think that it is possible that their funding support is intentionally selective.
The Chinese government started to establish the Asian Infrastructure Investment Bank in
August 2014. After four rounds of negotiations, 20 countries were willing to become founding
members of the AIIB. The founding members are China, India, Kuwait, Malaysia, the
Philippines, Qatar, Singapore, Thailand and several others.
Georg Inderst and Fiona Stewart said in emerging markets and developing economies, the gap
between infrastructure and economic growth have big influence on economic growth. (Inderst
2014) This means the economical growth is limited by the infrastructure status. In developing
countries, “the figure of $1 trillion USD a year is often quoted as the order of magnitude of
emerging market and developing economies’ infrastructure needs.” (Inderst 2014) According to
the information listed above, there are big gaps in the infrastructure. These gaps are restricting
the economical growth of the developing countries. The Asian economic aggregate is one third of
the global economic aggregate, and it has enormous potential. If the Asian Infrastructure
Investment Bank can be established successfully and can provide monetary support as the
founding members plan, it will affect the railways, roads, bridges, ports, and communication
