Controlling Interest

 

According to the articles of association of the Asian Infrastructure Investment Bank (AIIB), China is expected to have a 27 to 30 percent share in the AIIB, by shouldering 29.78 percent of the US$100 billion initial capital.

Korea’s investment is estimated at US$3.7 billion, second only to that of China, India, Russia, and Germany. Non-Asian countries are scheduled to bear 25 percent of the initial capital, and the share ratios associated with final decision-making are to be calculated again in view of the member countries’ economic scales and investments.

China’s share ratio falls short of its previous goal by a margin of approximately 20 percent. Still, it is expected that China will be able to exercise its veto with regards to major issues such as the structure of the bank, membership criteria, and capital increase because the articles of association, which are predicted to be finalized before the end of this month, stipulate an approval by at least 75 percent for such agenda items.

It is said that countries are mulling over the introduction of a fast-track loan as a specific measure for timely decision-making. The permission and size of the fast-track loan can be determined based on the competent director’s on-site examination, even before the board of directors’ approval.

In the meantime, Japan is still trying to keep the AIIB in check. Prime Minister Shinzo Abe mentioned corruption in China as an obstacle to the bank at the G7 meeting in Germany. “The Japanese government repeatedly asked for data related to the fiscal transparency of the AIIB, but the Chinese government has yet to disclose it,” the Ministry of Foreign Affairs of Japan continued, adding that China’s honesty is one of the factors that matter most.

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