When China wanted to set up its answer to the World Bank, it picked Jin Liqun—a veteran financier with experience at the World Bank, the Asian Development Bank, China’s ministry of finance and the China Investment Corporation, the country’s sovereign wealth fund—to design it. Since 2014, Jin has been the force behind the Asian Infrastructure Investment Bank, including a decade as its first president, starting in 2016.
Jin’s decade-long tenure comes to an end on January 16, when he will hand over the president’s chair to Zou Jiayi, a former vice minister of finance. When Jin took over the AIIB ten years ago, the world was still mostly on a path to further globalization and economic integration, and the U.S. and China were competitors, not rivals. The world is different now: Protectionism is back, countries are ditching multilateralism, and the U.S. and China are at loggerheads.
The AIIB has largely managed to keep its over-100 members, which includes many countries that are either close allies to the U.S.—like Germany, France and the U.K.—or have longstanding tensions with Beijing, like India and the Philippines.
But can the AIIB—which boasts China as its largest shareholder, and is closely tied to Beijing’s drive to be seen as a “responsible stakeholder”—remain neutral in a more polarized international environment? And can multilateralism survive with an “America First” administration in Washington?
After his decades working for multilateral organizations—the World Bank, the ADB, and now the AIIB—Jin remains a fan of multilateralism and is bullish on the prospects for global governance.
“I find it very hard to understand that you can go alone,” Jin tells Fortune in an interview. “If one of those countries is going to work with China, and then China would have negotiations with this country on trade, cross-border investment, and so on—how can they negotiate something without understanding the basics, without following the generally accepted rules?”
“Multilateralism is something you could never escape.”
Why did China set up the AIIB?
Beijing set up the Asian Infrastructure Investment Bank almost a decade ago, on Jan. 16, 2016. The bank grew from the aftermath of the Global Financial Crisis, when Chinese officials considered how best to use the country’s growing foreign exchange reserves. Beijing was also grumbling about its perceived lack of influence in major global economic institutions, like the International Monetary Fund and the World Bank, despite becoming one of the world’s most important economies.
With $66 billion in assets (according to its most recent financial statements), the Asian Infrastructure Investment Bank is smaller than its U.S.-led peers, the World Bank (with $411 billion in assets) and the Asian Development Bank (with $130 billion). But the AIIB was designed to be China’s first to design its own institutions for global governance and mark its name as a leader in development finance.
Negotiations to establish the bank started in earnest in 2014, as several Asian economies like India and Indonesia chose to join the new institution as members. Then, in early 2015, the U.K. made the shocking decision to join the AIIB as well; several other Western countries, like France, Germany, Australia, and Canada, followed suit.
Two major economies stood out in abstaining. The U.S., then under the Obama administration, chose not to join the AIIB, citing concerns about its ability to meet “high standards” around governance and environmental safeguards. Japan, the U.S.’s closest security ally in East Asia, also declined, ostensibly due to concerns about human rights, environmental protection, and debt.
“They chose not to join, but we don’t mind.” Jin says. “We still keep a very close working relationship with U.S. financial institutions and regulatory bodies, as well as Japanese companies.” He sees this relationship as proof of the AIIB’s neutral and apolitical nature.
Still, Beijing set up the AIIB after years of being lobbied by U.S. officials to become a “responsible stakeholder,” when then-U.S. Secretary of State Robert Zoellick defined in 2005 as countries that “recognize that the international system sustains their peaceful prosperity, so they work to sustain that system.”
Two decades later, U.S. officials see China’s presence in global governance as a threat, fearing that Beijing is now trying to twist international institutions to suit its own interests.
Jin shrugs off these criticisms. “China is now, I think, the No. 2 contributor to the United Nations, and one of the biggest contributors to the World Bank and the Asian Development Bank” (ADB), Jin says. “Yet the per capita GDP for China is still quite lower than a number of countries. That, in my view, is an indication of its assumption of responsibility.”
And now, with several countries withdrawing from global governance, Jin thinks those lecturing China on being responsible are being hypocritical. “When anybody tells someone else ‘you should be a responsible member’, you should ask yourself whether I am, myself, a responsible man. You can’t say, ‘you’ve got to be a good guy.’ Do you think you are a good guy yourself?” he says, chuckling.
Why does China care about infrastructure?
From its inception, Beijing tried to differentiate the AIIB from the World Bank and the ADB through its focus on infrastructure. Jin credits infrastructure investment for laying part of the groundwork for China’s later economic boom.
“In 1980, China didn’t have any expressways, no electrified railways, no modern airports, nothing in terms of so-called modern infrastructure,” Jin says. “Yet by 1995, China’s economy started to take off. From 1995, other sectors—manufacturing, processing—mushroomed because of basic infrastructure.”
Still, Jin doesn’t see the AIIB as a competitor to the World Bank and the ADB, saying he’s “deeply attached” to both banks due to his time serving in both. “Those two institutions have been tremendous for Asian countries and many others around the world. But time moves forward, and we need something new to deal with new challenges, do projects more cost-effectively, and be more responsive.”
Jin is particularly eager to defend one particular institutional choice: the AIIB’s decision to have a non-resident board, with directors who don’t reside in the bank’s headquarters of Beijing. (Commentators, at the time of the bank’s inception, were concerned that a non-resident board would reduce transparency, and limit the ability of board directors to stay informed.)
“In order for management to be held accountable, in order for the board to have the real authoritative power to supervise and guide the management, the board should be hands-off. If the board makes decisions on policies and approves specific projects, the management will have no responsibility,” he says.
Jin says it was a lesson learned from the private sector. “The real owners, the board members, understand they should not interfere with the routine management of the institution, because only in so doing can they hold management responsible.”
“If the CEO is doing a good job, they can go on. If they are not doing a good job, kick them out.”
What does Jin Liqun plan to do next?
Jin Liqun was born in 1949, just a few months before the official establishment of the People’s Republic of China. He was sent to the countryside during the Cultural Revolution, and spent a decade first as a farmer, and eventually a teacher. He returned to higher education in 1978, getting a master’s in English Literature from Beijing Foreign Studies University.
From there, he made his way through an array of Chinese and international financial institutions: the World Bank, the Asian Development Bank, China’s Ministry of Finance, the China International Capital Corporation, and, eventually, the China Investment Corporation, the country’s sovereign wealth fund.
In 2014, Jin was put in charge of the body set up to create the AIIB. Then, in 2016, he was elected the AIIB’s first-ever president.
“Geopolitical tensions are just like the wind or the waves on the ocean. They’ll push you a little bit here and there,” Jin says. “But we have to navigate this rough and tumble in a way where we wouldn’t deviate from our neutrality and apolitical nature.”
He admits “the sea was never calm” in his decade in office. U.S. President Donald Trump’s election in 2016 intensified U.S.-China competition, with Washington now seeing China’s involvement in global governance as a threat to U.S. power.
Other countries have also rethought their membership in the AIIB: Canada suspended its membership in 2023 after a former Canadian AIIB director raised allegations of Chinese Communist Party influence among leadership. (The AIIB called the accusations “baseless and disappointing”). China is also the AIIB’s largest shareholder, holding around 26% of voting shares; by comparison, the U.S. holds about 16% of the World Bank’s voting shares.
Still, several countries that have tense relations with China, like India and the Philippines, have maintained their ties with the AIIB. “We managed to overcome a lot of difficulty which arose from disputes between some of our members, and we managed to overcome some difficulty arising from conflicts around the world,” he said.
“Staff of different nationalities did not become enemies because their governments were having problems with each other. We never had this kind of problem.”
Politics8 years ago