China and the financial sector

AIIB-Zentrale, Peking
Foto: AIIB

In January 2016, the Asian Infrastructure Investment Bank (AIIB) became operational in Peking. For the first time, China heads a multilateral bank, in which Western countries such as Germany are also involved. These give the Peking-dominated AIIB international credibility, and also in capital markets. The AIIB stands for China’s growing influence on the global financing of large infrastructure projects. It creates new competition for established finance institutions, especially for the World Bank, dominated by the US.

In the course of the AIIB founding, environmental and human rights groups warned that funded projects’ protection standards could turn out to be too weak. Formulating these environmental and social standards therefore needs to be independently and systematically monitored by civil society. Non-sustainable environmental and socially irresponsible projects must be traced and strategies found for a socially balanced and environmentally sustainable development.

We should also keep Western industrial societies’ responsibility in mind. In January 2019, Germany decided on a closer financial cooperation with China, which included investments within the New Silk Road Initiative and large infrastructure measures. Aim is a better coordination of German and European initiatives with those of China. In this context, Germany promotes China’s admittance as a new state lender to the Paris Club. Civil society must however, also critically accompany these development financings.

Environmental and social standards of the AIIB: room for improvement

Menschenkette um den Globus

In May 2021, the AIIB approved its revised environmental and social standards. The result: good, but not good enough. Our comment:

Most important facts about the AIIB bank

AIIB building
Photo: AIIB
  • Commencement of business: January 2016
  • Biggest shareholders:

  1. China
  2. India
  3. Russia
  4. Germany
  • Startup capital: 100 billion US $
  • Germany participation: 4,2 % share of votes, almost 4,5 billion US $
  • Projects primarily in Southern and Central Asia, Caucasus, European outlying areas
  • Sectors where the AIIB currently invests:
  1. Energy (3,8 billion US $)
  2. Transport sector (3,4 billion $)
  3. Water and irrigation (1,8 billion $)
  4. Infrastructure (1,2 billion $)
  5. Telecommunications (240 million $)
  6. Cross-sectoral (150 million $)
  7. Sanitation (115 million $)

(Source: Coalition for Human Rights in Development, June 2018)

Kontakt

    Bild Anprechpartner   Dr. Nora Sausmikat

    Dr. Nora Sausmikat
    China desk/Campaigns on Multilateral Development Banks
    nora.sausmikat [at] urgewald.org

→  Unser Team