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Friday, January 15, 2016, 09:25

Inclusive AIIB to boost sustainable growth

By Zhang Zhouxiang

Asian Infrastructure Investment Bank's opening ceremony will start in Beijing on Jan 16. On the eve of the event, China Daily's Zhang Zhouxiang sought the views of three experts on the AIIB's role in the world financial system and its influence on the global economy. Following are excerpts from the interviews:

The AIIB is both inclusive and open, and a global financial institution that believes in equality. That the Philippines joined the AIIB as a founding member on Dec 30, 2015, before the deadline, conclusively proves the bank is indeed open and inclusive, and it will boost development and cooperation in the region and beyond. It is important to note that the Philippines joined the AIIB despite having a maritime dispute with China.

The bank's openness is also reflected in the flexibility for the countries that have not yet ratified the AIIB agreement. More than 17 countries have ratified the AIIB agreement to become formal members, and one cannot rule out the possibility of some countries quitting the institution for not doing so. The AIIB council, however, could accept them as observers while the bank's board of directors might allow their representatives to attend meetings, and both measures will enable them to be part of the AIIB cooperation mechanism in a certain way.

In other words, the AIIB is open and innovative - very different from the US-led Trans-Pacific Partnership Agreement - and will not exclude members from the trading bloc even if they fail to ratify the agreement before the deadline expires.

Chen Fengying, a senior researcher at the World Economy Research Center, China Institutes of Contemporary International Relations

The AIIB will play a complementary role to the existing global financial institutions such as the World Bank and the Asian Development Bank, and together they can build a dynamic financial system to support global growth. The AIIB will be cooperative in nature, and its focus will be on infrastructure.

Of course, the AIIB will compete with other financial institutions but for the betterment of all economies. For instance, after China initiated the move to establish the AIIB, the World Bank increased its investment in Indonesia and began paying greater attention to Pakistan. No financial institution wants to lag behind when it comes to common efforts, but the AIIB won't compete with the ADB and World Bank to challenge the existing world financial order.

Besides, the AIIB will help emerging markets enjoy greater say in global financial matters by promoting economic cooperation and sustainable growth.

Although the name Asian Infrastructure Investment Bank suggests the bank's focus will be on Asia, its influence will not be limited to Asia. The AIIB will provide a platform for Asian economies and their partners to work with each other and propel the economic integration of Asia and the regions beyond.

Xu Hongcai, director of the Department of Economic Research at the China Center for International Economic Exchanges

Some Western media outlets have compared the AIIB with the US Marshall Plan, which was aimed at the economic revival of Europe after World War II. The comparison was not heard for some time, but it is being used again as the AIIB's opening ceremony approaches.

There are fundamental and obvious differences between the AIIB and the Marshall Plan. The AIIB is a formal international institution comprising 57 members that have vowed to work in a cooperative and democratic way. Also, despite floating and executing the idea of the AIIB, China does not seek dominance over the bank or control over other members. In contrast, the Marshall Plan was dominated by the US, and Western European countries got "help" from it instead of "participating" in it.

Besides, the AIIB will function according to market rules and invest only in programs that have market potential. The AIIB is an open and fair financial institution whereas the Marshall Plan was driven by political interests and imposed strict conditions on the aid-receiving countries.

China has already made it clear that the AIIB will not impose any political conditions on any member. The fact that the Philippines has joined the AIIB in spite of having a maritime dispute with China is the best example of the AIIB's openness and, hence, it is absurd to compare it with the Marshall Plan.

Huang Yiping, a professor of economics at the National School of Development, Peking University.

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