Out-Law / Your Daily Need-To-Know

China rules out use of AIIB veto

Out-Law News | 01 Feb 2016 | 5:02 pm |

China has no plans to use its veto power over the newly established Asian Infrastructure Investment Bank (AIIB), and its power to do so will decline as new members join, the bank's president Jin Liqun told China Daily .

The AIIB was announced in Beijing in 2014, with the aim of boosting investment in infrastructure in Asia and was established formally by the 57 member countries signing the Articles of Agreement in June 2015.

China currently has the power to veto decisions, because of its economic size, but "There are still many countries on the waiting list, and when the new members join, China’s voting power will be reduced. Such de facto veto power will be lost gradually," Jin told China Daily.

The AIIB has established a decision making process where a 'special majority' of two thirds of the members have three-quarters of the voting power. As the largest shareholder in the AIIB, China holds 26.06% of the voting power, but "we will not increase the special majority to keep China’s veto power in the future,” Jin said, according to China Daily.

Jin said that this is in contrast to the World Bank, in which the United States has maintained its veto power by amending the articles of agreement.

China is "gaining credibility and building up mutual trust by collective consultation and making decisions on democratic approaches,” Jin told the news site.

Jin said that the AIIB aims to recruit between 100 and 150 professionals worldwide this year, according to China Daily.