No plans for AIIB branches abroad, says Chinese official

China has made it clear that the Asian Infrastructure Investment Bank (AIIB) will have “fewer” Vice-Presidents and may set up regional offices abroad but it will not have branches.

The AIIB is the first Asian bank to have a new banking system that is independent of the dominance of founding member-states of the international Bretton Woods system. Its founding members include India, Brazil, Britain and Australia.

A senior expert on AIIB at the Ministry of Finance (MOF) dismissed a media report that its team will have one President and 10 vice-presidents.

A report in the China Economic Weekly magazine said that AIIB founding members are considering setting up two branch offices — one in Europe and the other in Asia.

However, Zhou Qiangwu, chief of the Asia-Pacific Finance and Development Centre, said the report was not accurate.

Zhou’s office, a think-tank on international economics, is an affiliated agency under the MOF.

“There are no plans at present to set up branches, just a headquarters in Beijing. There might be some regional offices in the future, if such a need was agreed upon by all members,” Zhou told state-run Global Times yesterday.

As for the arrangement of AIIB senior management, Zhou said there will be one President, but it is unlikely to have as many as 10 vice-presidents.

“Things have been complicated as a large number of countries have pledged participation. This was unexpected,” Yuan Gangming, a researcher at Tsinghua University’s Center for China in the World Economy, told the Global Times.

“There is no doubt that the President of the AIIB will be Chinese rather than Indian, since China has taken the greatest risks and responsibilities in the foundation and development of the AIIB,” Yuan said.

Officials say the formula considered among shareholders for various posts is 50 per cent GDP and 50 per cent Purchasing Power Parity (PPP). Under this China and India could get top posts.

Chief negotiators of all the 57-member countries met here last month to discuss the format and functioning rules of the bank. Another meeting will be held in Singapore in late May.

China’s Vice Finance Minister Shi Yaobin said a draft agreement for the AIIB has been under discussion by all the prospective founding members.

The draft is expected to be agreed upon by late May, and in June it will be submitted to the AIIB members for approval.

The AIIB will officially be launched somewhere between the end of 2015 and early 2016, Zhou said.