Beijing’s AIIB starts operations

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Beijing’s AIIB starts operations

The China-led Asia Infrastructure Investment Bank (AIIB) was officially launched with Korea as its fifth largest stakeholder.

The AIIB held an opening ceremony and its first general assembly in Beijing on Saturday.

The institution plans to finance 10 projects at the maximum and lend $1.2 billion this year. Annual lending will be expanded to $3.5 billion by 2018. The first project of AIIB will be determined in the latter half of this year.

Seoul became a founding member of the AIIB in June along with 56 other countries.

It was awarded a 3.81 percent stake in the new institution, which is expected to challenge U.S.-led financial institutions like the World Bank. Following China, India, Russia and Germany, Korea’s stake in the AIIB is the largest of any global financial institution in which Korea is a member.

Since Korea is the fifth-largest stakeholder, there are expectations that a Korean figure could take one of the five vice president positions.

In a closed-door meeting with Jin Liqun, president of the AIIB, Korean Finance Minister Yoo Il-ho made a request for support for the nomination of a Korean vice president, the Finance Ministry said in a press release on Sunday.

AIIB plans to appoint five vice presidents through an electronic election in mid-February.

On Saturday, the 57 member countries elected 11 executive directors. Song In-chang, director general of international financial policy at the Finance Ministry, was one of the elected executive directors.

Yoo highlighted the importance of the institution at the opening ceremony in Beijing and said that Korean businesses will get a number of opportunities across the region as the AIIB starts its operations.

“The AIIB will help independent and sustainable growth of Asia by providing financial resources for major investment projects in the region,” Yoo said. “If Asia can continue steady growth, it will account for over 50 percent of the world’s total GDP by 2050.”

“I hope AIIB plays a significant role in helping countries with underdeveloped financial markets,” he added.

One of major projects planned by AIIB is to build a new silk road connecting China with the world, known as the One Belt, One Road project or the Silk Road Economic Belt and the 21st-century Maritime Silk Road. It is the biggest project proposed by China.

BY SONG SU-HYUN [song.suhyun@joongang.co.kr]

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