The president of the Beijing-based Asian Infrastructure Investment Bank is urging Canadian companies to bid on its growing list of big projects and vows that the two-year-old institution will prove it is independent from the Chinese government.
Jin Liqun said Canada and the 83 other countries that are bank shareholders play a role in establishing clear rules so that decisions are based on merit. He spoke with The Globe and Mail on Tuesday in Ottawa during a brief visit to Canada, which included a meeting with Finance Minister Bill Morneau.
“This is an international institution and China, as the biggest shareholder, has a huge stake in maintaining the international, multilateral feature of this institution,” Mr. Jin said. “I’ve never, ever come under any pressure [from the Chinese government].”
China’s decision to create a new international development bank received a cool reception from the United States – which plays a leading role at the World Bank – and Japan – which provides similar leadership for the Asian Development Bank. Both countries are not members of the Beijing-based AIIB.
Mr. Jin said the bank does not have a policy of giving preferential treatment to companies from member countries.
“However, if the two companies are about the same in terms of their competitiveness, certainly the priority should be given to the companies of the member country,” he said, urging Canadian firms to keep an eye on the bank’s projects.
The AIIB has approved 25 projects to date, including one project in China to replace coal-fired power plants. India has so far been the largest beneficiary, securing financing for a metro rail project, an electricity transmission system and a rural roads project.
Ottawa has parliamentary approval to contribute up to US$375-million toward the bank. It has also pledged US$796-million in the event that the bank faced serious financial difficulties. Canada has never faced such a scenario in its roughly eight decades of participation with other development banks.
During this year’s budget debate in Parliament, Conservative Leader Andrew Scheer singled out Canada’s participation in the AIIB as a source of unnecessary spending and said Canadians would prefer to see those dollars spent at home.
Mr. Jin’s response is that Canadians have long supported institutions such as the World Bank that help other countries develop and the AIIB should be viewed in the same light.
“The general public of your country understands how important it is for Canada, as on open country, to maintain very good relationships with other countries,” he said.
Mr. Jin’s career has focused on international infrastructure projects, including in previous roles as chairman of China International Capital Corp., chairman of the International Forum of Sovereign Wealth Funds and senior positions with the Asian Development Bank, the World Bank and China’s Ministry of Finance.
Prime Minister Justin Trudeau’s government has made a point of seeking out large institutional investors, including global pension funds, as potential investors in Canadian infrastructure projects. The government has established a $35-billion Canada Infrastructure Bank, which has not yet approved any projects.
While the AIIB is focused on projects in Asia, Mr. Jin said his many contacts could be of use to the Canada Infrastructure Bank and there are opportunities to share expertise.
A challenge for Mr. Jin is separating the activities of the bank – which has largely avoided controversy so far – with some of the more contentious trade-corridor projects that are currently being advanced by the Chinese government under a policy called One Belt One Road.
One widely published commentary by Brahma Chellaney, a professor at the New Delhi-based Centre for Policy Research, described China’s infrastructure ambitions as “creditor imperialism,” pointing to Sri Lanka’s decision to hand control of a key port to a Chinese company in exchange for debt relief.
Mr. Jin said the AIIB makes its decisions independently of China’s One Belt One Road initiative.
Wendy Dobson, a professor and co-director of the Rotman Institute for International Business at the University of Toronto, said Mr. Jin has a “sterling reputation” and the AIIB is off to a good start by working closely with other international development banks.
“We should support a new international organization that is truly multilateral, which AIIB seems to be, and inclusive, which it also seems to be,” she said.