China expected to hold veto power in AIIB
China is expected to hold veto power over important decisions at the Asian Infrastructure Investment Bank (AIIB), according to Caixin.
The current structure of the bank will likely give China 26% of the voting rights, a person with knowledge of the matter told the Chinese news service. The source added that “China was not seeking veto power and was willing to reduce its voting rights to less than one-quarter if countries such as Japan and the US wanted to join.”
The AIIB is a multilateral investment institution proposed by China to support infrastructure development in Asia. It has 57 founding countries and plans to start with registered capital of $100 billion. China is expected to contribute $29.8 billion, more than the combined investment of India, Russia, South Korea and Australia, reported The Wall Street Journal.
The secretariat in charge of preparing for the establishment of the AIIB declined to comment, reported Caixin.
“Michael Clauss, Germany’s ambassador to China, said a 26% stake will give China veto power over important decisions that require a “super majority” of at least 75% of votes and approval of two-thirds of all member countries. But using the power will be against China’s interests, he said,” according to Caixin.
Germany is the biggest non-Asian contributor of capital. It’s expected to take a 4.1% stake with an initial investment of $900 million, and another $3.6 billion contributed through 2019.
The AIIB’s articles of incorporation are expected to be signed in Beijing next week by representatives from the founding countries. The bank is expected to open by the end of the year.