China enhances its positions with help of the Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is an international financial institution, which is focused on promoting of financial cooperation in the Asia-Pacific region and on financing of various infrastructure projects in Asia. Foundation of AIIB was initiated by the People's Republic of China, in particular, also for increase of its role in the economic development of this territory.

According to words of the senior officials, AIIB is not treated as a potential rival to the International Monetary Fund (IMF), World Bank (WB) and the Asian Development Bank (ADB). However, low rates of reforms of existing financial organizations, as well as their focus on the USA, Japan and Europe have pushed China into creation of an alternative institution.

As a result of lengthy discussions and negotiations, 57 countries have decided to become the founders of a new bank, and signed a basic document on the establishment of AIIB on June 29, 2015. This document has secured legally the reached agreements, among them: the size of the authorized capital (100 bln $); proportions of countries in the number of votes and shares; management and structure of the bank, decision-making procedures, the fundamental conditions of functioning and operations.

The largest holders of votes and shares has become: China, India and Russia, received 26.06%, 7,5% and 5,92% of votes, respectively.

Because China is the country-founder of AIIB and holder of majority of votes and shares, so the first tasks will be focused on:

• strengthening of China’s position in the international stage and in the economy;
• response to the global influence of the USA;
• occurrence of free-trade zones in the Asia-Pacific region;
• development and construction of infrastructure in Asia, especially in border areas
etc.

Along with that, China does not pretend to priority in AIIB, because the rest 73,94% of votes, distributed among the other countries, give a lot of room for maneuver. In this regard, the principles in the work of the new bank will be significantly different from the work of the IMF and WB, which are controlled by the USA and, accordingly, realize the financial policy of the USA in the world. Moreover, the Asian Development Bank (ADB) operates in Asia, which has similar functions and pursues similar aims as AIIB. However, ADB is under the control of Japan and does not meet the needs of China's implementation of modern politics in the field of economy.

AIIB was initially created as an investment bank of countries of Asian region. The Russian government has decided to enter to the new bank rather recently - in March 2015. This decision was contributed by the growing economic interest of Russia to Asian region. Within realization of the development strategy eastwards the Russian government has already signed with China more than 40 agreements on bilateral cooperation in various fields.

In particular, the Asian Infrastructure Investment Bank may participate in financing of the Russian part of «New Silk Road». And this is thousands of kilometers of high-speed highways and railways, modernization of the Black Sea and Caspian ports and much more.

Taking into account of the large scale of Russian projects with China, as well as the ban of the USA, the EU and a number of countries on credit financing of Russia in the world within sanctions, the participation of the Russian government in AIIB will have a significant geopolitical importance and may well become an effective mutually beneficial cooperation.