AIIB looks to be efficient, 'green'
Updated: 2015-04-20 05:45
By HUA SHENGDUN in Washington
China's Minister of Finance Lou Jiwei is interviewed by Chinese media while attending the World Bank/IMF Spring meetings in Washington on April 18. CAI CHUNYING / CHINA DAILY
The Asia Infrastructure Investment Bank (AIIB) will strive to be efficient, effective and sustainable, which is a consensus among members, China's Finance Minister said in Washington.
"In many international organizations, it often takes more than three to five years for a project to launch, which we should avoid," Minister Lou Jiwei said during an April 18 interview with major Chinese media organizations, including China Daily.
"We would not bureaucratize the AIIB," Lou said. "Instead, we need to be efficient and 'green'."
Lou is attending the G20 Finance Ministers and Central Bank Governors Meeting during this year's World Bank/IMF Spring meetings, along with Zhou Xiaochuan, governor of the People's Bank of China.
Lou stated that the AIIB would simplify the complicated governance structure that many international organizations are using.
He said the key lies in "the principal-agent relationship between shareholders and managers", in which the governments would be the "shareholders", while "managers" are the appointed president and staff in the new bank.
"The principle above all is that managers should be accountable to shareholders, while shareholders should have restricting power on managers through the board of directors," said Lou, who, before taking the current position in 2013, was chairman and CEO of China Investment Corp, a sovereign wealth fund responsible for managing part of China's foreign exchange reserves.
Lou said that dealing with and gathering many nations in one bank is not necessarily complicated. Members would be divided into two categories: regional members and non-regional members.
The regional members would have 75 percent of capital stock, while non-regional members get the other 25 percent. The allocation among regional members would primarily be based on weighted GDP, with large economies transferring part of their voting power to small economies; non-regional members could decide allocation by themselves, Lou said.
When asked about economic growth in China, Lou said that as long as China's total factor productivity (TFP) increases, its economy would grow more than what the IMF had forecast.
"If major reforms will be continuously put into effect, we can keep the economic growth around 7 percent," Lou said.
The IMF released the World Economic Outlook (WEO) on April 14, forecasting economic growth of 6.8 percent in China this year and 6.3 percent in 2016r.
Lou said many substantial reforms in China are ongoing, such as Hukou reforms, the policy on transfer of management rights of contracted rural lands, and the establishment of Circuit Court, which gives him reasons to be optimistic about the growth of the Chinese economy.
"I am not sure whether the IMF put these reforms into calculation; if so, I am confident that the percentage would be higher," he said.