June 17, 2017 10:17 pm JST

AIIB chief tries to distance bank from Xi Jinping

South Korea's Moon Jae-in suggests the lender invest in North Korea

KIM JAEWON, Nikkei staff writer

Jin Liqun, left, president of the Asian Infrastructure Investment Bank, speaks to reporters in Jeju, South Korea, on June 17.

JEJU, South Korea -- The head of the Asian Infrastructure Investment Bank on Saturday tried to calm worries that the lender will end up acting as an agent in Beijing's ambitious "belt and road" initiative.

Jin Liqun said the Beijing-based multinational development bank has its own governors and standards and is therefore independent of Chinese President Xi Jinping and his agenda to increase the country's influence in the region.

"AIIB is a multinational development bank," Jin told reporters after the bank's second annual meeting here. "Now we have 80 member countries. So we operate by our standards."

He admitted that many countries in the belt and road region have asked for help with their infrastructure projects but that, like any project, they need to meet the bank's investment standards regarding financial sustainability, environmental impact and community support.

Jin, a former vice president at the Asian Development Bank, is a veteran bureaucrat who has spent most of his career at the Chinese Ministry of Finance, including a position as vice finance minister.

His comment came after Japan and the U.S. questioned the bank's autonomy, suspecting it as a vehicle to help China finance belt and road projects. Partly due to these concerns, the two key countries have not contributed to the bank.

It was the AIIB's first annual meeting outside of China. Jin emphasized the bank's achievements, from expanding is membership rolls to increasing its investments.

"We are very pleased to have 80 members at this bank," Jin said. "To date, we have 16 projects [going] with $2.49 billion, including $770 million this year."

Jin was not the only figure who took the spotlight. Moon Jae-in, South Korea's new president, made his diplomatic debut on the international stage.

In his speech on Friday, Moon suggested that a railway be built connecting South and North Korea, stressing the importance of infrastructure in fostering stability and peace.

"When South and North [Korea] are connected with a railway, it will be the perfect completion of the new Silk Road," Moon said. "Moreover, peace on the Korean Peninsula could contribute to the stability and integration of Asia. I hope you pay attention to this."

China envisions its massive belt and road initiative as a modern-day Silk Road -- a series of ports, power plants and transportation lines that will smooth trade between East and West, boosting development along the way.

Moon suggested to Jin that the bank invest in North Korea and elsewhere in Northeast Asia.

"Currently, AIIB projects are done mainly in Southeast Asia and the Southwest Asian region," Moon was quoted as saying by spokesman Park Soo-hyun. "But there is much room [for similar projects] in Northeast Asia, such as Mongolia, three northeastern provinces in China and North Korea."

During his press conference, though, the AIIB chief made it clear he does not consider North Korea as a candidate for funding because, he said, its financing is meant to be carried out in member nations. Still, he did not rule out the possibility that the bank will finance projects in the country -- if the governors approve funds for a non-member country.

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