The Crucial Role of AIIB

As a multilateral financial institution proposed by China， the Asian Infrastructure Investment Bank （AIIB）， inaugurated in Beijing on January 16， represents an important contribution the country has made to the development of the world. Its inauguration also indicates that China is playing an increasingly prominent role in international governance.

The AIIB will bring benefits on three fronts：

First， it will fund infrastructure construction to improve connectivity in Asia in order to promote regional social and economic development. Weak infrastructure has always been a drag on economic growth in Asia. The Asian Development Bank （ADB） estimates that from 2015 to 2020， developing countries in Asia will need an investment of $730 billion for infrastructure construction every year. Nevertheless， previously established multilateral development banks including the ADB invest no more than $20 billion in the region annually. To fill this gap， the AIIB will mobilize more government funding and social capital to support infrastructure construction in Asia and promote sustainable development.

Second， the AIIB is not a replacement of the current international financial system， but rather a complement to it. The bank will make up for the shortcomings of the system and help promote global economic recovery and growth. It will help make the global economic governance system more just， equitable and effective， thus contributing to the prosperity of Asia and the rest of the world.

Third， the AIIB will promote the transformation of the international governance system. Emerging economies have made important contributions to the global economy； however， they can hardly have proportionate power of discourse. The Chinese Government has proposed updating the global governance system many times. But while the call for reform has been loud， the process of reform has been slow. The AIIB provides a new and significant platform for emerging economies to participate in global governance.

Reforming the global governance system reflects the trend of the times. Not only emerging economies and developing nations， but also developed countries in Europe， all want to fix the problems in the current international economic governance system and inject new vitality to their economies. The opening of the AIIB is expected to accelerate the long overdue reform of global economic governance， and that is welcome news.