China urges AIIB to step up cross-border development funding, says global aid drying up

[BEIJING] China’s finance minister on Wednesday (Jun 25) urged the Asian Infrastructure Investment Bank (AIIB) to expand funding for cross-border connectivity projects in developing nations, citing a global decrease in international development funding.

Lan Foan called on the 110-member lender to increase its support for emerging markets, noting that many were also under pressure from a slowing global economy.

The finance minister did not name the United States, but prior to US President Donald Trump’s return to the White House this year, Washington was firmly established as the world’s top development spender.

China is the biggest contributor to the AIIB and holds 26 per cent of the votes.

Caught in a two-front trade war with the US and European Union that threatens to derail a fragile export-led recovery, Chinese officials have increasingly emphasised ties with South-east Asia, which last year overtook the EU to become the US$19 trillion economy’s top export market.

But while South-east Asia boasts some of the world’s fastest-growing economies, including Vietnam, the Philippines and Indonesia, it remains a long way from being a viable substitute for the US and EU markets, where consumption is much more potent than China’s neighbours, analysts say.

“Global economic growth is slowing, international development aid funds are declining, and developing countries – constrained by limited public resources – commonly face a funding gap for cross-border connectivity investments,” Lan told the AIIB’s annual meeting in Beijing.

“China looks forward to the AIIB demonstrating greater intensity and rolling out more measures to mobilise additional resources in support of cross-border connectivity,” he added.

Lan also called on private firms to increase their involvement in cross-border investment projects. REUTERS