The signing ceremony of memorandum of understanding on establishing the Asian Infrastructure Investment Bank (AIIB) is held in Beijing, Oct 24 2014. (Photo/Xinhua)
Representatives of the 50 prospective founding members of the Asian Infrastructure Investment Bank on Monday morning signed the bank's articles of agreement (AOA), laying the ground rules for officially inaugurating the multilateral lender.
The rest of the seven prospective founding members have not yet signed the agreement as they are waiting for domestic approval.
The AOA, the bank's mini-constitution, underpins the fundamental principles for the establishment and future operations of the AIIB. The signing wrapped up a six-month behind-the-scene intense negotiation and paved the way for establishing the bank before the end of this year.
According to the AOA, China will contribute $29.78 billion of the bank's $100 billion capital base, becoming the largest shareholder within the bank with a 30.34 percent stake in AIIB. Under the formula that also factored in possible new members' share and prospective founding members' rights, China got 26.06 percent of the total votes.
Seventy-five percent of the shares are distributed among countries within the Asian region while the other 25 percent are assigned among countries beyond the region. As the bank expands its membership in the future, countries beyond the region can expand their share but the portion cannot be bigger than 30 percent.
The bank will be headquartered in Beijing, with possible regional centers in other countries. The official working language is English.
There are some other innovation, such as the non-resident, non-paid board of directors. Public procurement of the AIIB will be open to all countries around the world, instead of within member countries.
"The AIIB will adopt international good practices and embrace high standards, striving to build a professional, efficient and clean platform for infrastructure investment," Finance Minister Lou Jiwei said in an op-ed published in China Daily.
After signing the agreement, representatives of prospective founding members will bring the agreement back to their countries for legal adoption processes. The bank can be legally valid as long as more than 10 countries, with their total subscribed capital no less than 50 percent of the total capital, get the charter approved by their legislatures.
AIIB Timeline:
Oct 2, 2013 - President Xi Jinping proposes the establishment of the Asian Infrastructure Investment Bank to promote connectivity and economic integration in Asia.
April 10, 2014 - Chinese Premier Li Keqiang announces at Boao Forum that China was ready to "intensify consultations with relevant parties in and outside Asia on the preparations for the Asian Infrastructure Investment Bank (AIIB)."
Jin Liqun, former chairman of investment bank China International Capital Corp and vice-president of the Asian Development Bank, is appointed as secretary-general of the Multilateral Interim Secretariat for Establishing the AIIB.
Oct 24, 2014 - The first batch of 22 prospective founding members, including China, India and Singapore, sign the Memorandum of Understanding on Establishing the AIIB in Beijing.
Nov 24, 2014 - Indonesia signs up as the last ASEAN country to join the AIIB.
Mar 12, 2015 - China receives confirmation from the United Kingdom that it is applying to join the AIIB as a founding member. The UK is the first of the G7 leading economies to join the bank, and its participation prompts a wave of other European countries to follow.
Mar 31, 2015 - It is announced that 57 countries have joined or applied to join the AIIB as prospective founding members before the deadline. Thirty-seven are classed as "intra-regional members", entitled to the bulk of the shares in the bank, while the other 20 are "non-regional members".
A Chief Negotiators' Meeting is convened at the finance deputy level as the primary body responsible for negotiating the bank's articles of association. A Multilateral Interim Secretariat is established to provide technical support and services to the CNM.
November onward - Five rounds of CNM talks are held in China, India, Kazakhstan and Singapore. Within six months, consensus is reached on all key elements, such as the AIIB's purpose, membership, capital subscription, voting powers, operations and governance and decision-making structures.
June 29, 2015 - The 57 prospective members sign the articles of association in Beijing. The articles will be submitted to each nation's legislature for approval, and the bank is expected to be formally established before the end of the year.
