Why isn’t China’s Belt and Road Initiative acting through the Asian Infrastructure Bank?

Image Source (UN Photo)

Written by James Lo

One question that was posed in class by Prof. Alden is why the Belt and Road Initiative (BRI) mainly acted through the China Export and Import Bank (Exim Bank) and China Development Bank (CBD) rather than through the Asian Infrastructure Investment Bank (AIIB). Indeed, with the BRI being a global project (spanning 136 countries)[1], the framework of a multilateral institution should be appealing for the Chinese government to act through that institution. However, with the current situation the exact opposite as China is relying on its two State-owned banks, what are the reasons the AIIB is not used?

Timing and Framework

The AIIB is a very young institution. It was open for business only in 2016, with its starting capital around $100 billion. Its current membership is at around 100 countries. It had 57 founding members, with 43 other members joining gradually over the next 3 years [2]. On the other hand, the BRI (or the One Belt One Road Initiative as it was called until 2016) started in 2013 when President Xi announced the Silk Road Economic Belt in Kazakhstan. The Silk Road Economic Belt then gradually snowballed along with different initiatives including partnerships with Russia into the Belt and Road Initiative. As stated above, the membership numbers of the BRI and AIIB are different – BRI is slightly higher than the AIIB. The BRI was also conceived earlier. Moreover, the AIIB has only engaged in smaller projects that pale in comparison to the BRI – AIIB projects rarely go above $100m, with the total lending by AIIB reaching $8.5b in 2019 [3]. BRI projects, on the other hand, now has an estimated total investment of $200b, with the largest project being the China-Pakistan Economic Corridor (estimated at $68b). The vastly different scales of investment, coupled with the relative young lifespan of the AIIB, can lead to the argument that the AIIB simply may not be equipped to handle the large amounts of investments that the BRI aims for.


Another reason that China is acting through the Exim bank of China and CDB is because they will benefit more through bilateral dealings than dealing within the multilateral settings that the AIIB offers. This is because it is through bilateral dealings where China can use its significant market share to its full extent. Within the setting of AIIB, the countries can use formal institutional tools such as the Complaints-resolution, Evaluation and Integrity Unit to question the deals that China proposes or to work together with other countries within the AIIB membership to increase its negotiating power by negotiating as a block. By foregoing the use of AIIB, China can therefore retain its significant negotiating power and negotiate better deals in its favour.

Coherency of the BRI

Finally, China’s BRI may choose not to act through the AIIB because of the BRI itself not being a coherent programme. As stated before, the BRI actually comprises of multiple different policies regarding different geographical areas. Projects that are under the categorisation of the BRI include the aforementioned China-Pakistan Economic Corridor, the Bangladesh-China-India-Myanmar Economic Corridor, the New Eurasian Land Bridge, China–Central Asia–West Asia Corridor. Moreover, there is no definition offered by the Chinese government as to what constitutes a BRI project. This meant that multiple ministries within China all seek to classify their projects as BRI projects. [4] An example of this can be seen in the small town of Sihanoukville in Cambodia. Projects that are between China and Sihanoukville include an expressway that links the city to the capital, joint ventures between private Chinese and Cambodian companies that form the Sihanoukville Special Economic Zone, as well as Chinese casinos that populate the city. The various interests that lead to the different projects in Sihanoukville suggests that AIIB simply cannot be a vessel for BRI investment because China’s cooperation with a country is not just from one entity, nor is it united in its aspirations. The difference in interest also suggests that the BRI is not coherent – if it is to be suggested to the AIIB as a possible project, it needs to provide documents such a brief project summary and/or a preliminary or final feasibility report which the Chinese may not be able to do.


This essay offers a condensed attempt at analysing why China chooses to act through the Exim-Bank and CDB instead of using them multilateral settings of the AIIB. The three reasons offered here are the earlier conception of the BRI & the scale of financing, China’s potential preference for bilateral dealings to fully utilise its market size and the lack of coherency of the BRI.


[1] 中國一帶一路網。 2019. 已同中國簽訂共建‘一帶一路’合作文件的國家一覽。

[2] AIIB. 2019. AIIB reaches the 100-member milestone.

[3] China Banking News. 2019. Asian In­fra­struc­ture In­vest­ment Bank Mem­ber­ship Ex­pands to 100, Lend­ing Hits $8.5 Bil­lion in To­tal

[4] Foreign Affairs. 2019. Demystifying the Belt and Road

Further readings if you are interested

The AIIB and the ‘one-belt-one-road’ (Brookings Institution) https://www.brookings.edu/opinions/the-aiib-and-the-one-belt-one-road/

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