Making Inroads: Chinese Infrastructure Investment in ASEAN and Beyond

Making Inroads: Chinese Infrastructure Investment in ASEAN and Beyond

August 15, 2016 by Inclusive Development International
Inclusive Development International
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Place of Publication: North Carolina
Date of Publication: August 2016
Number of Pages: 69
License: CC-BY-NC-ND
Language of Publication: English

Little more than a decade ago, China was a relatively minor actor in global investment and finance. By 2014 it had become the second largest global investor, second only to the United States. Outbound investment has been made possible due to strong backing from the Chinese state and financing from its policy and commercial banks. In recent years, China has promoted the establishment of new financial institutions and initiatives, including the multilateral Asian Infrastructure Investment Bank (AIIB). China has also established investment funds such as the Silk Road Fund to provide further capital for outbound investment. These new institutions focus heavily on infrastructure development, and with support from its One Belt One Road initiative, China is set to expand its role in global infrastructure financing significantly in the coming years.

This publication seeks to increase public awareness of these institutions and initiatives, how they will potentially impact on local communities and the environment, and what environmental and social standards and governance systems they have adopted. It also discusses strategies that civil society groups could deploy to respond to these developments and influence the policies, projects and operations of Chinese-led finance institutions.

Seven chapters of the report include; The Evolving Role of China in Global Finance, The Asian Infrastructure Investment Bank, The One Belt One Road Initiative, Chinese Investment Funds Operating in the ASEAN Region, China's Policy Banks: Financiers of the Going Out Strategy, Implications for Instrastructure Financing in the ASEAN Region, and The Growth of Chinese Overseas Finance and Investment: Opportunities for Civil Society to Respond.

The research and development of this publication was supported by: Heinrich-Böll-Stiftung South East Asia, The McKnight Foundation and Planet Wheeler Foundation.

Table of contents:

 

Introduction

Background: The Evolving Role of China in Global Finance

  Lack of Representation of Emerging Economies at Established IFIs

  Frustrations Regarding Efficiency of Existing International Financial Institutions .

  Global Demand for Infrastructure Finance

  China’s Increasing Importance as Global Developer, Investor and Financier

  Slowdown of the Chinese Economy and Domestic Overcapacity

The Asian Infrastructure Investment Bank

  AIIB Membership

  Sectoral Focus and Approach of the AIIB

  Shareholding and Voting Powers

  Structure and Management of the AIIB

  AIIB Commitments to Transparency and Anti-Corruption

  Environmental and Social Safeguards

  Interaction Between AIIB and Other Financial Institutions

The One Belt One Road Initiative

  What is One Belt One Road?

  Motivations for Establishing One Belt One Road

  Management of One Belt One Road

  Environmental and Social Safeguards Attached to One Belt One Road

  One Belt One Road Projects and the ASEAN Region

  Financing for Projects Within the One Belt One Road

Chinese Investment Funds Operating in the ASEAN Region

  The Silk Road Fund

    Silk Road Fund Environmental and Social Standards

  China-ASEAN Investment Cooperation Fund

    China-ASEAN Investment Cooperation Fund’s Environmental and Social Standards

China’s Policy Banks: Financiers of the Going Out Strategy

  China Development Bank

    China Development Bank Environmental and Social Standards

  Export-Import Bank of China

    Eximbank Environmental and Social Standards

Implications for Infrastructure Financing in the ASEAN Region

  Increased Access to Infrastructure Financing: New Risks or New Opportunities?

  Social and Environmental Standards of Chinese Financiers

  The Response of Other Nations and Institutions

  The Development of China’s Role in the ASEAN Region

The Growth of Chinese Overseas Finance and Investment: Opportunities for Civil Society to Respond