Luxembourg is gearing up to host the annual meeting of the China-led Asian Infrastructure Investment Bank (AIIB) in July, marking the first time the summit will be hosted outside of Asia.
The meeting comes at a time when the Grand Duchy is strengthening its ties with China, amidst growing trade tensions with the US.
The country already has strong ties to China. Seven Chinese banks use it as their inroad into Europe and it is the largest European listing centre for bonds denominated in renminbi. Moreover, Alipay, China’s ubiquitous answer to Paypal, won a licence in Luxembourg in January.
China founded the AIIB in 2016 to help fund infrastructure projects in Asia, offering an alternative to US-backed institutions like the World Bank and the Asian Development Bank.
But the AIIB’s vice president denied his bank was linked to China’s global ambitions such as its Belt and Road initiative, a colossal global infrastructure plan that has led to accusations of economic imperialism.
“The AIIB is not a Chinese institution. The AIIB is a multi-lateral international institution,” said Danny Alexander, a former Liberal Democrat chief secretary to the UK Treasury.
“No one country can dominate or control (its) proceedings, they’re decided collectively,” Alexander said, speaking at an event, together with Finance Minister Pierre Gramegna.
“It’s not because the origin of the idea is Chinese that the bank is Chinese,” Gramegna added.
Initially launched with 57 countries on board, the Beijing-headquartered lender now counts 93 members, with 25% of those from outside of Asia. China contributes 30% of the bank’s capital and controls 26.8% of the voting shares making it by far the largest shareholder.
India is the second highest with a voting share of 7.7%.
The AIIB had agreed to hold the summit in Luxembourg at the government’s invitation, Gramegna said, pointing out that Luxembourg was also the first non-Asian country to join the development bank.
Luxembourg expects 1,200-to-1,500 delegates from around the world to descend on its capital for the event. The meeting would also provide the AIIB with an opportunity to engage with EU countries that have signed up, like the UK, Germany and France, Alexander said.