Jin Liqun, President of AIIB, speaks on AIIB, India, Belt & Road, Coal Financing, Bretton Woods, etc.

China-India border clash was the "first severe test of the nature of AIIB as a multilateral institution"

Update: after publishing and sending the newsletter via email, a few corrections were made. So the version here on the Substack page may be a little bit different from the emailed version. Sincere apologies for the errors.

***

Below is a speech by Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB) and once China’s vice finance minister, at 中国国际金融30人论坛第三届研讨会 the 3rd symposium of the China International Finance 30 Forum, on May 16, 2021.

The speech is available on some Chinese websites, including on Tencent News and the public WeChat blog - based on which this translation is produced - of Shanghai Development Research Foundation, which, according to reports in 2020, was the organizer of the forum’s first symposium in Beijing. A version of the speech was also published on Financial News 金融时报, a newspaper under China’s central bank, on June 7.

To date, there appears to be no English coverage of the speech, which your Pekingnologist finds would be newsworthy and informative. As usual, this newsletter is long, but it will be worth your time.

Again, please keep in mind this is a personal newsletter running personal writing and translations, so the buck stops with your Pekingnologist - not his day-job employer. The translation is neither authorized nor approved by Jin or anybody else, all highlights are made by this newsletter, and errors may well exist.

***

Some highlights to entice you to read the whole thing:

1) The first severe test of the nature of AIIB as a multilateral institution was When there was a conflict on the border between China and India, the AIIB still offered loans to India, as scheduled long before the conflict. When the Sino-Indian border conflict occurred, the management of AIIB adhered to international standards, and the international response was very positive. 

2) Not long ago, I held a video conference with a German think tank, which surprised the Germans - India accounts for 25% of the total loans of AIIB and is the No.1 borrower. I said, what's so surprising about this? Isn't this (AIIB) an international institution? 

We can't talk about international standards and best practices at ordinary times but when we encounter practical problems we lost our thinking and resorted to something else. Once you break your promise, it is very difficult to restore your reputation.

The borrowing countries are not required to cooperate with Chinese-funded institutions - the principle of mutual consent always holds at AIIB. The AIIB has cooperated with Silk Road Fund and is also negotiating with some Chinese-funded enterprises, but all of them are based on the needs of the borrowing countries themselves.

3) We just want to establish an international multilateral institution in the true sense, adhere to best practices and be apolitical. Bilateral contradictions among member States should not be dragged into multilateral institutions. 

4) Under Jin’s leadership, the AIIB has steered clear of coal financing. A senior Chinese official recently said Some countries want our country to help build coal-fired power plants, but coal-fired power plants have reputation problems, so China feels very entangled.

To which Jin replied that if China can clearly declare that the Belt and Road Initiative will not engage in coal power and only support clean energy, it will greatly enhance the reputation of the BRI.

5) If the existing governance structure and operation mode of international multilateral institutions are not reformed, it will be difficult to adapt to the requirements of the new era. Hence, new bodies like the AIIB are needed.

Every single provision in the Washington Consensus does not seem to make a big mistake, but putting them together for implementation is a huge risk for developing countries. The Washington Consensus appears to represent the truth, but it is not applicable to many countries. 

6) China has grown a lot. Does it mean that China can naturally play a leading role in the international economic order and that we have a lot of power? In fact, not so much.

7) It is always correct that we should be modest and prudent.

We are already a big country, it is very important for us to have the demeanor and bearing of a big country in our relations with developed countries and many developing countries.

8) Jin also answered three main problems that make the United States very worried. First, will the AIIB initiated by China invade the territory of the World Bank? Second, will the AIIB be dedicated to cooperating with Chinese-funded institutions to promote Chinese-funded institutions to go global? Third, is the AIIB a tool to promote China's Belt and Road Initiative, or is it simply a bank of the BRI?

These are just a few examples - more in the full speech below.

***

当下我们所处的国际经济秩序，是战后成立的布雷顿森林体系。布雷顿森林体系建立的过程，给我们很多思考，其中一个关键问题，即是历史的重复。

At present, the international economic order we live in is the Bretton Woods system established after World War II. The process of establishing the Bretton Woods system gives us a lot of thoughts, one of which is the repetition of history.

第二次世界大战行将结束的时候，法西斯的失败已没有悬念，反法西斯国家已经开始考虑，战后如何建立一个新的体系，防止战争再次发生。1944年7月1日，布雷顿森林会议召开时候，正值世界经济重心从英国向美国转移。七十多年以后的今天，一定程度上的经济重心转移再次出现。我认为，从第一次世界大战结束到第二次世界大战爆发，仅仅间隔短短二十年，其中一个重要原因，是各国都采取“以邻为壑”的政策。美国要求英法还款，英法就向德国索赔，索赔额度巨大。德国忍无可忍，又发动了战争。第二次世界大战快结束的时候，主要国家都在思考，如何防止这样的事情再次发生。

At the end of the Second World War, there was no suspense in the defeat of fascism, and the anti-fascist countries had begun to consider how to establish a new system after the war to prevent the war from happening again. On July 1, 1944, when the Bretton Woods Conference was held, the focus of the world economy shifted from Britain to the United States. Today, more than 70 years later, the shift of the economic center of gravity to a certain extent reappears. In my opinion, it took only 20 years from the end of the First World War to the outbreak of the Second World War. One of the important reasons is that all countries adopted the policy of "beggar-thy-neighbor". When the United States demanded repayment from Britain and France, Britain and France claimed compensation from Germany, with a huge amount of compensation. Germany couldn't bear it and launched a war again. At the end of the Second World War, major countries were thinking about how to prevent such a thing from happening again.

回看七十多年以后的今天，我们应该思考，如何防止冷战变热战，如何防止产生新的冷战，如何防止新的冷战变新的热战。如果不能和平地渡过这个重大历史关头，所有国家都将面临灾难。正确认识国际经济秩序的建立，和七十多年来的运行历程，并从中吸取经验教训，对于指导我们下一步的战略是非常关键的。当年各国是如何设计这个战后体系的？为什么要设计这样一个体系？这个体系到今天，有什么地方依然有效，有什么地方已经失效？分析清楚这些问题，对指导中国在新的二十一世纪的国际政治与经济体系中发挥更大作用，尤其是在金融方面发挥更大的作用，是十分重要的。

Looking back more than 70 years later, we should think about how to prevent the cold war from turning into a hot war, how to prevent the new cold war from turning into a new hot war. If we can't get through this important historical juncture peacefully, all countries will face disaster. A correct understanding of the establishment of the international economic order and its operation in the past 70 years and drawing lessons from it are crucial to guide our next strategy. How did countries design this post-war system? Why design such a system? To this day, which part of this system remains effective and which part has failed? A clear analysis of these problems is very important to guide China to play a greater role in the international political and economic system in the 21st century, especially in finance.

二战结束后，中国也是战胜国，作为名列第四的大国，参加了布雷顿森林会议，但是整个布雷顿森林会议的讨论，基本都是在英美两国之间，其他国家实际上只是列席而已。很多今天的国家当时都还是殖民地，没有参加这个会议的可能。中国在当时能够参加这个会议，并在布雷顿森林机构里面位列第四，是十分难得的。但是，我们中国没有发言权，主要是英美两国在博弈。那时世界经济和金融的重心正在从伦敦转向纽约。第二次世界大战在很大程度上催生了一个新美国，尽管美国当时的国力无出其右，但作为新生力量，美国既有强势表现的冲动，又有团结大家，特别是欧洲诸国的意愿，它在很多方面还是比较讲道理的。第二次世界大战给美国带来了很多的机会，美国牢牢把握住了这些历史机会。

After the end of World War II, China was also a victorious country. As the fourth largest country, it participated in the Bretton Woods Conference. However, the discussion of the whole Bretton Woods Conference was basically between Britain and the United States, and other countries actually only attended. Many countries today were still colonies at that time, so they could not attend this conference. At that time, China was able to attend this conference and ranked fourth among the Bretton Woods institutions, which was very precious. However, China had no power, mainly because Britain and the United States were the dominant players. At that time, the focus of the world economy and finance was shifting from London to New York. To a great extent, the Second World War gave birth to a new America. Although America's national strength at that time was unmatched, as a new force, the United States had both the impulse of strong performance and the will to unite everyone, especially European countries. The United States was quite reasonable in many aspects. The Second World War brought many opportunities to the United States, which firmly grasped these historical opportunities.

在设计国际经济体系的时候，英国的凯恩斯和美国的怀特进行较量。论知名度，怀特只是美国财政部里一个名不见经传的中层干部。他们之间的较量的焦点是，国际经济体系到底要维护哪个国家的利益？值得我们今天思考的是，一方代表英国的利益，一方代表美国的利益，同时，双方也还要代表全球的利益，在那个历史条件下，拥有这样的政治远见是很不容易的。今天有些国家的政客已经大大退步了，只考虑自己的利益，不再考虑其他国家的利益。如果不考虑别人的利益，只考虑自身的利益，自身的利益最终也是保不住的。任何一个国家进行国际谈判，不考虑自己国家的利益是不可能的，但应该从什么角度来考虑是值得思考的问题。

When designing the international economic system, John Maynard Keynes of Britain and Harry Dexter White of the United States competed. In terms of reputation, White was only an unknown middle-level cadre in the U.S. Treasury. The focus of their contest is which country's interests should the international economic system safeguard? What deserves our consideration today is that one side represents the interests of Britain, the other represents the interests of the United States, and at the same time, both sides were trying to represent the interests of the whole world. Under that historical condition, it was not easy to have such political foresight. Today, politicians in some countries have greatly regressed, considering only their own interests and not the interests of other countries. If you don't consider other people's interests - only consider your own interests - your own interests will eventually be lost. It is impossible for any country to conduct international negotiations without considering its own national interests, but it is worth considering from what angle the country should consider its own national interests.

最后，还是美国怀特的意见占了上风，国际经济体系需要自由贸易和资金的自由流动。当时，欧洲国家需要美国提供粮食、资金和各种机械设备。美国吸取了第一次世界大战以后的教训，决定要帮助欧洲国家重建，同时也不要求欧洲国家立即偿还美国的债务。这段历史，值得我们从更深层次的意义上去研究。当时的设想，是要成立一个国际货币基金组织，当一些国家宏观经济上出现问题，这个国际机构可以来帮这些国家。但是，为了要吸引这些国家加入国际货币基金组织，又成立一个国际复兴开发银行，即世界银行（这和我们今天的世界银行是不同的，因为后来的世行有了更多组成部分），以便能为很多国家提供资金，进行重建。所以在章程里，如果，一个国家是世界银行的成员国，那么，该国也必须是国际货币基金的成员国。成立世界银行，实际上是作为一个“诱饵”：只要一国愿意接受宏观监管，就可以获得贷款。七十年以后，我们成立了亚投行，成员国必须是世界银行和亚洲开发银行的成员，因为他们的成员国同时也是国际货币基金的成员。但是，之所以规定亚行成员也可以参加，主要是为了考虑到一些特殊情况，以便为个别非主权经济体加入亚投行提供章程上的依据。

Finally, the opinion of Harry Dexter White of the U.S. prevailed - the international economic system needed free trade and free flow of capital. At that time, European countries needed the United States to provide food, capital, and all kinds of machinery and equipment. The United States learned the lessons after the First World War and decided to help European countries rebuild. At the same time, it did not require European countries to repay the debts of the United States immediately. This period of history is worth studying in a deeper sense. At that time, the idea was to set up an international monetary fund, which could help some countries with macroeconomic problems. However, in order to attract these countries to join the International Monetary Fund, an International Bank for Reconstruction and Development, namely the world bank, was established (which is different from the World Bank today, because later the World Bank had more components), so as to provide funds for many countries to rebuild. Therefore, the articles of agreement said if a country were to become a member of the World Bank, it must also be a member of the International Monetary Fund beforehand. The establishment of the World Bank is actually a "bait": as long as a country is willing to accept macro-regulation, it can obtain loans. Seventy years later, we established the AIIB, and its members must be members of the World Bank or the Asian Development Bank, because their (World Bank?) members are also members of the International Monetary Fund. However, the reason why ADB members can also participate is we took into consideration of some special circumstances, so as to establish a basis in the articles of agreement to facilitate individual non-sovereign economies to join the AIIB.

当时，代表英国的凯恩斯提出，把布雷顿森林机构设置在伦敦，但是美国不同意。凯恩斯又提议设在纽约，美国还是不同意。最后设在了美国首都华盛顿特区，跟白宫一街之隔：白宫在十六街，世界银行在十八街，国际货币基金组织在十九街。

At that time, Keynes, who represented Britain, proposed setting the Bretton Woods institutions in London, but the United States disagreed. Keynes proposed the institutions to be located in New York, but the United States still disagreed. Finally, they were decided to locate in Washington, D.C., across the street from the White House: the White House is on 16th Street, the World Bank is on 18th Street, and the International Monetary Fund is on 19th Street.

然后，美国要求按一美元一票的规则，设置世界银行的股份，这跟当时在同时磋商成立的联合国的一国一票规则是不同的。在一美元一票的规则下，美国实现了成为最大股东、担任行长、总部设在首都华盛顿三个目标。世界银行成立以后，所有新成立的国际多边机构的最大股东，都不能够同时做到这三点，亚投行是唯一的例外。国际货币基金组织自然不能同时让美国直接掌控，这个机构就让给了欧洲来掌管。因为世界银行当时的使命是帮助重建，虽然它没有国际货币基金的宏观监管影响力，但在重建中的作用和影响力实际是很大的。

Then, the United States demanded that the shares of the World Bank be set up according to the rule of "one dollar, one vote", which was different from the one country, one vote rule of the United Nations, the establishment of which was in consultation at that time. Under the "one dollar, one vote" rule, the United States has achieved three goals: to become the largest shareholder, to have Americans become the President of the World Bank, and for the institution to be headquartered in Washington, DC. After the establishment of the World Bank, the largest shareholder of all newly established international multilateral institutions could no longer achieve these three points at the same time, with the exception of AIIB. Naturally, the International Monetary Fund could not be directly controlled by the United States at the same time, so it was handed over to Europe. Because the mission of the World Bank at that time was to help reconstruction, although it did not have the macro-regulatory influence of the International Monetary Fund, its role and influence in reconstruction were actually very big.

21世纪，中国发起创办亚洲基础设施投资银行，是发展中国家中唯一有能力可以担当此事的。中国需要有更大的担当，通过努力，中国实现了三大目标：中国是最大的股东，中国人担任行长，总部设在首都北京。

In the 21st century, China initiated the establishment of the Asian Infrastructure Investment Bank (AIIB), which is the only developing country capable of undertaking this task. China needed to play a greater role. Through hard work, China achieved three major goals: China is the largest shareholder, a Chinese citizen becomes the President of the AIIB, and its headquarters is in Beijing.

六十年代，亚开行成立的时候，我们还处在文化大革命时期，当时，台湾和香港加入了。日本何尝不想把总部设在东京。首先，美国开始是不同意成立亚开行的，最后达成妥协，美国支持成立亚行，条件是美日平起平坐，但日本还是象征性的多一股。因为这是亚开行，所以日本人当行长，但是总部不能设在东京。当时，菲律宾马尼拉是亚洲地区相当发达的首都，还有就是伊朗的德黑兰。最后，菲律宾总统马科斯通过努力，争取大家投票支持菲律宾的马尼拉成为亚行总部所在地。伊朗一怒之下退出，没有参加亚行，以后由于政治原因，伊朗再也进不来了，就像当年苏联一怒之下，不参加国际货币基金组织和世界银行一样，过了多年才重新进来。所以，我们在任何国际场合都要冷静，都要理性，都要从长计议。一怒之下，难成大事。

In the 1960s, when ADB was founded, we were still in the Cultural Revolution, when Taiwan and Hong Kong joined. Japan certainly wanted to set its headquarters in Tokyo. First of all, the United States initially disagreed with the establishment of ADB, and finally reached a compromise. The United States supported the establishment of ADB, provided that the United States and Japan were on an equal footing, but Japan symbolically had one more share. Because this is the Asian Development Bank, a Japanese citizen become the President, but the headquarters could not be located in Tokyo. At that time, Manila, Philippines, was a rather developed capital in Asia, and (another candidate city was) Tehran, Iran. Finally, Philippine President Ferdinand Marcos worked hard to get votes for Manila in the Philippines as the headquarters of ADB. Iran quit in anger and didn't participate in ADB. Later, due to political reasons, Iran couldn't join anymore. Just like the Soviet Union did not participate in the International Monetary Fund or the World Bank in anger, it took many years to join eventually. Therefore, we should be calm, rational, and take a long-term view on any international occasion - it is difficult to achieve great things with rage.

历史的重复不是简单的重复，历史可能以一种新的形式在重复，有的时候甚至都看不出历史在重复。丘吉尔说：“我从历史中知道，人们从来不知道吸取历史教训”（I have learnt from history that people never learn from history）。其实，我们人类犯的错误是在一遍又一遍重复前人犯过的错误，要想犯一个原创错误，是很不容易的。读《资治通鉴》二到三百页，人该犯的错误，很早就已经犯完了，以后不过是重复犯哪些错误而已。 

The repetition of history is not a simple repetition. History may be repeated in a new form, and sometimes the repetition could not be seen. Winston Churchill said, "I have learnt from history that people never learn from history". In fact, the mistakes made by human beings are repeated over and over again. It is not easy to make an original mistake. After reading two or three hundred pages of "Zizhi Tongjian" (Comprehensive Mirror in Aid of Governance, a pioneering reference work in Chinese historiography by Sima Qian), (you realize that) mankind has already made all the mistakes they could make, and they later merely repeat the mistakes their ancestors have already made.

战后国际经济秩序的三大支柱是国际货币基金、世界银行、关贸总协定，关贸总协定后来演变成了世界贸易组织。这三大经济支柱起到的作用是相当大的，因为它们都是遵循国际合作的原则，是按多边主义的原则来建立和运行的，通过协商来解决重大问题。中国是在改革开放以后才参与到国际经济体系当中，我们虽然迟到了三十多年，但是加入以后，我们起了很积极的作用，获益良多，并且也在发挥越来越大的作用。中国一再说明，我们无意推翻现有的国际经济秩序，我们同样也是受益者。 

The three pillars of the post-war international economic order are the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade, which later evolved into the World Trade Organization. These three economic pillars play a considerable role, because they all follow the principle of international cooperation, are established and operated according to the principle of multilateralism, and solve major problems through consultation. China joined the international economic system only after the reform and opening-up. Although we were more than 30 years late, we played a very positive role after joining, benefited a lot, and played an increasingly important role. China has repeatedly stated that we have no intention of overthrowing the existing international economic order, and we are also beneficiaries.

但是，这个国际经济体系是在七十多年前建立的，当时的情况和现在已经有很大的不同。国际上各个国家之间的经济实力已经发生了变化，形成了新的格局，诉求也不再一样。进入二十一世纪以来，国际经济秩序改革成了一个话题，很多国家提出了挑战：是不是需要改革？能不能改革？应该怎么改革？由谁来改革？所有这些问题值得我们思考。

However, this international economic system was established more than 70 years ago, and the situation at that time was very different from that now. The economic strength among countries in the world has changed, forming a new pattern, and their demands are no longer the same. Since entering the 21st century, the reform of international economic order has become a topic, and many countries have raised challenges: Is it necessary to reform? Can we reform it? How should we reform it? Who will make the reforms? All these problems deserve our consideration.

第一、对现有的国际机构的一些运行原则，不进行改变行不行？这是肯定不行的。现在的这个国际经济体系，还是以美国、英国和西方发达国家为首制定的，是遵循他们所倡导的规则。现在发展中国家的GDP总量已经超过了发达国家，从金融、工业基础、高科技等来讲，发展中国家的成就也是可圈可点的。七十年以前建立的制度肯定不再完全适用于今天。 

First, can we not reform some operating principles of the existing international institutions? The answer is an absolute no. The current international economic system was formulated by the United States, Britain, and western developed countries, and followed the rules they advocated. Now, the total GDP of developing countries has surpassed that of developed countries. In terms of finance, industrial base, and high technology, the achievements of developing countries are remarkable. The system established 70 years ago is definitely no longer fully applicable today. 

下面的问题是怎么改？先看发达国家，他们不一定没有动力去改革，问题是改革的最后得益者是谁？这个问题确实比较复杂。就像联合国的改革一样，很多国家都认为联合国要改革，安理会要改革，但安理会的成员国并没有就如何改革达成一致。在国际金融机构和多边开发机构里，有一点我认为是要保留的，即一美元一票的规则是不能改的。改了对发展中国家没有好处，因为发展中国家以前美元少，现在美元多了，为什么把这个规则改掉？一美元一票的规则不能变成一国一票。联合国可以有一国一票，是因为联合国还有一个安理会，实际上，这不是一国一票。世界上没有真正的一国一票的规则。现在的问题是，在一美元一票规则不变的情况下，发达国家也会有担忧：发展中国家的GDP越来越大了，发达国家的GDP相对少了，以后就没有发言权了。这就好像我们管理企业时，要保护小股东的利益一样，不顾及小股东利益，剥夺小股东的权力，最后企业只剩下大股东，是不可行的。这是一个到目前为止并没有很好解决的问题，所以重塑布雷顿森林机构，就是要解决这样一些根本的矛盾。

The following question is how to reform it. Looking at developed countries first, they may not have the motivation to reform it. The question is who will benefit from the reform? This problem is really complicated. Just like the reform of the United Nations, many countries believe that the United Nations should be reformed and the Security Council should be reformed, but the members of the Security Council have not reached an agreement on how to make reforms. In international financial institutions and multilateral development institutions, I think we should keep one thing, that is, the rule of "one dollar, one vote" cannot be changed. Changing it is not good for developing countries, because developing countries used to have few dollars, but now they have more dollars - why change this rule (now)? The rule of "one dollar, one vote" cannot be changed into "one country, one vote." The United Nations can have "one country, one vote" because it also has a Security Council, which in fact does not implement "one country, one vote". There is no real "one country, one vote" rule in the world. The problem now is that under the condition that the one dollar, one vote rule remains unchanged, developed countries will also have concerns: the GDP of developing countries is getting bigger and bigger, and the GDP of developed countries is relatively smaller, so they will have less power in the future. It's like protecting the interests of minority shareholders when we manage a company it is not feasible to ignore the interests of minority shareholders, depriving them of their power, and finally leaving only major shareholders in the company (to dominate it). This is a problem that has not been solved well up to now. To reshape the Bretton Woods institutions involves solving such fundamental contradictions.

第二、七十年后的今天，美国为主的发达国家和欧洲国家控制国际金融机构的情况，并没有得到根本改变。国际货币基金组织，美国还是大股东，影响力当然很大。国际货币基金的总裁，历来是欧洲人，所以欧洲也有更大的发言权。亚行是日本和美国两国为最大股东，但是，作为亚洲的国际多边机构，日本人一直担任行长，美国拥有永久的副行长职位，各个成员国也都基本接受。其他国家则要推荐合适的人选竞争副行长的职位。我是中国第一人去竞争亚行副行长的，2003年我去竞争亚行副行长的时候，中日关系并不好，当时亚行的行长对中国是很友好的，对我也比较了解，他相信我不会给他添乱，我国政府大力推荐我，所以最终日本同意了。此后，中国人一直在亚行有一位副行长，中国在亚行的作用也加大了。

Today, seventy years later, the control of international financial institutions by developed countries dominated by the United States and European countries has not been fundamentally changed. In the International Monetary Fund, the United States is still a major shareholder, and it certainly has great influence. The managing director of the International Monetary Fund has always been a European, so Europe also has a greater say. In the ADB, the largest shareholders are Japan and the United States. However, as an international multilateral institution in Asia, the Japanese have always taken up the post of its presidency, and the United States has a permanent vice-president position, which is basically accepted by all ADB members. Other countries should recommend suitable candidates to compete for the post of vice president. I was the first person in China to compete for the vice president of ADB. When I went to compete for the vice president of ADB in 2003, Sino-Japanese relations were not good. At that time, the president of ADB was very friendly to China and knew me better. He believed that I would not make trouble for him. My government strongly recommended me, so Japan finally agreed. Since then, Chinese people have always had a vice president in ADB, and China's role in ADB has also increased.

第三、如果国际多边机构的治理架构和运行模式不改革，也很难适应新时代要求。国际机构中的话语权，一直由发达国家掌控，对成员国的政策进行干预，不管主观意愿如何，结果并不一定符合发展中国家的需要，甚至会严重影响发展中国家制定符合自己的发展战略。比如《华盛顿共识》中的每一个条款，看上去都不会有大错，但是，把它们放在一起执行，对发展中国家来说，就是巨大的风险。所以，《华盛顿共识》看上去似乎代表着真理，但是它对很多国家来说，其实并不适用。但是，如果一个国家不接受国际货币基金组织或世行的政策导向和要求，就不可能得到他们的资金支持，这显然是有失公允的。 

Third, if the governance structure and operation mode of international multilateral institutions are not reformed, it will be difficult to adapt to the requirements of the new era. The power in international institutions has always been controlled by developed countries, and the institutions kept intervening in the policies of member countries, regardless of their subjective wishes, which may not necessarily meet the needs of developing countries and may even seriously affect developing countries in formulating their own development strategies. For example, every single provision in the Washington Consensus does not seem to make a big mistake, but putting them together for implementation is a huge risk for developing countries. Therefore, the Washington Consensus appears to represent the truth, but it is not applicable to many countries. However, if a country does not accept the policy guidance and requirements of the International Monetary Fund or the World Bank, it is impossible to get their financial support, which is obviously unfair. 

再有一个，是双重标准的问题。1997年、1998年的亚洲金融危机把印尼苏哈托给搞下台了，在国际基金组织的压力之下，印尼被迫关掉十七家商业银行。有一张经典照片，国际货币基金组织总裁康德苏胸前交叉着双臂，居高临下地斜视着苏哈托总统和国际货币基金组织在协定上签字。这张照片被广泛传播，给世人展示了一种国际货币基金组织对受援国颐指气使的姿态。但是，2008-2009年美国次贷危机爆发，欧洲和其他地区遭受严重影响，国际基金组织非但没有关闭欧洲受困的银行，还给钱进行纾困。处理的方式完全不同，很多人都提出质疑，国际货币基金组织说，他们重新审议了政策，所以采取不同的办法。 

Another one is the problem of double standards. The Asian financial crisis in 1997 and 1998 brought down Suharto in Indonesia. Under the pressure of the International Monetary Fund, Indonesia was forced to close 17 commercial banks. There is a classic photo, in which International Monetary Fund Managing Director Michel Camdessus stood with his arms folded and looked down at President Suharto signing the agreement with the International Monetary Fund. This photo has been widely spread, showing the world a gesture that the International Monetary Fund is bossing the recipient countries around. However, in 2008-2009, the US subprime mortgage crisis broke out, and Europe and other regions were seriously affected. Instead of closing the troubled banks in Europe, the International Fund gave money to bail them out. The approach is completely different, and many people have questioned it. The International Monetary Fund said that they have reconsidered the policy, so they have adopted different approaches. 

(Creator: AGUS LOLONG | Credit: AFP via Getty Images Copyright: 2007 AFP)

2008-2009年金融危机发生以后，国际货币基金组织的独立评议局准备了一份报告，评估金融危机发生之前国际货币基金的表现。我作为独立咨询专家，参与这个文件的审议。我们中国在2008年初是双降，认为是经济过热的，所以要压增长、压通胀，但六个月后就推出了四万亿刺激。为什么？因为国际货币基金组织在2007年的世界经济展望中，对全球的经济预测是很积极的，没有预示美国的次贷危机和可能引发的全球金融风险。国际货币基金组织的预测是很有分量的，一旦发布了一个玫瑰色的经济展望，很多国家就都被误导了。国际货币基金组织和世界银行的研究报告，是具有重大的指导意义和影响力的，如果在这些机构里的管理模式和政策导向不改变，是肯定不行的。 

After the financial crisis in 2008-2009, the Independent Evaluation Office of the International Monetary Fund prepared a report to evaluate the performance of the International Monetary Fund before the financial crisis. As an independent consultant, I participated in the deliberation of this document. In early 2008, the Chinese policy was to rein in both growth and inflation thinking that the economy was overheating, so it was necessary to suppress growth and inflation, but six months later, the four-trillion yuan stimulus was launched. Why? Because in the World Economic Outlook published in 2007, the International Monetary Fund predicted the global economy very positively and did not predict the subprime mortgage crisis in the United States and the possible global financial risks. The forecast of the International Monetary Fund is very influential. Once a rosy economic outlook is released, many countries are misled. The research reports of the International Monetary Fund and the World Bank are of great guiding significance and influence. It definitely will not work if the management mode and policy orientation in these institutions remain unchanged.

第四、在整个体系难以改变的情况下，地区性、局部性的机制和体系就在不断地建立，作为整个体系的补充。1960年代初，日本为什么决意要成立一个亚行呢？因为世界银行不一定能够满足区域国家的要求。其实，日本也是受到其他地区成立多边机构的动态的启发，如1959年泛美开发银行成立，1964年非洲开发银行成立。1990年，苏东剧变之后，欧洲诸国发起成立欧洲复兴开发银行，旨在支持俄罗斯和东欧国家向市场经济过渡。1997-98年，亚洲金融危机发生之后，东盟和中日韩签署了一个区域货币互换的《清迈协议》。2008-09年，美国次贷危机引发了欧洲金融危机，使得欧洲决定成立欧洲稳定基金和随后的欧洲稳定机制。看来，为了解决国际货币基金组织和世界银行这两大全球性机构难以解决所有问题的情况下，作为对布雷顿森林机构的补充，各个国家和区域都相继推出各种机构或机制，尝试应对困难和挑战，满足不同需要。

Fourthly, under the condition that the whole system is difficult to change, regional and local mechanisms and systems are constantly being established as a supplement to the whole system. Why did Japan decide to set up an ADB in the early 1960s? Because the World Bank may not be able to meet the requirements of regional countries. In fact, Japan was also inspired by the development of multilateral institutions in other regions, such as the establishment of the Inter-American Development Bank in 1959 and the African Development Bank in 1964. In 1990, after the drastic changes in the Soviet Union and Eastern Europe, European countries initiated the establishment of the European Bank for Reconstruction and Development (EBRD), aiming to support Russia and Eastern European countries in their transition to a market economy. In 1997-98, after the Asian financial crisis, ASEAN, China, Japan, and South Korea signed a Chiang Mai Agreement on currency swap in the region. In 2008-09, the U.S. subprime mortgage crisis triggered the European financial crisis, which led Europe to decide to set up the European Stability Fund and the subsequent European Stability Mechanism. It seems that in problems that the two global institutions, International Monetary Fund and World Bank, find difficult to solve, and as a supplement to the Bretton Woods institutions, various countries and regions have successively introduced various institutions or mechanisms to try to cope with difficulties and challenges and meet different needs.

综上所述，推动国际金融体系改革，确有必要。现在，中国终于可以发挥影响力了。有两个事件需要注意，亚投行成立之后，中国在国际货币基金组织中的地位也上升了；第二、2015年人民币“入篮”，在国际货币基金组织的SDR货币篮子里，成为该货币篮子中除美元、欧元、日元和英镑之外的第五种货币。大家知道，中国在国际货币基金组织中地位和投票权的提升，人民币入篮等，一直是遇到很大的阻力的。亚投行的筹备进展顺利，其成立将既成事实，之后，这些问题就逐步得到解决了。为什么？这些问题都值得人们思考。

To sum up, it is necessary to promote the reform of the international financial system. Now, China can finally exert its influence. There are two events that need attention. After the establishment of the AIIB, China's position in the International Monetary Fund has also risen; Second, in 2015, RMB entered the basket and became the fifth currency in the SDR currency basket of the International Monetary Fund,  in addition to the US dollar, euro, Japanese yen, and British pound. As we all know, the promotion of China's status and voting rights in the IMF and the entry of RMB into the basket all met great obstacles. But as the preparation for the AIIB was progressing smoothly and its establishment was soon to be avoidable, those problems were gradually solved. Why? All these problems deserve people's consideration.

美国人当时对我们有很多的猜测、很多的疑问和很大的担心。主要有三个问题使得美国非常担忧。第一个问题，中国发起成立的亚投行，是否会挖世界银行墙角？第二个问题，亚投行是否会专和中资机构合作，推动中资机构走出去？第三个问题，亚投行是否是推动中国“一带一路”战略的工具，或者干脆就是“一带一路”银行？ 

Americans had a lot of speculations, questions, and worries about us at that time. There were three main problems that make the United States very worried. First, will the AIIB initiated by China invade the territory of the World Bank? Second, will the AIIB be dedicated to cooperating with Chinese-funded institutions to promote Chinese-funded institutions to go global? Third, is the AIIB a tool to promote China's Belt and Road Initiative, or is it simply a bank of the BRI?

对于这三个问题，我在很多场合做了必要说明和澄清。第一个问题，亚投行从一开始就致力于发展和世界银行、亚行和欧洲复兴开发银行等多边金融机构和开发银行的合作，绝不会去挖世界银行等的墙角。事实上，彼此之间的合作非常融洽，非常有效。比如，当世界银行对一个国家的贷款达到上限了，不能再贷款了，我们亚投行就补充资金，并由世界银行继续起主导作用，亚投行配合。我说，世行担任指挥，不管我钱出多少，就给我一个位置，我拉小提琴也行，吹黑管或双簧管也行，让我们一起演出一个交响乐，我不跟你争。第二，亚投行愿意跟中资企业合作，但是，我们合作的项目，取决于借款国的需要，不会强迫他们选择和中资机构合作，以两厢情愿为原则。我们和丝路基金合作过，也在和有些中资企业磋商，但是，这都是出于借款国自己的需要。第三点，“一带一路”倡议，跟我们有共同点，都是推动基础设施建设，加强互联互通，但两者是有区别的，否则就不需要有两个倡议了。“一带一路”是国际合作平台，按照中国领导人提出的“共商、共建、共享”的原则进行合作。而亚投行是国际多边合作组织，有其自身的治理架构和运行机制，两者是不一样的。

For these three issues, I made necessary explanations and clarifications on many occasions. First, from the very beginning, AIIB has devoted itself to developing cooperation with multilateral financial institutions and development banks such as the World Bank, ADB, and EBRD, and will never invade the territory of the World Bank. In fact, the cooperation between them is very harmonious and effective. For example, when the World Bank's loan to a country reaches the upper limit and can lender no more, our AIIB will supplement the funds, and the World Bank will continue to play a leading role and the AIIB will cooperate. I said, the World Bank is the conductor (of an orchestra), no matter how much the AIIB funds, just give it a place, it can play the violin, the clarinet, or the oboe - let's perform a symphony together, the AIIB won't fight with the World Bank. Second, the AIIB is willing to cooperate with Chinese-funded enterprises. However, the projects that the two cooperate with must depend on the needs of the borrowing countries, and the borrowing countries are not required to cooperate with Chinese-funded institutions - the principle of mutual consent always holds. The AIIB has cooperated with Silk Road Fund and is also negotiating with some Chinese-funded enterprises, but all of them are based on the needs of the borrowing countries themselves. Third, the BRI has something in common with us (AIIB), which is to promote infrastructure construction and strengthen interconnection, but there are differences between them, otherwise, there would be no need for two initiatives. The BRI is a platform for international cooperation, and cooperation is carried out according to the principle of "extensive consultation, joint contribution, and shared benefits" put forward by the Chinese leadership. The AIIB is an international multilateral cooperation organization with its own governance structure and operation mechanism, which are different (from the BRI).

国际上有些国家及其政界人士，在开始的时候，对我们的疑虑是非常大的，他们也意识到，成立亚投行，在很大程度上，决不是为了简单地搞基础设施，他们很担心对现有国际经济体系的冲击。五年多来，很多问题逐步清晰了，对亚投行的国际多边机构的性质，有了更多了解，我们的运营环境，没有像最初设想的那样艰难，当然我们还得小心谨慎，严格遵守国际多边机构的管理原则。中国要在国际经济秩序中发挥很重要作用，不是光靠成立一个亚投行能解决的。我们只能做一点小小的工作，美国的影响，也绝不是因为它是世界银行的控制者才产生的，拥有世界银行，最多只是一种催化剂。最重要的还是要看，一个国家能够在国际金融领域里起到多大作用，这才是问题关键。

In the beginning, some countries and politicians in the world had great doubts about us. They also realized that the establishment of the AIIB was by no means simply for infrastructure, and they were worried about the impact on the existing international economic system. Over the past five years, many things have gradually become clear, and they have gained a better understanding of the nature of the AIIB as an international multilateral institution. Our operating environment is not as difficult as originally thought. Of course, we have to be careful and strictly abide by the management principles of international multilateral institutions. China's important role in the international economic order cannot be solved by setting up an AIIB alone. We can only do a little bit of work. The influence of the United States is by no means produced because it is the controller of the World Bank. Having the World Bank is only a catalyst at most. The most important thing is how much a role a country can play in the international financial field, which is the key.

人民币国际化的问题，最终取决于中国综合经济实力。有些人有一个误解，好像中国现在是全球第二经济体了；科技相当发达了，在高科技领域，特别是信息技术这方面都领先了；四大银行加起来，资产规模了不得了，国开行和进出口银行在世界各地的资产加起来，超过全世界所有的多边国际开发机构资产加起来的总和，如此等等。是不是就可以说明，中国在国际经济秩序中，理所当然地可以起主导作用了？我们有很多的话语权了？其实并没多少。

The internationalization of RMB ultimately depends on China's comprehensive economic strength. Some people have a misunderstanding. China is now the second economy in the world; China’s science and technology are quite developed, it is leading in high-tech fields, especially information technology; Together, the assets of the country’s four major commercial banks are enormous; the combined assets of China Development Bank and Export-Import Bank of China all over the world exceed the combined assets of all multilateral international development institutions in the world; and so on. Does it mean that China can naturally play a leading role in the international economic order and that we have a lot of power? In fact, not so much.

所以下一步，我们在国际金融领域里发挥什么样的作用，需要央行发挥积极作用，随着中国对外贸易和对外投资的增长，逐步推动人民币的国际结算，进一步加强汇率机制的改革，扩大资本项下的自由兑换。人民币的国际化进程，也需要商业银行、保险公司、证券公司、债券市场和股市等各个方面的综合发展，需要靠我们中国整个金融系统一起努力。 

Therefore, in the next step, what role we play in the international financial field requires the central bank to play an active role. With the growth of China's foreign trade and foreign investment, it shall gradually promote the international settlement in RMB, further strengthen the reform of the RMB’s exchange rate mechanism, and expand the free convertibility under capital accounts. The internationalization of RMB also needs the comprehensive development of commercial banks, insurance companies, securities firms, bond markets, and stock markets, and needs the joint efforts of the entire financial system in China. 

目前，外国投资者在中国股市和债市总的占比大概为5%，外国人在我们的银行资产占2%左右；相比之下，外国投资者在美国股市占35%，债市41%，银行资产占13%，因此是高度开放的。在韩国股市，外资占33%，在印度股市，外国占16%，也比我们多。中国的股市、债市全部加起来，所有证券投资占全世界的1%，在这种情况下，中国要在国际金融领域起到举足轻重的作用，条件是不成熟的。那么关键的步骤，我认为还是要扩大金融部门高水平的开放，开放自然会增强中国的话语权、影响力，当然也会带来更大的风险。那么，如何在风险可控的前提下，进一步扩大开放，这是需要智慧的，这不是简单依靠GDP多少就可以实现的。

At present, the total proportion of foreign investors in China's stock market and the bond market is about 5%, and foreigners account for about 2% of our bank assets; in contrast, foreign investors account for 35% of the US stock market, 41% of the bond market and 13% of the bank assets, so they are highly open. In the South Korean stock market, foreign capital accounts for 33%, and in the Indian stock market, foreign capital accounts for 16%, which is also more than ours. Adding up China's stock market and bond market, investment in securities accounts for 1% of the world's total. Under these circumstances, it is immature that China could play a very important role in the international financial field. Then the key step, I think, is to open up the financial sector at a higher level. Opening up will naturally enhance China's power to speak and influence and certainly, bring greater risks. Then, how to further open up under the premise of controlling risks requires wisdom. This is not something that can be achieved simply based on the GDP.

但是我们具备有利的条件，第一、中国经济规模大，体量大就不容易被颠覆，体量大就有回旋的余地。第二、我们现在管理和应变能力，跟以前相比也在提高。在很多情况下，风险是一种预期，它不是实际的风险，要控制风险的预期。其实，有时候，并没有那么大的风险，但是可能感觉风险很大；有的时候，风险其实很大，感觉不大，正确的判断是极为关键的。随着经济的发展和管理水平的提高，我们对于经济周期波动的容忍度，应该有所提高，没有一定的容忍度，越是急于调整，波动越大。无论是经济增长率还是通胀、汇率，都是如此。 

However, we have favorable conditions. First, China's economy is large, so it is not easy to be subverted, and there is room for maneuver because of its large size. Second, our management and emergency response capabilities have been improving compared with before. In many cases, the risk is an expectation, which is not actual risk, so it is necessary to control the expectation of risk. In fact, sometimes, there is not such a big risk, but it may feel very risky; Sometimes, the risk is really great, but it feels not big, so correct judgment is crucial. With the development of the economy and the improvement of management, our tolerance for economic cycle fluctuation should be improved. Without a certain tolerance, the more anxious we are to adjust (to perceived fluctuations), the greater the fluctuation. This is true of economic growth rate, inflation, and exchange rate. 

举例来说，我们现在外汇储备是多少？三万亿美元？其实不对。用人民币结算的那一部分，就是外汇储备，应该要加进去。比如，我们跟俄罗斯或伊朗的贸易用人民币结算，就避免了动用美元，而且将来更多的东南亚国家和我们的贸易也会用人民币结算。这部分的结算的人民币，怎么不是外汇储备呢？全球七十个央行的外汇储备里面都有人民币了，我们怎么自己反而不算呢？但不是所有的人民币都是外汇储备，只有积极参与国际贸易结算的那一部分人民币才是储备，应当要加上去。2017年，外汇大量流出，当时有个口号叫保三万亿，为什么要保三万亿？为什么是三万亿？而不是二万亿？其实，一旦人民币流出到一定的程度，在浮动汇率的条件下，流入就有了盈利的空间，只要市场是开放的，外汇就会流入。严格控制流出，使得在外已经签订了投资协定的企业无法兑现承诺，无论是对企业、还是对国家、对整体形象、契约精神和公信力，都是有伤害的。只有在极端的情况下，例如1997年的亚洲金融危机，暂时关闭外汇市场，才有必要性。我认为，在开放金融市场的条件下，宏观上的操作，需要有相当的心理承受能力，否则实际效果将适得其反。

For example, what is our foreign exchange reserve now? Three trillion dollars? It's actually wrong. The part settled in RMB should be counted as foreign exchange reserves. For example, if our trade with Russia or Iran is settled in RMB, we will avoid using US dollars, and more Southeast Asian countries will settle their trade with us in RMB in the future. Why isn't this part - the amount settled in RMB - a foreign exchange reserve? Seventy central banks in the world have RMB in their foreign exchange reserves, so why don't we count it ourselves? However, not all RMB is a foreign exchange reserve, and only the part of RMB that actively participates in international trade settlement is a reserve, which should be added (in the counting of foreign reserves). In 2017, a large amount of foreign exchange flowed out. At that time, there was a slogan called "safeguard three trillion dollars." Why should we safeguard three trillion yuan? Why was it three trillion, instead of two trillion? In fact, once RMB flows out to a certain extent, under the condition of floating exchange rate, there will be room for profit for inflows. As long as the market is open, foreign exchange will flow in. The strict control of outflow makes it impossible for the companies that have signed investment agreements abroad to fulfill their promises, which is harmful to companies, countries, (our) overall image, the spirit of contract, and credibility. Only under extreme circumstances, such as the Asian financial crisis in 1997, it should be necessary to temporarily close the foreign exchange market. In my opinion, under the condition of opening up the financial market, it is necessary to have considerable psychological tolerance in macro operation, otherwise, the actual effect will be counterproductive.

所以，对通货膨胀或者通货紧缩，都需要有一个容忍度的问题；不能容忍一定程度的波动，波动将会更大。我们的宏观经济调控，要对偏离常态进行和缓的、稳步的、适度的调控。有风浪才能冲浪，在游泳池里不能冲浪，但游泳池里也会淹死人。所以，风险在很多情况下是一种预期，要对此有正确判断。

Therefore, there is a problem in the tolerance for inflation or deflation; if a certain degree of fluctuation cannot be tolerated, the fluctuation will be even greater. Our macroeconomic regulation and intervention should be gentle, steady, and moderate to manage the deviation from normality. Surfing can only be done when there are winds, you can't surf in the swimming pool, but people do get drown in the swimming pool. Therefore, the risk is an expectation in many cases, and we should make the correct judgment on it.

现在来谈谈亚投行的治理架构和运作理念。首先，亚投行坚持多边主义，但是，其股权结构不同于其他多边机构。股权分配是以GDP为计算基础，股权结构自然就是，亚洲发展中国家成为大股东，发达国家和其他地区作为小股东。区域的股权分配是75%是亚洲，25%是非亚洲。但是，亚洲里边有韩国、新加坡、澳大利亚、新西兰，日本现在还没有进来，亚洲的75%并不都是发展中国家。同样，域外国家并不多是欧洲发达国家，还有拉美和非洲的发展中国家。

Now let's talk about the governance structure and operational philosophy of AIIB. First of all, AIIB adheres to multilateralism, but its shareholding structure is different from other multilateral institutions. Equity distribution is based on GDP, and the equity structure is naturally that Asian developing countries become major shareholders, while developed countries and other regions act as minority shareholders. The regional equity allocation is 75% in Asia and 25% in non-Asia. However, there are South Korea, Singapore, Australia, and New Zealand from Asia in AIIB now, but Japan has not yet entered, and that 75% of Asia is not all developing countries. Similarly, the non-Asia members are not mainly made up by developed countries in Europe, but also developing countries in Latin America and Africa.

其次，亚投行具有广泛的代表性。中国从一开始就诚心诚意地邀请美国、日本和其他发达国家加入。如果只是一些借款的小国加入进来，先不用说评级问题，整个银行高标准的形象就很难支撑起来。我们现在的成员遍及各大洲，遍及有主权国家的各大洲，南极洲不算，南极洲没主权国家，其他都有。按GDP算，中国是最大股东，我们的股份占30%，投票权是26.06%。因为按照国际机构原则，大家分享一点免费的投票权，小国的投票权高于股本，大国投票低于股本。我们当时为了鼓励大家加入，还增加了创始成员票，这两个加起来15%，所以大国的投票权低于股份，而小国的投票权高于股份，这样有利于增强小国的话语权。我们中国的投票权是26.06%。按照章程，通过一般的议题，简单多数，即50%；重大政策、吸收新成员、选举行长，需要特别多数，即三分之二以上的成员，四分之三以上的票数，即75%。亚投行尽量不用投票的方式通过重大事项，努力争取达成一致，以维护团结一致，有事大家商量原则和精神。

Secondly, the AIIB is widely representative. From the very beginning, China sincerely invited the United States, Japan, and other developed countries to join. If only some small borrowing countries joined in, the rating problem aside, it would be difficult to support the high-standard image of the AIIB. Our current membership covers all continents, all continents with sovereign States, except Antarctica, which has no sovereign state, and all others. In terms of GDP, China is the largest shareholder, with 30% of the shares and 26.06% of voting rights. According to the principles widely adopted in international institutions, everyone shares a few free voting rights, and the voting rights of small countries are higher than their shares, while those of big countries are lower than their shares. At that time, in order to encourage everyone to join, we also included Founding Member Votes, the two of which (together with free voting rights) add up to 15% of all votes. Therefore, the voting rights of big countries are lower than their shares, while the voting rights of small countries are higher than their shares, which is conducive to enhancing the voice of small countries. China’s vote is 26.06%. 

According to the articles of agreement, adopting ordinary issues requires a simple majority which is 50%. On major issues, such as recruiting new members and electing the President, it requires a supermajority, that is, more than two-thirds of the members and more than three-quarters of the votes which are 75%. The AIIB tries its best not to decide major issues by votes and instead strives to reach consensus so as to uphold unity and the principle and spirit of broad consultations.

当然，中国拥有实际否决权，这是根据GDP的公式计算出来的，不是中国刻意和强行要求的。对此，其他成员，特别是印度和欧洲国家，不是没有担忧的。但是，欧洲国家和其他发达国家的票数加起来，也可以超过75%，加起来也有集体的否决权，所以，他们认为这是很好的平衡，解决了心头之忧。

Certainly, China has the actual veto power, which is calculated based on a GDP-based formula and is not deliberately or forcibly demanded by China. Other members, especially India and European countries, were not without worries about this. However, the combined votes of European countries and other developed countries can also exceed 75% [this doesn’t appear to make sense, but this is what the available Chinese version says, could be a mistake, more likely 25%?] and they also have veto power as a collective. Therefore, they think that this is a good balance and solves their worries.

亚投行的建立，让我们深刻体会到，制定游戏规则是多么重要。我们以前一直是玩别人制定的游戏规则，有的时候，游戏规则会改一改，当然在国际机构里，不容易那么改。这一次，是中国和亚洲其他发展中国家在一起制定游戏规则，并邀请欧洲等其他发达国家参与。整个过程，平等协商，体现了不同发展程度和阶段的国家之间的一种新型的合作关系。这是一个创举。

The establishment of the AIIB taught us deeply how important it is to make the rules of the game. We used to play the rules of the game made by others. Sometimes, the rules of the game will be changed, but it is not easy to change them in international organizations. This time, China and other developing countries in Asia worked together to formulate the rules of the game and invited other developed countries such as Europe to participate. The whole process, the equal consultation, embodies a new type of cooperative relationship between countries at different levels and stages of development. This is a pioneering work.

我们业务的以亚洲国家为中心，但是，也要顾及域外发展中国家的需求。贷款业务需要扩展到其他地区，这是因为亚洲不可能独善其身，互联互通不限于亚洲自己内部。我们这个银行，跟世界银行是不一样的，任何成员都可以向这个银行借款，没有出资国和受援国之分。当然，欧洲国家是不会来借的，但是，我们就是想建立一个真正意义上的国际多边机构，坚持最佳实践，非政治化。成员国之间的双边矛盾，不要扯到多边机构里来。在中印边境闹冲突的时候，亚投行仍然给印度提供贷款，国内有些人都想不通，怎么我们这边在打架，你们那边还给印度提供贷款？这个问题，跟我们的企业和银行一说，他们都很理解，我们的企业想进去还进不去呢，怎么不可以？再说资金又不是给他们白送的，要还本付息的。也有人认为，你们为什么非要在这个时候给印度提供贷款呢？我怎么知道你们在这个时候打起来呢？我们早就排好了日程，根据项目进度上董事会，双方在这个时候闹起来，我们怎么改？我没法改。在中印边境发生冲突的时候，亚投行管理部门依然坚持按照国际标准办事，在国际上的反响非常正面。这是对亚投行国际机构性质的第一次严峻考验。

Our business focuses on Asian countries, but we should also take into account the needs of developing countries outside the region. The AIIB’s loan business needs to be extended to other regions, because Asia is not isolated, and interconnection is not limited to Asia itself. Our bank is different from the World Bank. Any member can borrow money from this bank, and there is no distinction between a donor country and a recipient country. Of course, European countries won't borrow it, but we just want to establish an international multilateral institution in the true sense, adhere to best practices and be apolitical. Bilateral contradictions among member States should not be dragged into multilateral institutions. When there was a conflict on the border between China and India, the AIIB still offered loans to India. Some people in China couldn't figure it out: why we are fighting here and you (AIIB) are offering loans to India? I told our companies and banks about this, and they all understand it very well. Our enterprises can't get in even if they want to go in, why shouldn’t the AIIB make the loans? Besides, the funds are not given to India for nothing, India has to repay the principal and interest. Some others thought, why do you have to provide loans to India at that time? How did I know you would be fighting at this time? We have long already arranged the schedule. And we went to the Board of Directors according to the progress of the project, at which time, the two sides (China and India) engaged in fighting - how could we (AIIB) change it? I couldn’t change it. When the Sino-Indian border conflict occurred, the management of AIIB still adhered to international standards, and the international response was very positive. This is the first severe test of the nature of AIIB as a multilateral institution.

前不久，我跟德国智库开一个视频会，德国人对此大为惊讶，印度居然在亚投行的贷款总额里占25%，是第一位的借款国。我说，这有什么惊讶的，这不就是国际机构么？我们不能平时讲国际标准，最佳实践，遇到实际问题，就想不通了，另搞一套。一旦失信于人，要挽回声誉是非常困难的。

Not long ago, I held a video conference with a German think tank, which surprised the Germans. India accounts for 25% of the total loans of AIIB and is the No.1 borrower. I said, what's so surprising about this? Isn't this an international institution? We can't talk about international standards and best practices at ordinary times but when we encounter practical problems we lost our thinking and resorted to something else. Once you break your promise, it is very difficult to restore your reputation.

我们现在谈保护环境、应对气候变化、可持续发展。在这个问题上，我们在2017年由董事会批准的“能源战略”里，并没有排除煤电，只是为提供燃煤电厂项目融资设立了一些较为苛刻的条件。实际上，五年来，我们从未做过煤电项目，或者与煤有关的项目。我在去年九月份，一次国际徽商大会上提出，亚投行不做煤电项目或者与燃煤有关的项目，引起了很大反响，国际上特别是欧洲国家，使得亚投行的声誉地大大提高了。这次我在博鳌参加一个圆桌会，那个会上也有外国人，商务部钱克明副部长在发言中提到“一带一路”的项目，他说有个问题挺纠结的，就是输出煤炭技术。有些国家要我们国家帮忙建造煤电厂，但是造煤电厂又有声誉问题，所以感到很纠结。我在发言中介绍，亚投行是不搞煤电的，我们的资金有限，亚投行要起导向性作用，支持可再生能源和可持续发展。会上，我表示，如果中国能够明确宣布“一带一路”不搞煤电，只支持清洁能源，必将大大提高“一带一路”的声誉。

We are now talking about protecting the environment, coping with climate change, and sustainable development. On this issue, in the "Energy Sector Strategy" approved by the Board of Directors in 2017, we did not exclude coal-fired power but set some harsh conditions for financing coal-fired power plant projects. In fact, in the past five years, we have never financed coal-fired power projects or coal-related projects. In September last year (2020), at an international conference for Anhui (a Chinese province) businesspeople, I said that the AIIB would not do coal-fired power projects or projects related to coal burning, which caused great effects. The reputation of the AIIB was greatly enhanced internationally, especially in European countries. Recently, I attended a roundtable in Boao (Hainan), where there were foreigners. Vice Minister Qian Keming of the Ministry of Commerce mentioned BRI projects in his speech, and he said that there was a rather tangled problem, that is, exporting coal technology. Some countries want our country to help build coal-fired power plants, but coal-fired power plants have reputation problems, so China feels very entangled. In my speech, I introduced that the AIIB does not engage in coal power, our funds are limited, the AIIB should play a guiding role - supporting renewable energy and sustainable development. At the meeting, I said that if China can clearly declare that the Belt and Road Initiative will not engage in coal power and only support clean energy, it will greatly enhance the reputation of the BRI.

改革开放后，很长一段时间里，我们中国，更多是当学生，多学习，现在也可以当老师，给别人上课了。但是，全方位地赶超发达国家，还是有一定距离的。所以，我们还是要谦虚一点，谦虚谨慎，这总是没错的。

After the reform and opening up, for a long time in China, we were more like students and learned more (from others). Now we can also be teachers and give lessons to others. However, there is still a certain distance to catch up with developed countries in all directions. Therefore, it is always correct that we should be modest and prudent.

最后，我讲一个比较麻烦的事，又回到刚才开始讲的，经济重心，国际的影响力逐步从美国转移到中国，或者平分秋色。1990年后，美国一家独大，当惯了老大，没有人可以挑战它。现在中国崛起，美国受不了，麻烦会不断。中美之间，还是要合作。我感到，随着中国国力不断壮大，美国最终还得接受中国崛起的现实。当然，这对于美国来说，是一个较为痛苦的过程。我国领导人有句重要的话：大国要有大国的样子。虽然没点名，但意思很清楚，这句话是对有些国家的告诫。我的理解是，这也是对自己的警示。因为我们已经是大国了，我们在跟发达国家，和很多发展中国家的关系上，要有大国的风范和气度，要有大国的样子，这是非常重要的。

Finally, I will talk about a troublesome thing, and return to what I said just now, that is, the economic center of gravity and international influence are gradually transferred from the United States to China, or maybe divided equally. After 1990, the United States became the dominant power and is used to be No.1 where no one could challenge it. Now that China is rising, the United States can't stand it, and troubles will continue. China and the United States still need cooperation. I feel that with China's growing national strength, the United States will eventually have to accept the reality of China's rise. Of course, this is a painful process for the United States. Our leader made an important statement: Big countries should behave in a manner befitting their status (or a big country should look like a big country). Although there was no name-calling, the meaning is clear. This sentence is a warning to some country/countries. My understanding is that this is also a warning to ourselves. Because we are already a big country, it is very important for us to have the demeanor and bearing of a big country in our relations with developed countries and many developing countries.