Discover more from Pekingnology
The Curious Case of Asian Infrastructure Investment Bank; And a Purported Rule of the Highest Court
Few noticed the Beijing-headquartered bank announced a $750-million loan to Delhi right after the deadly border clash. Nor did Chinese courts realize they were quoting a non-existent rule.
The Asian Infrastructure Investment Bank will likely be thrust into spotlight tomorrow, when President Xi Jinping will address the Opening Ceremony for the bank’s 2020 Annual Meeting, its fifth since the Bank began operations on January 16, 2016. Numbers that end in five or zero are usually more important in the Chinese political calendar. For example, on those anniversaries of the founding of the People’s Republic of China, military parades usually proceed on the Avenue of Eternal Peace.
Founded by 57 members, AIIB has since grown to 102 members from around the world. To date, AIIB’s President and Board of Directors have approved up to $19.6 billion for 87 projects in 24 economies.
Most of AIIB's loans came with little fanfare and don’t get much media attention, including one on June 17, when AIIB announced it has approved a $750-million loan to India to assist the government to strengthen its response to the adverse impacts of the COVID-19 pandemic on millions of poor and vulnerable households.
That is, one day after India reported its heavy casualties in the border clash with China.
The timing might be a total coincidence, as the AIIB Board meeting that approved the loan was held on June 16, and for $750-million a lot of work must have been done well ahead.
But what is also interesting is that from Reuters, The Hindu, Press Trust of India (via The Hindustan Times), The Economic Times, NDTV to India Today (three days later on June 20, when more details in the border clash had emerged), immediate media reports of the AIIB loan didn't even bother to mention the deadly border clash or the unprecedentedly tense China-India relations in background.
Nor has the AIIB loan made prominently into the numerous contentious reports, analysis, and opinions on the China-India relations in the following weeks, except the Aam Aadmi Party leader Sanjay Singh’s brought it up a full two weeks after the border clash.
Against the background that any international news coming out of Beijing is scrutinized under the microscope these days, the characteristics of both countries, including their media outlets - and, in particular, the high tensions, it seems very remarkable that everyone appears to have been able to compartmentalize the issue.
There aren’t many explanations to the compartmentalization, except that it’s as if AIIB loans are now viewed, universally, as apolitical to the point that even a deadly conflict between the two countries wouldn’t make the loan newsworthy.
To be sure, Article 31 of the Articles of Agreement of the AIIB asks for zero national and international politics in its operation:
The Bank, its President, officers and staff shall not interfere in the political affairs of any member, nor shall they be influenced in their decisions by the political character of the member concerned. Only economic considerations shall be relevant to their decisions. Such considerations shall be weighed impartially in order to achieve and carry out the purpose and functions of the Bank.
The President, officers and staff of the Bank, in the discharge of their offices, owe their duty entirely to the Bank and to no other authority.
But of course the question has always been whether that would become true. In this regard, no news is very good news for the AIIB: there have been few if any serious accounts questioning if politics played a role in its loans.
Knee-jerk reactions to AIIB’s loans of course happen, but facts paint a picture where the loans can hardly be described as tilted towards Beijing’s favor.
In these five years, China got three, totaling $1.105 billion: Beijing Air Quality Improvement and Coal Replacement for $250 million, a Beijing-Tianjin-Hebei Low Carbon Energy Transition and Air Quality Improvement Project for $500 million and the most recent Emergency Assistance to China Public Health Infrastructure Project for $355 million in the context of COVID-19.
For India, AIIB has approved 27 projects totaling $8.5685 billion, including two recent ones: $740-million COVID-19 Active Response and Expenditure Support (CARES) and $500-million COVID-19 Emergency Response and Health Systems Preparedness Project.
Pakistan, India's archrival and China's all-weather friend but smaller in size, has got funding for six approved projects totaling $1.26 billion, plus a special fund (grants to support and facilitate the preparation of projects to be financed by AIIB) of half a million dollars.
For another comparison, Russia, China's most important geopolitical partner these days, so far has got only one $500 million loan for Transport Sector Investment, while Georgia, much smaller in size and still involved in serious disputes with Russia, has got four loans totaling $364 million.
In other words, the prediction of a Chinese hegemony, which led the Obama administration to begin a rear-guard battle to minimize the bank’s influence that left the U.S. and Japan on the outside, didn’t materialize.
Jin Liqun, a well-respected former official at China's Finance Ministry according to The Wall Street Journal and seems prepared to maneuver in the treacherous terrain between Beijing and Washington according to a profile on The New York Times, is running unchallenged in the AIIB’s 2020 Presidential Election. That is further evidence that member countries aren’t unhappy with the bank under his leadership.
Against the international politics today, also worth recalling is that it was merely five years ago that China managed to persuade major U.S. allies including Australia and South Korea in the Asia Pacific and almost half of the EU (including the U.K., France, and Germany) to join as founding members. Canada joined in 2017.
Thomas Renard, a Senior Fellow with the Belgian Egmont Institute, wrote in a security policy brief in April 2015 that The AIIB is perhaps China’s largest soft power success so far. More than five years later, that still rings true.
Five years is just a drop in the stream of time, and a lot has happened since. If there is any geopolitical lesson here, it should be that Beijing has been proven capable of founding and headquartering a multinational development bank whose operation could have so easily been politicized but so far hasn’t.
The real art of the deal would be to sustain that indefinitely - it is only with concrete achievements like this can others be persuaded that Beijing could indeed provide global leadership and public good impartially.
Some Chinese courts, including a few High People’s Courts - the highest court in a province, usually around the same size to a European Union member state - have been citing in their judgments a rule ostensibly from the Supreme People’s Court (SPC).
That rule, known as Opinions of the Supreme People's Court on the Handling of Several Procedural Issues in the Trial of Civil Dispute Cases Involving Criminal Offences 最高人民法院关于审理民事纠纷案件中涉及刑事犯罪若干程序问题的处理意见, turns out to be non-existent, according to a recent WeChat post attributed to Jiang Yifan 蒋一凡, likely a Chinese lawyer based in Shenzhen City, Guangdong Province.
Chinese courts are asked to publish their rulings as much as possible - subject to some exceptions - in a centralized database called China Judgments Online 中国裁判文书网, which makes studies of Chinese court cases much easier than otherwise.
Jiang wrote in the post that based on his/her research, including searches within China Judgements Online, provincial High People’s Courts in Sichuan, Hubei, Anhui, Heilongjiang, Jilin, and Gansu all published judgments citing the rule in recent years - totally unaware the rule was not real.
In fact, Jiang wrote, the SPC itself has said it had never issued that rule. In 2018, the SPC said in a judgment that “the legal basis cited (by the plaintiff) is Article 2 of the Supreme People's Court's Opinions on the Handling of Certain Procedural Issues Involving Criminal Offences in the Trial of Civil Dispute Cases. This court has never issued the Opinions, so the legal basis cited does not exist."
Jiang further found out the purported SPC Opinions are the same as the Opinions of the Shanghai Higher People's Court on the Handling of Several Procedural Issues in Hearing Civil Dispute Cases Involving Criminal Offences, dated December 18, 2007.
In other words, somehow some Chinese courts and legal professionals (there are quite some essays quoting or studying the purported SPC Opinion as well) mistook a 2007 rule by the Shanghai Higher People’s Court for one by the SPC, which would make it of at least for reference to the entirety of the Chinese mainland. (The Chinese legal system, similar to the civil law or continental legal system, is boundless by precedent, despite an increasing degree of precedent - particularly seen in the SPC - creeping into jurisprudence.)
It’s impossible to know for certain how this happened - who made the first mistake and how that mistake then misled many others. In Jiang’s views, the reason behind this is likely two-fold. First, it’s likely that Chinese courts have not established a unified, reliable knowledge base of real, applicable rules - the opinions and guidelines that are actually applicable or for reference, leaving judges and legal professionals to resort to less than reliable legal sources.
Second is the crowding out of reliable sources such as the China Judgments Online and other, authoritative sources of legal information by the increasing number of for-profit platforms providing legal information. These platforms, and the dominant search engine Baidu which provides a pathway to these platforms, lack proper quality controls, Jiang wrote.
Whatever reason behind this, Jiang wrote, that such purported Opinions, whose existence had been denied by the Supreme People's Court, appears openly and formally in the rulings of the Higher People's Courts in many places, and has been repeatedly analyzed and studied, must ring serious alarms.
And a bit personal news at the end: I failed to update this Pekingnology newsletter last week partly because I was finishing my 31 months in Brussels and was in the process of moving back to the Chinese city of Jinan, capital of the eastern Shandong province.
At this particular moment, I’m savoring the famed crumbled flatbread in mutton soup 羊肉泡馍 in a hotel room in the city of Xi’an, where flights from Brussels to Beijing now land and passengers are quarantined before being allowed to continue their journeys. I won’t be able to step out for 14 days, but I can assure you the food here, as everyone says, is quite good.
Thank you for reading.