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23 June, 2017
Hong Kong has become the latest member of the China-backed Asian Infrastructure Investment Bank (AIIB).
Hong Kong will subscribe to 7,651 shares of the AIIB's capital, of which 1,530 are paid-in shares, amounting to about $1.2 billion, payable over five years, and 6,121 are callable shares, the Hong Kong government said.
Hong Kong Financial Secretary Paul Chan said: "The early completion of our accession process demonstrates Hong Kong's readiness to support the operation of the AIIB. As the leading international financial centre, Hong Kong has a sophisticated, robust and highly liquid financial market, and an abundance of top professionals with global experience, coupled with the unique advantage of 'one country, two systems'."
Hong Kong's membership has been flagged since late 2016, said Hong Kong based infrastructure expert Vincent Connor of Pinsent Masons, the law firm behind Out-Law.com.
"Hong Kong joining is significant because of its role as a hub on China's 'belt and road' initiative. It operates as a super-connector between China and the other countries involved, particularly on professional services and project finance," Connor said.
Belt and road, also known as 'one belt one road', is a development strategy that focuses on land and sea based connectivity from China to major markets in Europe, Asia and the Middle East.
The 'belt' refers to land-based routes, with several 'transport corridors' identified to reach key markets in 64 countries, while the 'road' refers to a maritime route through the South China Sea, South Pacific Ocean and Indian Ocean.
The AIIB expects to add 15 more members by the end of this year, according to Chinese news site China Daily.
Membership of the bank currently stands at 70, after thirteen new members were accepted in March.
The AIIB was announced in Beijing in 2014 with the aim of boosting investment in infrastructure in Asia and was established formally by 57 member countries that signed the Articles of Agreement in June 2015. It is expected to have initial capital of close to $100 billion to invest in infrastructure projects and will be financed by individual country contributions proportionate to their economic size.
"By the end of this year, a total of 85 countries and regions will become AIIB's members," AIIB president Jin Liqun told China Daily.
China's belt and road initiative is helping to drive membership of the bank, he said.
"Though the belt and road initiative doesn't cover all AIIB members, we will put more efforts in the future and believe more and more countries will join the AIIB," Jin added.
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
