The Asian Infrastructure Investment Bank’s minority shareholders won’t be mistreated by China, Australia’s Treasurer Joe Hockey said, after documents showed the host nation will have veto power in the $100 billion lender.
“We’re satisfied that when it comes to issues like ensuring that minority shareholders are not oppressed, there are protections now in place,” Hockey said in a Bloomberg Television interview in Hong Kong on Tuesday, a day after signing Australia up as the bank’s sixth-largest shareholder.
President Xi Jinping is using the creation of the 57-member-nation bank to augment his “New Silk Road” trade initiative and expand the country’s diplomatic influence. China, with its 26.06 percent of voting rights, will be able to exercise veto power on decisions including election of the AIIB’s president and determining reserves, according to the articles of agreement released by the Ministry of Finance.
“China has around a quarter of the votes,” Hockey said. “Should the United States and Japan come in at a later stage -- and I’ve been given reassurances that they’d be welcomed into the AIIB -- if that were to happen, then their shareholding would be further diluted.”
Australia’s most-important ally, the U.S., has declined to join the bank after expressing unease over its governance and transparency.
China is the biggest shareholder with its initial capital subscription of $29.8 billion. India, Russia, Germany and South Korea round out the top five, with Australia contributing A$930 million ($713 million) of initial paid-in capital.
Australia, entering its 25th year without recession, is in sound economic health, Hockey said, even as analysis released this month by PricewaterhouseCoopers LLP showed the economy in more than a third of the country is contracting.
“We have the capacity to do what is necessary to keep the Australian economy going through a record run,” he said. “We’ve got good job creation. We still want to get the unemployment rate down.”
Hockey said he “expects” the Liberal-National coalition government to serve its full term before going to the ballot boxes next year, after improving opinion polls sparked media speculation Prime Minister Tony Abbott may hold an early election.
“You work really hard in opposition to get into government and you don’t hand away the keys to government too early,” he said.
For more, read this QuickTake: China’s World Bank