Germany sticks with Chinese rival to World Bank

The move signals divergence within the Group of Seven nations

Berlin has announced plans to keep supporting the Asian Infrastructure Investment Bank (AIIB), a Chinese state-backed financial development lender. This comes in contrast to G7 partner Canada’s move to freeze ties with the institution over concerns about Beijing’s influence within it.

The announcement was made shortly after a Sunday meeting between German Finance Minister Christian Lindner and Chinese Vice Premier He Lifeng in Frankfurt.

In June, Lindner’s Canadian counterpart, Chrystia Freeland, said that Ottawa had decided to freeze all ties with the financial institution until further government review. The move occurred due to claims of widespread “communist dominance” within the AIIB by a former Canadian top executive at the bank.

The AIIB, launched in 2015 as an alternative to the Western-dominated IMF and the World Bank, has denied the allegations.

According to a joint statement released after the Frankfurt summit,  Germany, one of the AIIB’s founding members, would “continue strengthening coordination” with China in the financial field and expand two-way market opening based on fair competition.

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The parties have also expressed their dedication to enabling the AIIB to better serve the sustainable development needs of its member countries. Moreover, Berlin and Beijing pledged to ensure that the development bank operates by international standards and becomes an institution integrated into the global financial architecture.

The AIIB, currently the world’s second-largest multilateral development institution, has so far admitted 109 nations from all continents as members.

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