“Responsible Outbound Investment Salon on Global Financial Reform & AIIB” was successfully held in Beijing on June 4, 2015, under the coordination of China Society for World Trade Organization (WTO) Studies and Networking & Collaboration Center for China’s Multinational Business, University of International Business & Economics (UIBE). This salon is the first of a series of salons and was co-organized by Institute of International Economy, UIBE;China Strategy Research Center for Open Economy and International Technology Cooperation (SCOT), UIBE;SynTao Co., Ltd. and WTO Tribune Magazine, MOFCOM. The event was hosted by Center for International Business Ethics (CIBE), UIBE.
 
This salon was emceed by Associate Professor Li Li of Institute of International Economy, UIBE. Liu Baocheng, Director of CIBE introduced the background of the event: this salon is the beginning ofResponsible Outbound Investment Salon Series. In recent years, China has an increasing international influence and bursting outbound investment. How to collaborate with foreign partners under the global circumstances and how to fulfill corporate social responsibility have become unavoidable questions to discuss. Meanwhile, under the historical circumstances, China is gradually switching from a role taker in the global financial market to a role maker. This salon would discuss this process, what impact it will have, and what challenges it will meet. Director Liu proposed the slogan of the salon series: Synergized Innovation, Shared Prosperity. He hoped that these salons would trigger new ideas, new theories and new research. The salons will not be a one way lecture event, but an interaction platform. Our hope is to share valuable perspectives and experience. We need more voices than the sole voice of China. These salons will be an open and comprehensive forum of economic topics. We look for ideas with perspectives and depth. This platform welcomes all suggestion, proposals and criticism. We expect your continual attention and contribution.
Sun Zhenyu, the President of China Society for WTO Studies gave an opening speech. President Sun first congratulated the opening of the Responsible Outbound Investment Salon Series. He thanked Professor Liu Baocheng for his proposal and the leaders of UIBE for their reliable support for this event. He also thanked all the guests who attended the salon for their contribution. President Sun then briefly explained four reasons that China’s establishment of AIIB is necessary: first, as a major developing country, China has mission and responsibility to put forward reforms, as history intends. According to the report by ADB, by 2020 the infrastructure demand of Asia will be about 8 trillion dollars, but by far the World Bank, IMF, ADP and other investment banks are far from meeting the demand. Second, in the past three decades, China has accumulated huge amount of foreign reserves. It is reasonable to put part of these foreign reserves in AIIB and finance the infrastructure need of Asia. Third, it is necessary to internationalize RMB and therefore reduce the risk brought by the dominance of U.S dollar. When more countries start to use RMB through AIIB, the process of promoting RMB as an international reserve currency will be accelerated. It will be an important step that at the end of this year RMB will enter the IMF basket. Finally, the delay of the IMF reforms on quota and administration at the end of 2011 is also an important factor that makes China consider something different.
Professor Hilton Root, from School of Policy, Government, and International Affairs, George Mason University made the keynote speech. Professor Root’s speech was mainly about the challenges that AIIB will likely meet. These are the challenges that not only AIIB, but every international investment bank meets frequently. China should be prepared to cope with these problems. For example: under the current economic circumstances, one infrastructure project often affects several countries and regions. Sometimes the end users of a project live even outside the country (As in the case of Kenya’s canal mentioned by Professor Root, the main beneficiaries of the canal are Uganda and Europe). How to write a contract under such situations will be a great challenge. There’s also another issue: There are often tensions between the borrowers, including India, Pakistan, Indonesia and China, and the donors upon some conditionality on the governance and administration of projects. From the view of these borrowers, the restrictions are too much of interference. But from the view of the donors, these criteria are just part of the responsibility of a bank. These international institutions, they are fundamentally self-financing banks and they have to make sure that they make loans to reliable borrowers and that the money will be used properly. China hopes to help with infrastructure while keeping itself clear from politics. However, this is not possible because the infrastructure choice of a country is political. How China will perform its duty while not entering into politics will also be a big challenge.
 
Robert Koepp, Director of Beijing Corporate Network Economist Group，Huo Jianguo, Vice President of China Society for World Trade Organization Studies, Xia Youfu，Executive Director and chief expert of SCOT, UIBE participated in the panel discussion. Mr. Koepp agrees with the notion that AIIB needs to improve on administration, transparency and governance, but he thinks United States should join and lead the reform from within instead of staying out and criticize. Mr. Koepp did a comprehensive analysis through The Economist Magazine on the risk that AIIB would face in different investment regions. He thinks that AIIB should analyze the risks more thoroughly. Mr. Huo Jianguo thinks that the establishment of AIIB and the policy of One Belt One Road are good not only for China, but for the region of Asia and the entire world. AIIB will not fully copy the structure of existing institutions like the World Bank. It will make some innovations with Chinese characteristics. Professor Xia Youfu thinks that the foundation of AIIB met too many obstacles from United States. AIIB is not a bank of China. It will be a truly internationalized institution and it considers the benefit of all members. The focus of AIIB will be solely on infrastructure. AIIB will be the start and the symbol of international financial reform.
Finally, the event ended in the fervent discussion between our guests and audience.
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