The Asian Infrastructure Investment Bank in a Fracturing Multilateral System

In April last year, the World Bank and International Monetary Fund (IMF) held their Spring Meetings in Washington, D.C., convening bank officials, finance ministers, policymakers, and the broad spectrum of ‘bank-watchers’ who orbit the Bretton Woods institutions. The mood was uneasy. Just weeks before, President Donald Trump had launched his ‘Day of Liberation,’ igniting a chaotic series of tariff announcements and reversals that rattled markets and governments alike. Attendees were waiting for U.S. Treasury Secretary Scott Bessent to announce the Trump administration’s intentions. Would the United States, long the lead shareholder of the World Bank and other multilateral development banks (MDBs), pull back from the system it had helped create?

In his speech, Bessent did not threaten a complete withdrawal as some had feared. But he made clear that Washington would challenge what it sees as “mission creep” on the part of the Bank into issues such as climate change, gender, and social inclusion. The World Bank, he said, “should no longer expect blank checks for vapid, buzzword-centric marketing.” His message was clear: multilateral development cooperation would need to mold itself to President Trump’s “America First” agenda.

Four months later, a very different mood prevailed in Beijing, where the China-led Asian Infrastructure Investment Bank (AIIB) held its tenth annual meeting. Chinese Premier Li Qiang attended the opening ceremony, fresh off the heels of Summer Davos in Tianjin, where he had calmly exhorted the audience that “economic globalization will not be reversed.” At the AIIB gathering, he praised the bank as a model of multilateral cooperation and urged it to continue acting as a “truly international, rule-based, and high-standard institution.” He also called for greater synergy with China’s Belt and Road Initiative and Global Development Initiative.

As historian Adam Tooze observed, the contrast between the global turmoil wrought by the United States under Trump and the “mood of calm progress exuded by Beijing” was striking. The irony is that when President Xi Jinping first initiated the AIIB in 2013, Western officials immediately interpreted the move as a disruptive gambit by China to rival the World Bank and upend the international geoeconomic order. The Obama administration lobbied its allies not to join, warning that a China-led bank would dilute environmental, social, and governance standards.

China responded with careful reassurance. Chinese negotiators reduced China’s voting share to temper fears of unilateral influence (though it still retains formal veto power in the bank), pledged adherence to ‘international standards,’ and recruited veterans from legacy MDBs to craft the AIIB’s safeguards and other policies. Despite initial U.S. resistance, several U.S. allies joined the 57 founding members. Today, the AIIB has 110 member states, second only to the World Bank in membership size among the MDBs.

In its first decade, the AIIB has financed roughly $70 billion in over 300 projects. While originally framed as an infrastructure bank for Asia, it has expanded lending in Africa and Latin America and ventured into ‘social infrastructure’ such as health and education. It has branded itself as a green bank, setting and surpassing a target of allocating 50 percent of financing to climate-related projects. It participates regularly alongside its legacy peer institutions in G20 processes, United Nations climate talks, and joint MDB working groups on climate finance and other policy areas.

The AIIB has also met its fair share of criticism and controversy. Civil society organizations argue that loopholes remain in its environmental and social safeguard policies. Its accountability mechanism has yet to register a single complaint from project-affected communities, which advocates see as evidence of dysfunction. In 2023, the bank weathered a public scandal when its communications lead resigned, publicly alleging covert influence by Chinese Communist Party (CCP) officials. The AIIB investigated and rejected these claims, but the episode underscored the political scrutiny the institution continues to face.

For over a decade, the AIIB’s public face has been its founding president, Jin Liqun—a former vice minister in China’s Ministry of Finance who had previous roles in the World Bank’s board of directors, the Asian Development Bank (ADB), and China’s sovereign wealth fund. Jin has been an animating force of the bank’s vision, deftly navigating between Beijing’s global ambitions and the Western-dominated landscape of international financial institutions. In January of this year, Jin handed the reins to Zou Jiayi. Zou is another former vice minister of finance and World Bank board representative, but with deeper ties to the CCP machinery, having held high-level roles in the party’s anti-corruption arm and political advisory body. Zou, for her part, has pledged continuity and partnership, calling multilateral cooperation an “economic imperative.”

Zou assumes her new position in a challenging moment. Developing countries are grappling with debt distress amid higher borrowing costs, declining development assistance, and economic turbulence. The Trump administration has undertaken a sweeping review of U.S. support for international organizations, withdrawing from more than sixty treaties and bodies and seeking to reorient multilateralism away from what it derides as progressive and elitist orthodoxy. Although the World Bank and IMF have been spared wholesale withdrawal, climate cooperation has been hit particularly hard with the U.S. exiting multiple global climate accords.

What does this mean for the AIIB? It is often argued that the chaos of the Trump administration and its contempt for U.S. allies work to the benefit of China. China has indeed mounted a diplomatic offensive, presenting itself as a more reliable partner in a time of U.S. unpredictability, especially on economic affairs.

It would be too simplistic, however, to say that Trump’s attacks on multilateralism automatically cede power to China, and the AIIB by extension. Such a zero-sum framing fails to account for the AIIB’s institutional DNA. The bank was never designed to replace the World Bank as a parallel alternative. Rather, it was deliberately conceived as ‘lean’ and efficient, with 700 staff headquartered in Beijing compared with the World Bank’s sprawling global footprint of 20,000 employees. Its overseas operational presence consists of a regional hub in Abu Dhabi and another planned in Hong Kong, compared with the World Bank’s network of more than 100 offices in member countries. The AIIB also lacks concessional financing instruments, which allow the World Bank to support the lowest-income developing countries.

The AIIB’s efficiency depends on working within and through the existing system of development institutions, reflected in its emphasis on global partnerships. Over a third of its portfolio continues to be co-financed and led by other MDBs, relying on partner institutions for joint due diligence. In recent years, MDBs have sought to work more collaboratively to meet ambitious climate and development finance targets. In one example of such measures, the AIIB provided a $1 billion guarantee for the World Bank’s sovereign loans to alleviate capital constraints. The AIIB is now in talks with the ADB and Inter-American Development Bank for similar risk-sharing deals.

Interdependence complicates any interpretation of the AIIB as an arm of China amid great power rivalry. The AIIB has staked not only its image but also its organizational mandate on the MDB system. Any weakening of that system by attacks from the Trump administration or other factors will affect the AIIB’s ability to maximize its impact and influence.

For now, the United States remains a committed shareholder in the MDBs even as it presses for ideological realignment. As the Trump administration pushes a ‘tech-neutral’ and pro-fossil fuel agenda on the World Bank, climate advocates have raised red flags about the MDBs’ expanding financing for natural gas development. But other member states at the World Bank have pushed back against wholesale policy reversals, showing that the U.S. will does not unilaterally determine the fate of these institutions. Still, a reshaping of the international order is underway, placing severe geopolitical and economic stress on multilateral development finance. How the AIIB navigates these shifts in its second decade, and with what effects for China’s claims to global leadership, remain to be seen.

Andrea Zhu is a PhD candidate in sociology at UC Los Angeles and a 2025–26 IGCC dissertation fellow.

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