AIIB, a paradigm power shift

"There will be cooperation and also some healthy competition with the ADB and the World Bank."

Good for Asia; good for the world as a whole.

Jin Liqun, secretary general of the interim secretariat of the AIIB, regards the bank as a complement to, rather than a substitute for, the World Bank and the ADB. It will improve the existing international financial system, not overturn it, Jin said.

The AIIB is just the start. Jim O'Neil, coiner of the BRICs acronym and former chairman of Goldman Sachs Asset Management, believes there are plenty more areas where China needs to be drawn in.

With its Belt and Road initiatives, the AIIB and other entities (a joint development bank with BRICs partners Brazil, Russia, India and South Africa, for example) China is trying to make its own development beneficial to the whole continent.

After over three decades of fast expansion, benefiting from globalization and opening-up, China can now share the fruits of its development and build a "community of common destiny" through international and regional cooperation.

Into the unknown

Even after membership is finalized, many questions will remain. How will the AIIB be governed? What will be the decision-making process be? What lending criteria will it adopt? Will its policies be transparent and address issues like the environment?

The answers to those questions will determine whether the bank stands or falls.

While details are pending, China has repeatedly stated that the AIIB will uphold high standards and learn from the best practices at existing multilateral financial institutions.

During an interview with Xinhua, Lou Jiwei said the bank will have a three-tier structure -- a council, a board of directors and management, as well as a supervising mechanism to ensure sufficient, open and transparent policy-making.

The prime challenge for the AIIB is how to channel funds to the most productive projects while maintaining security of repayment.

Zhang Yuyan, chief of the institute of world economics and politics at the Chinese Academy of Social Sciences, a government think tank, believes that, since infrastructure projects usually have long funding cycles and great potential for waste, sustainable profitability will be the real test of the AIIB.

Rigorous consultation and skillful management to coordinate and balance various demands and interests among members will be of the essence, Zhang said. This will be challenging at the very least, with so many histories, cultures and development stages on show.