Pressure is mounting on ministers to review UK membership of a controversial development bank that critics say the Chinese Communist Party has captured for its own propaganda purposes.
Calls to reconsider ties with the Asian Infrastructure Investment Bank (AIIB) grew after Sir Keir Starmer was accused of kowtowing to China’s increasingly authoritarian regime when the PM led a trade delegation to Beijing last week.
Britain is a founding member of the Beijing-based AIIB, pumping more than £2 billion into China’s answer to the US-led World Bank. It mainly funds projects such as roads, bridges and power stations in developing countries, many of them allied to China, the bank’s biggest shareholder.
The bank counts Russia, Iran and Taliban-run Afghanistan among its members.
Fears that the lender is little more than a useful tool of the Chinese state have risen since another Communist Party ‘enforcer’ was appointed unopposed to run the bank.
By contrast, local media praised Zou Jiayi as a ‘tiger-fighting lady general’ with a fearsome reputation for rooting out corruption within China’s elite.
Enforcer: Zou Jiayi leads the controversial UK-backed bank
She started her new role just days before Starmer touched down in the Chinese capital, and her appointment ‘should finally put to rest the comforting fiction that the bank operates as a neutral, apolitical multilateral institution’, said Daniel Wagner, a former senior investment officer at AIIB.
‘Zou’s background is not technocratic, reformist or independent. It is unapologetically political – and firmly embedded in the party’s governing machinery,’ he added. ‘She is an enforcer – just like her predecessor for a decade, Jin Liqun.’
Jin was part of Chairman Mao’s notorious Red Guards paramilitary movement in the late 1960s before he was a banker.
The bank offers Beijing ‘a multilateral veneer that softens political resistance and draws in the capital and legitimacy of advanced democracies’, Wagner said, adding: ‘That’s why the US and Japan chose not to join.’
UK involvement with the AIIB dates back to the bank’s creation in 2015, when David Cameron was keen to court the Chinese as potentially lucrative trade partners while turning a largely blind eye to Beijing’s human rights record.
Britain’s first representative on the board was Danny Alexander, a Treasury Minister in the Prime Minister’s Coalition Government.
Today Chancellor Rachel Reeves sits on the lender’s governing body while its vice-president and corporate secretary is Sir Sherard Cowper-Coles, a former UK diplomat.
But critics say Britain should rethink its role. Sam Goodman of the China Strategic Risks Institute said: ‘It’s an overhang from the golden era a decade ago. We need to see if it still makes sense.’
His view was echoed by Bob Pickard, the AIIB’s former head of global communications.
Zou’s appointment was ‘the culmination of a long politicisation trend’ he said ‘designed to entrench the party’s influence in the bank and extend China’s reach wherever the AIIB lends money’.
He said: ‘A line has been crossed. Some Western governments, including Britain, joined the AIIB a decade ago believing China’s apolitical assurances would apply, even imperfectly. That ideal has been exposed as a delusion.’
Pickard, a Canadian, quit the AIIB in 2023 over Beijing’s growing sway, prompting Canada to suspend its membership.
Zou shot to fame on China’s Central Commission for Discipline Inspection, investigating senior officials, or ‘tigers’. The AIIB said claims of undue Chinese influence misrepresent the bank.
‘We’re a multilateral development bank with more than 100 members, run to global standards,’ said Jeffrey Hiday, its communications chief. ‘We are governed collectively by all of them, including the UK, a founding member.’ The bank helps to plug ‘an enormous global infrastructure funding gap,’ he added.
Britain has resisted pressure from the likes of Lord Alton of Liverpool to quit the bank. But Pickard says Starmer is about to make the same error as previous leaders.
‘Every new Government thinks they can do China better than their predecessor – and they’re always wrong,’ he said, adding that Starmer was ‘a weak leader’ but seemed ‘an excellent follower’.
‘I don’t expect courageous leadership from his government. But I do see more British appeasement of Beijing and looking the other way with a wilful blindness.’
A UK Government spokesman said: ‘The UK uses its position as a founding member of the AIIB to support high-quality infrastructure investment that promotes secure economic growth and creates opportunities for British businesses. We continue to use this to support robust governance and standards at the AIIB, in line with international best practice.’
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