LONDON — Beijing’s answer to the World Bank plans to set up its first European office in London this year as the Trump administration takes a tough stance on China.
The Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) — established in 2013 alongside China’s Belt and Road Initiative — aims to use the new London office to draw in funding to support the bank’s global development projects, two people familiar with the plans told POLITICO.
The move could be highly controversial. British Prime Minister Keir Starmer has worked to reset relations with Chinese President Xi Jinping since coming to power a year ago. A trade deal struck with the U.S. last month, however, has provisions that could pressure London to curb its trade with Beijing, amid Donald Trump’s ongoing trade war with the global power.
“I doubt the Trump administration will take kindly to the establishment of an AIIB hub in London given the pressure it has already put on the U.K. to align with the U.S. against China on trade issues,” said William Matthews, a senior research fellow at Chatham House specializing in China.
AIIB firmly disputes characterizations that it is a vehicle for the Belt and Road Initiative (BRI), China’s state-run global infrastructure and investment scheme. BRI is modeled on the old “Silk Road” as part of a push to establish trade routes between Asia, Europe and Africa, but critics see it as a tool to advance Beijing’s foreign policy objectives.
A spokesperson for the bank acknowledged “some of [its] projects may happen to be identified by our clients as projects related to BRI — but first and foremost those projects were presented to us for financing by our clients, not by the Chinese government.”
Why London?
The AIIB’s London hub is expected to open before the end of the year, staffed up with five to 10 employees as the bank hunts for private investors to support its global lending projects, the two people granted anonymity to discuss the project said.
London’s banking and asset management credentials, deep pools of capital, and time zone between North America and Asia makes it a bridge between investors in the West and the East, both people said.
London won out against other contender cities in Europe like Frankfurt, Luxembourg and Paris because it is “closer tied into financial markets” and other key time zones, the second person said.
“We are exploring options for potentially opening a small number of additional hub offices in Asia and elsewhere — including Europe — but have not yet made any final decisions,” said an AIIB spokesperson. New offices are also expected to be set up in Singapore and Hong Kong.
Speaking at a U.K.-China investor forum in London in December, the bank’s president and chairman, Jin Liqun, said there was “no indication whatsoever” that London’s standing as a global financial center has been eroded in light of Brexit.
While the City’s “comparative advantage” in financial services hasn’t waned, Jin said, setting up a European office “depends on the negotiation with the competing candidate cities.”
Weeks earlier, Jin met with U.K. Chancellor Rachel Reeves at No. 11 Downing Street to discuss the plans. A photo of Reeves standing with Jin, flanked by senior Treasury officials and AIIB staff, was shared on social media.
The Treasury later rejected a freedom of information request from POLITICO seeking minutes from the meeting, citing potential damage to Britain’s international relations.
“It is extremely important that HM Treasury, and the United Kingdom, maintain a positive relationship with the AIIB and release of information linked to the meeting would be likely to prejudice this good relationship,” the Treasury said.
The U.K. was one of the multilateral bank’s founding members under Prime Minister David Cameron during the “Golden Era” of U.K-China relations.
“The U.K. uses its position as a founding member of the AIIB to support high-quality infrastructure investment that promotes secure economic growth,” a Treasury spokesperson said.
Britain has “expressed interest in hosting a hub office,” the AIIB spokesperson said.
Beijing’s influence
Jin, an Anglophile who studied Shakespeare before pursuing economics at Boston University — and whose daughter now teaches at the London School of Economics — is overseeing the London expansion as he prepares to step down, with AIIB set to mark its first decade in operation. The bank’s members are due to vote on a new president at their annual conference in Beijing on June 24.
China, the bank’s largest shareholder with 27 percent of voting rights, has nominated China’s former Vice Finance Minister, Zou Jiayi, as Jin’s successor. She recently served as deputy secretary-general of the Chinese Communist Party’s top political advisory body, which decides major policy positions.
The U.K. has a nearly three percent vote share. India, Russia, Germany, South Korea and Australia are larger shareholders among the 110 member states that make up what experts bill as China’s answer to the Washington-dominated World Bank.
Zou’s nomination has reignited long-running concerns about Beijing’s influence over the bank’s governance.
“I believe AIIB is a PRC influence operation in terms of the impact of the bank and its lending practices,” Bob Pickard, the AIIB’s former Director of Communications, told POLITICO.
Pickard abruptly resigned in June 2023 after 15 months at the bank, publicly alleging that “CCP members wield power in many key positions” inside the institution. Canada suspended its participation in AIIB days later, and its investigation into Pickard’s claims remains ongoing two years later.
The AIIB denied Pickard’s allegations with an internal review quickly finding “no evidence of undue influence on decisions taken by the Board of Directors or Management.”
“President Jin has consistently and firmly stated that AIIB is an independent, multilateral institution — governed by its members and not beholden to any one shareholder, including China,” said AIIB’s spokesperson.
“Alignment with any single country’s national policies, including China’s, would be inconsistent with the Bank’s multilateral nature and founding principles,” they said.
“The bank’s decision-making — on everything from project approvals to leadership appointments — requires broad consensus, including a 75% supermajority for critical matters. That is sometimes thought of as a Chinese veto — but it is also the case the OECD countries collectively hold a de facto veto,” the spokesperson added.
Others dispute the narrative of creeping CCP control. “Until a couple of years ago, there was not a single Belt and Road Initiative project approved. Not one. The Chinese companies were very livid about it,” said Joerg Wuttke, the former president of the EU Chamber of Commerce in China and now a partner at consultancy firm DGA-Albright Stonebridge Group.
Allegations of CPP involvement have been “completely blown out of perspective,” he said. AIIB President Jin has managed “to keep it away from politicizing projects” and also “kept AIIB out of the reach of [China’s] State Owned Enterprises.”
Belt and Road links
However, AIIB’s funding for infrastructure projects globally “buttresses the overall impact of the [Belt and Road Initiative] by lending multilateral respectability to the adjacent lending in countries of priority interest to China,” Pickard said.
He points to the bank’s $5 billion pledge for infrastructure projects in Vietnam as being “almost like a blank check” last year. “This is at a critical moment where Vietnam is trying to figure out, should we lean to Washington, or should we lean to Beijing?” he said.
AIIB’s recent lending record also shows projects linked to the BRI. At the global climate conference in Azerbaijan last year, the bank signed a $160 million agreement to finance two solar plants. In April, Azerbaijan and China signed a Strategic Partnership declaration with Azerbaijani President Ilham Aliyev, who touted the benefits of the BRI.
Belt and Road beneficiary Turkey, received a $150 million loan from AIIB last year to support a major highway, while Kazakhstan — where Xi first launched BRI in 2013 — received a $47 million loan for a major wind farm in 2019.
“China, although precluded from using the AIIB directly as a tool to fulfill its ambitious BRI agenda, is using the bank as leverage in pushing forward the BRI,” writes Yu Hong, a senior research fellow at the East Asian Institute at the National University of Singapore in a 2024 book on the BRI.
It is “not an exaggeration,” Yu writes, “to claim that the AIIB is intended to project China’s influence in Asia and beyond, and thereby to facilitate the BRI’s implementation.”
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“There’s quite a lot of infrastructure financing that goes through London,” said a senior British business representative with a background in finance who knows AIIB’s president. “The benefit for the AIIB is that they would probably see more international deal flow.”
The White House’s “concern will be more about the U.K. picking sides and exposure to CCP influence,” said Chatham House’s senior China research fellow Matthews. As China continues to grow in power, he adds, the U.K. “should be making decisions based on its own long-term national interest even if that causes friction with the U.S.”
Britain’s ongoing membership in the AIIB “at least allows it some influence over how the bank develops,” Matthews said. “An essential part of this is clear-eyed awareness of the nature of the Chinese Communist Party and how it projects influence, including within the AIIB, and pushing back on this where necessary.”
“The real big picture question for the U.K. is not the short-term political impact on the Labour government’s China policy versus relations with the Trump administration,” Matthews explains, “but the long-term strategic challenge of maintaining economic and geopolitical relevance in a world where China is increasingly influential.”
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