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DEFINITION of 'Asian Infrastructure Investment Bank (AIIB)'

The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China to provide financing for infrastructure projects in Asia. It is slated to begin operation by the end of 2015.

BREAKING DOWN 'Asian Infrastructure Investment Bank (AIIB)'

China's leader Xi Jinping first proposed an Asian infrastructure bank at an APEC summit in Bali in 2013. Many observers have interpreted the project as a challenge to international lending bodies that are seen as reflecting American foreign policy interests, such as the International Monetary Fund (IMF), the World Bank and the Asian Development Bank. That China may control half of the bank's voting shares contributes to the perception that the AIIB will be an arm of Chinese soft power. The U.S. has questioned the bank's governing standards and its social and environmental safeguards, perhaps pressuring allies not to apply for membership. Yet despite American objections, around half of NATO has signed on, as well as nearly every large Asian country, with the exception of Japan. The result is widely seen as a sign of China's growing international clout at the expensive of the U.S.

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