February 22, 2024

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Canada freezes its activities in the "China World Bank" after allegations of infiltration

Canada freezes its activities in the “China World Bank” after allegations of infiltration

Canada has frozen all activities at the multilateral lender known as China International Bank after a senior official resigned, alleging that the institution was run by members of the Communist Party “acting as an internal secret police”.

Bob Picard, Canadian general manager for communications at the Beijing-based Asian Infrastructure Investment Bank, said he traveled to Tokyo on Wednesday because he feared for his safety after raising concerns about what he claimed was party infiltration of the lender.

The controversy, which highlights tensions in multilateral institutions trying to bridge the growing divide between China and the West, prompted an immediate response from Ottawa.

“The Government of Canada will immediately cease all government-led activities at the Bank,” said Chrystia Freeland, Canada’s Minister of Finance and Deputy Prime Minister. Freeland added that it had begun reviewing the allegations and Canada’s “involvement” with the Asian Infrastructure Investment Bank.

The uproar erupted after Picard wrote on Twitter that “as a patriot of Canada”, his only course of action was to resign and leave Beijing.

“These people are like an invisible government inside a bank and that’s what I can’t be a part of,” Picard told the Financial Times from Tokyo. “I don’t want to be a useful idiot.”

AIIB said in a statement that Picard’s “recent public comments and characterization of the bank are unfounded and disappointing.”

The AIIB said: “We are proud of our multilateral mission and have a diverse international team representing 65 nationalities and different members of the AIIB, serving our 106 members worldwide, many of whom have been with us since our formation in 2016.”

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The charges challenge efforts by the AIIB and its president, former Chinese vice finance minister Jin Liqun, to present the bank, which was founded in 2016, as an independently run alternative to multilateral Bretton Woods institutions such as the World Bank. and the International Monetary Fund.

Although China is the largest contributor with 26.6 percent of the voting rights, the bank’s 106 members include many Western countries such as Canada, France, Italy and the United Kingdom. Danny Alexander, UK Chief Secretary to the Exchequer from 2010 to 2015, is the Asian Infrastructure Investment Bank’s Vice President for Policy and Strategy.

The bank froze its dealings with Russia at the outbreak of the war in Ukraine and has a triple A credit rating, which allows it to raise capital at very low costs.

In an internal memo seen by the Financial Times, Gein told staff that management was aware of Picard’s allegations and was “redressing the situation”.

“We acknowledge the uncertainty these comments can cause for all of us working at the Asian Infrastructure Investment Bank. We hope you will join us in wishing Bob well for the future,” Jin said.

An AIIB insider said the allegations did not align with what he had seen working at the bank for a number of years and that it was an “unfortunate characterization” that reflected one person’s personal view.

Three other people familiar with the matter questioned Picard’s accusations, saying they had seen no evidence to support his claims that the party ran the bank.

Picard said he has made his concerns about party influence clear in writing on two occasions over the past month. He said he had noticed that all of the bank’s departments from the president’s office down included members of the Chinese Communist Party, who quietly ran things in a way that undermined claims of transparency.

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“Internally, I have raised concerns about the influence of the CCP. When you’ve been working there for a while, you realize this is the internally hidden hand of the bank.

China’s embassy in Canada on Wednesday dismissed Picard’s criticism as “pure sensationalist propaganda and outright lies,” adding in a warning to Ottawa that the “real dangers” to global development are “the confrontation between blocs and the ‘new Cold War’.”

International business enterprises have been criticized for allowing the Chinese Communist Party to operate within them. The Financial Times revealed last year that HSBC became the first foreign bank to set up a Chinese Communist Party committee in its mainland branch.

According to Chinese law, companies with three or more CPC members must have an organization to “carry out party activities.”

Picard said he resigned in writing two days ago but decided it was unsafe to remain in China, which has jailed Canadian citizens on charges Ottawa called “arbitrary”.

Additional reporting by Mikey Deng in Beijing