As he likes it

Jin Liqun is the translator of two popular books into Chinese. They are an unlikely pairing. One is The Anthology of English Verse, an authoritative source for Chinese students of English poetry. The other is The House of Morgan, Ron Chernow’s 812-page account of America’s most storied banking dynasty.

English literature and financial history are disciplines that might seem miles apart. But an ability to bridge different worlds has been one of the mainstays of Jin’s career, and probably why the 66 year-old banking bureaucrat is widely tipped to become the first president of the newly-created Asian Infrastructure Investment Bank (AIIB).

Jin was born in 1949 in Zhenhai, a district of Ningbo in Zhejiang province. Originating from a port city close to Shanghai, Ningbo natives are renowned for their powers of communication, supposedly cultivated from a long history of dealing with foreign traders. (This important cultural trait has assisted the careers of some of the most famous shipping magnates such as YK Pao and CY Tung.)

Jin developed his international outlook early in life too. By high school he had already acquired a reputation as a linguistic expert. “His English was so outstanding that everyone in the school knew who he was,” a former teacher told a local newspaper this month.

Jin’s education was interrupted by the Cultural Revolution, a turbulent period that forced him to spend 10 years working in the countryside. Yet he recalls trying to keep up his education, albeit in a self-led style. In his free time he would read whatever English literature he could find, including the plays of Shakespeare (a risky hobby, given the puritanical ferment of the era).

“The truth is that I was never for a moment convinced that a nation such as China could survive or survive well without education. I am sure that my crude, but never narrow, nationalism was shared by many others of my generation,” Jin wrote in the China Daily in 2007.

In the same article he added that he felt lucky to have experienced a period of rural life, especially when he took charge of infrastructure projects financed by the World Bank which gave him a chance to see “a road connecting a remote village, a power transmission line bringing light to farmhouses or irrigated farmland draped with luxuriant vegetation”.

Jin’s academic excellence paid off in 1978 when entrance exams for China’s universities resumed. Several generations of students were competing for a limited number of places but Jin’s English ability helped get him into Beijing Foreign Studies University, where he obtained a degree in English literature.

This coincided with Deng Xiaoping’s era of ‘open-door’ economic reform, so professionals who could communicate with foreigners were badly needed. Jin was sent to work at the Ministry of Finance in 1980, specialising in external affairs.

In 1985 he was promoted to deputy director general of the MoF’s external finance department and in 1988 he was elected as China’s alternative executive director at the World Bank.

While he was posted to the US, Jin was also made a fellow at Boston University’s graduate school. He was offered the chance to further his studies, but opted instead to return to China and rejoin the MoF.

“I could easily have got a PhD degree (in economics) in Boston. But my country wanted me to come back, so I came back,” Jin told China News.

In making the decision, he was forgoing a potentially lucrative career on Wall Street, choosing the bureaucratic life in Beijing instead. In 1998 he was appointed as one of the deputy heads of the MoF, also serving as an alternative governor at the Asian Development Bank (the first Chinese to do so).

As a financial regulator and planner, Jin didn’t neglect his language skills, spending two years of his spare time translating The House of Morgan. The painstaking effort deepened his understanding of the global banking system, at a time when financial crisis was unfolding in Asia.

Jin was also put in charge of raising funds in the domestic and international capital markets. A defining moment came in December 1998 when he helped the MoF complete the sale of $1 billion in Chinese sovereign debt. It was the first international bond offering by an Asian country since the 1997 Asian financial crisis.

Jin says that he knew the financial mood was bleak and that he was operating in a climate dominated by chortlers and speculators.

“Why did I pick this moment for the bond offering?” he flattered his audience at a 1998 conference in Hong Kong. “Because you are all investors and I believed that you would make a better judgement then the others.”

According to Sina Finance, Jin’s presentational skills were also key to securing investor demand for the offering. “He was talking to international investors with a language that they understand, and in words that they loved to hear,” it posits.

Since then Jin has taken up other roles representing China overseas. He joined the Asian Development Bank in 2003 as vice president of operations, staying on until 2008. Over the next five years, he served as chairman of China’s sovereign wealth fund, China Investment Corp, and two years ago he was named chairman of CICC, the first Sino-US investment banking joint venture.

In the same year he was tasked with heading Beijing’s working group to establish the AIIB and he is currently serving as interim Secretary General as the bank’s charter is finalised.

Jin’s abilities as a “consummate barbarian handler” (his adeptness at dealing with non-Chinese) are one of his key skillsets, according to the Financial Times.

“Jin is an Anglophile who likes to quote Shakespeare to the English, tell the French how enamoured he is of their culture and charm the Germans by telling them they are his favourites because of their honesty,” the FT notes.

“His ability to play the members of the EU off against each other is legendary in Beijing.”

But with nearly 60 countries applying to join the AIIB, Jin’s challenges in balancing the interests of so many members look even more daunting.

Should he be confirmed in the role, he will have to make sure that China’s voice is heard but avoid the impression that the AIIB is a rubber stamp for its new ambitions in global finance.

Doubts about China’s motives have prevented Japan and the United States from participating in the AIIB’s establishment. And one of the key questions still to be answered is how much sway the Chinese will have.

When the first group of founding members agreed to establish the bank last year, they decided that gross domestic product should be the basis for allocating votes among members. But they failed to agree on the distribution between Asian and non-Asian nations.

Since then more governments have signed up, many of them from non-Asian countries.

China has now said that no country will have veto rights at the bank (unlike at the World Bank and IMF where the US has veto rights), but that members in the region will have the fullest voice in its operations.

About 75% of the bank’s authorised capital of $100 billion is expected to come from Asia.

Of course, under this arrangement, China holds the most votes as the largest Asian economy, giving it the greatest say.

But Jin has said that this does not mean that Beijing will dominate the bank’s decisionmaking. Rather than special privileges, the Chinese have additional responsibility for ensuring the bank’s success, he suggests.

“China will follow existing international standards and will not behave like a big boss,” he told a forum in Beijing in March. “It will work with other members on an equal footing to reach agreement on decisions through negotiations and not rely on the authority of veto power to make decisions.”

The new bank is important because it will test China’s credentials at developing alternatives to American, European and Japanese-led international institutions.

And if Jin can lead a flourishing multinational institution, it will help China to rebut the claims that it isn’t ready to serve as a responsible global player.

---

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.