Canada suspends ties with Chinese-led AIIB over allegations of Communist domination

Canadian Finance Minister Chrystia Freeland said on Wednesday (June 14) that Canada is freezing ties with the China-led Asian Infrastructure Investment Bank (AIIB) while it probes allegations that it is dominated by the Chinese Communist Party. Freeland said she did not rule out any outcome of the investigation. There are chances that Ottawa will pull out of the bank it officially joined in 2018.

AIIB's global communications director, a Canadian, announced Wednesday that he had resigned from his position and criticised that the bank was "dominated by the Communist Party". AIIB has said that the allegation was baseless and disappointing.

"The Government of Canada will immediately halt all government-led activity at the bank. And I have instructed the Department of Finance to lead an immediate review of the allegations raised and of Canada's involvement in the AIIB," Freeland told reporters.

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She said as the world's democracies worked to limit their strategic vulnerabilities to authoritarian regimes, they must be clear about the ways such governments exercised their influence.

"The review I am announcing today is to be undertaken expeditiously. And I am not ruling out any outcome following its completion," she said.

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Reuters reportedthe Chinese embassy in Ottawa as saying in an email that "the claim that AIIB is controlled by the Communist Party of Chinais nothing but a lie".

PM Justin Trudeau was in office when Canada joined AIIB. He had attracted criticism from the Conservatives in the opposition. They have long demanded that Ottawa pull out of the bank, allegingthat the bank is a tool for China to export authoritarianism.

Canada's relations with China have been frosty for the last five years. Canadian finance minister's remarks mark a new low in relations between the two countries.

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The Royal Canadian Mounted Police on Tuesday said that it was investigating allegations that China attempted to intimidate a Canadian federal Conservative legislator. Canada, in thepast, has accused China of trying to interfere in its affairs in many ways. This includes illegal police stations and other means. Beijing denies all such allegations.

What former communications chief said

Bob Pickard, a former communications chief at AIIB told AFP that he left China hastily over concerns for his safety.

Speaking from Tokyo, he said the bank "serves China's interest" and the Chinese Communist Party (CCP) wields "undue" influence over every aspect of its operations.

"It's a resource to the geopolitical goals of the PRC (People's Republic of China)... in practice, I believe it serves China's interest," he told AFP.

He said that AIIB directed its lending mainly to countries China is focussing on to set up its massive Belt and Road Initiative (BRI).

"These are not disconnected ventures, the Belt and Road initiative and the AIIB... these are similar kinds of countries that China has been trying to cultivate politically."

(With inputs from agencies)

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