Canada Freezes Ties with China-led AIIB, Probes Allegations of Communist Domination

REUTERS/Tingshu Wang/File Photo
The sign of Asian Infrastructure Investment Bank (AIIB) is pictured at its headquarters in Beijing, China July 27, 2020.

OTTAWA (Reuters) – Canada is freezing ties with the China-led Asian Infrastructure Investment Bank (AIIB) while it probes allegations it is dominated by the Chinese Communist Party, Finance Minister Chrystia Freeland said on Wednesday.

Freeland said she did not rule out any outcome of the investigation, a clear hint that Ottawa could pull out of a bank it officially joined in March 2018.

The bank’s global communications director, a Canadian, said on Wednesday he had resigned and criticized the bank as “dominated by the Communist Party,” allegations which the AIIB said were 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.

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.

The Chinese embassy in Ottawa, asked for comment, said in an email that “the claim that ‘AIIB is controlled by the Communist Party of China’ is nothing but a lie.”

Liberal Prime Minister Justin Trudeau was in power when Canada joined the AIIB. The opposition Conservatives have long demanded Ottawa pull out of the bank, saying it is a tool for Beijing to export authoritarianism throughout the Pacific.

Freeland’s remarks mark a new dip in bilateral relations with China, which have been frosty for the last five years.

The Royal Canadian Mounted Police said on Tuesday it was investigating allegations China tried to intimidate a federal Conservative legislator.

Canada has accused China of trying to interfere in its affairs through various schemes, including illegal police stations and the targeting of lawmakers. Beijing denies all such allegations.