Fury as taxpayers hand £2.5bn to Beijing bank

British taxpayers are giving £2.5bn in aid to a Beijing-based bank run by an ex-Red Guard member of Chairman Mao, The Mail on Sunday can reveal.

Among the projects funded by the Asian Infrastructure Investment Bank (AIIB) is a company linked to alleged abuse of Uyghur Muslims.

The UK’s involvement in the AIIB dates back to David Cameron’s coalition government. At the time, then-Chancellor George Osborne was keen to socialize with the Chinese, seeing them as potentially lucrative trading partners.

However, since then there have been growing concerns about China’s expansionary policies and its involvement in key UK industries such as telecoms and nuclear power.

Britain’s representative on the board of the AIIB is Sir Danny Alexander, the former First Secretary of the Treasury who was Osborne’s right-hand man.

The AIIB is China’s answer to the World Bank, a Washington institution dedicated to helping developing countries. It has more than 100 member states – including Vladimir Putin’s Russia – and is led by Jin Liqun, a former member of the communist Red Guard.

Other leading Western countries, including the US and Japan, have refused to join the bank, which sees China as its largest shareholder. The gleaming headquarters is just steps away from the famous Bird’s Nest Olympic stadium.

The question arises why British taxpayers still support the Beijing-based bank given the changed geopolitical climate. These are likely to increase following revelations that the AIIB has funneled money to Haier Group, a Chinese manufacturer linked to alleged Uyghur abuses in China.

Tory MP Bob Seely, a member of the influential Foreign Affairs Committee, said: ‘If this is true then it is just shocking that you have a bank in which the British taxpayer has a significant stake and a large company receiving money from which accused of some pretty grotesque modern-day slavery crimes. It’s just shocking

“We need to get wise and we need to make sure that when we work with China, we don’t make ourselves complicit in serious and significant human rights violations. It’s just not acceptable.’

Documents show that in July 2022, the bank handed over nearly £100 million to a subsidiary of Haier, which owns well-known appliance brands such as Candy and Hoover.

That was despite a United Nations-backed organization writing a letter to Haier’s CEO in 2021 expressing concern about the company’s treatment of Uyghur and other minority workers “inside and outside the Xinjiang region.”

There are 12 million Uighurs, mostly Muslims, living in Xinjiang, officially known as the Xinjiang Uyghur Autonomous Region.

Shake it up: Vladimir Putin welcomes AIIB president Jin Liqun to Russia in 2016

Since Britain became a founding member of the AIIB in 2015, it has pledged billions of pounds to the bank in exchange for a 3 per cent voting right. This was part of a push for closer ties with Xi Jinping’s China nearly a decade ago, which was spearheaded by the Cameron government despite US protests.

The White House said in 2015 that it was “concerned” about whether the AIIB would meet “high standards of governance, environmental and social safeguards.”

Since then, relations between Beijing and the West have deteriorated significantly.

Tensions have been raised over reports that China has detained more than a million Uyghurs and the crackdown on pro-democracy protests in Hong Kong. The UK’s stance on Chinese investment has also hardened over the past 12 months.

The government recently forced a China-backed company to sell chip company Newport Wafer Fab, though other deals have been greenlit.

Beijing position: ex-LibDem MP Danny Alexander

The revelations also raise uncomfortable questions for Sir Danny Alexander, who served as chief of staff to former Liberal Democrat leader Sir Nick Clegg.

After losing his seat in the 2015 election, Alexander, who had no senior management experience at a development bank, was the surprising choice to represent British interests at the AIIB.

The last job he held before entering parliament was head of communications for the Cairngorms National Park. Now 50 years old, he is vice president of the AIIB and lives in Beijing with his wife Rebecca and their two children. Despite the AIIB’s stated commitment to transparency and accountability, its salary remains secret.

It is also unclear how UK taxpayers benefited from their support of the AIIB. Much of the bank’s work is financing costly projects in distant lands – at a time when UK budgets are under extreme pressure.

The bank approved 44 projects last year, six of them in China and worth more than £500 million.

A further £400 million has been earmarked for a second runway at a remote airport in southwest China. Other countries benefiting from AIIB-supported projects include India, Egypt and Uzbekistan.

A spokesman for the Ministry of Finance said: ‘The AIIB has 105 members worldwide and is focused on improving infrastructure and promoting sustainable growth in its region in partnership with established multilateral development banks. The government is working closely with the AIIB and other shareholders to ensure that its investments are in line with international standards and best practices.”

Danny Alexander and the AIIB were contacted for comment.

THE PAST OF THE PRESIDENT IN THE RED GUARDS

Like many of his student contemporaries, AIIB President Jin Liqun was briefly a member of the Red Guards during the most turbulent phase of Chairman Mao’s Cultural Revolution in the mid-1960s.

The Red Guards were a massive student-led paramilitary social movement mobilized and led by Mao to destroy symbols of China’s pre-Communist past, including ancient artifacts.

Books were burned, museums looted and streets renamed after revolutionary heroes.

Fervor: Red Guards parade through the streets of Beijing in 1967

Attacks on culture quickly degenerated into attacks on people.

Intellectuals – including teachers and party officials – were denounced as ‘counter-revolutionaries’ and forced to reflect on ‘mistakes’ of the past by cleaning toilets or building walls.

But as violence and anarchy spread, Mao forbade the Red Guards to restore order. With schools and universities closed, Jin Liqun — whose daughter, Keyu Jin, is a professor at the London School of Economics — was sent to the countryside to grow rice.

He later went to study in the US, where he joined the World Bank in Washington.

Jin Liqun, 73, went on to hold senior positions at a number of major Chinese financial institutions, including the central bank.