The Asian Development Bank (ADB) has been important to Japan the way the World Bank has been to the United States and the International Monetary Fund to the European Union. Since its establishment in 1966, all eight presidents of the ADB have been from Japan and seven of them served at the country's Finance Ministry.
The monopoly looks set to continue, with Takehiko Nakao, Japan's vice finance minister, on course to succeed former president Haruhiko Kuroda, who resigned to become central bank governor in March. The 57-year-old still needs to go through voting by 67 member states of the ADB by April 24, but he is the only candidate for the job.
One seemingly odd twist in the run-up to the election, however, was that China, the third largest shareholder in the bank – and a country that surpassed Japan as the world's second largest economy in 2010 – forfeited its chance to come up with a nominee.
Xie Xuren, who stepped down as China's finance minister in March to chair the National Social Security Fund, has clearly opposed the idea of sending a Chinese candidate to run for ADB president. He was less straightforward with why he held the opinion though.
But a source close to the ministry said the reason was probably financial. China has borrowed heavily from the ADB. Its loans from the bank approached $26 billion in 2011, second only to India. Meanwhile, it has committed US$ 10.5 billion and paid in only $523 million to the bank.
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Reversing the flow of capital to become a net creditor is important if China wants to gain high moral ground in a race for ADB president, the source said. Not to mention the practical necessity that it needs to pump up its capital commitment to the bank in order to increase its voting rights, he added.
The Ministry of Foreign Affairs has concern as well. It was against sending a Chinese nominee to compete with Nakao because the relationship between China and Japan was at a particularly sensitive moment, the source said, referring to the conflict between the countries over territorial claims to a group of islands in the East China Sea.