MCDF: A Multilateral Fund Administered by the AIIB

The MCDF is an infant but prospectively important fund in international development finance, initiated by China at the inaugural Belt and Road Forum in 2017. The AIIB acts as the administrator of the MCDF financing facility, the host of the MCDF secretariat, as well as an implementing partner. Endorsed by eleven leading international development banks worldwide, the MCDF is expected to work closely with global agendas such as the BRI and the AIIB, as well as with other peer institutions including the GICA, the GI Hub, and the GIF, in pursuing their shared goals of promoting high-quality infrastructure and connectivity investment. This chapter endeavors to investigate some key institutional matters for the development of the MCDF; they are the structure of its Secretariat, the funding mechanism, and the designated functions. Along the spectrum of hardening soft law, the MCDF is expected to evolve as an independent international body, to be equipped with a charter as its constituent instrument. The prospect of China’s role in the MCDF is predicated upon the understanding of Chinese culture and China’s approach toward global governance, which has been consistently demonstrated during the development of the AIIB and the BRI. China will play a leadership role in the MCDF, while behaving responsibly to other participants, including to borrower countries.