Beijing is unhappy with the UK’s decision to send former Liberal Democrat minister Sir Danny Alexander to its high-profile new development bank and has placed him in a job heading communications.
Sir Danny will have a vice-presidential role at the Asian Infrastructure Investment Bank, but China is not impressed that Mr Osborne has chosen to send a “former politician”.
“The Chinese were not happy that the UK nominated a former politician without a track record in international finance,” said one person familiar with the AIIB’s selection process.
China takes a somewhat jaded view of Britain despatching former politicians to the east; Chris Patten became a thorn in Beijing’s side as Hong Kong’s last governor after he lost his Bath seat at the 1992 election.
Sir Danny, 43, lost his Inverness seat last year and is also seeking new employment; a move to Beijing would represent a big new opportunity but not one for which he is obviously qualified.
In its advertisement for the Vice President and Corporate Secretary post, the AIIB said the job required a “minimum 20-25 years in a leadership function and position of influence in multilateral development bank(s) or equivalent”.
Sir Danny’s most recent experience was the five years he spent as Mr Osborne’s Liberal Democrat deputy at the Treasury, where he was responsible for implementing the coalition’s austerity programme.
Mr Osborne rated the Scot highly and feels sympathy for a former colleague — albeit from another party — who oversaw tough spending decisions and then lost his Highland seat as part of the SNP landslide.
However Mr Osborne’s nominee does not exactly meet the criteria set out in the job ad; immediately before becoming an MP in 2005, Sir Danny was a press officer at the Cairngorms National Park.
That experience and his previous stint as a press officer for the Lib Dems and the Britain in Europe pressure group could now come in useful.
According to the ad, the corporate secretary will “serve as a focal point of communication” between the AIIB’s shareholders, governors, directors and executives. The successful candidate would have “a capacity to deal with political-sensitive communication in a complex environment”.
At a briefing at the AIIB’s inaugural meeting in Beijing earlier this month, the bank’s new president Jin Liqun said the bank’s vice-presidents and other senior staff would be selected on the basis of merit not nationality.
But China owes Mr Osborne a favour after he made Britain a founding member of the AIIB last year, ahead of other European countries and to the chagrin of Washington.
Although Mr Osborne put Sir Danny’s name forward, the formal nomination for vice president will come from the AIIB president; he is then expected to be approved by the bank’s board.
While Sir Danny’s duties are expected to include communications strategy, a German vice-president is expected to be given a more hefty role as de facto chief operating officer.
Joachim von Amsberg, 51, has spent his career at the World Bank, joining as an economist and later acquiring extensive experience in Asia, including managing the World Bank’s response to the destruction of Aceh in the 2004 Indian Ocean tsunami.
A European diplomat said: “This has been a very difficult discussion. The Chinese played hardball over jobs.”
However Berlin, the biggest non-Asian contributor to the bank, seems to have secured a top post by proposing a well-qualified development banker.
“Beijing at least saw Patten as a heavyweight within Tory ranks but do not see Alexander as carrying much weight with the Cameron administration,” said Steve Tsang, a China expert at the University of Nottingham.
Mr Tsang, however, added that Sir Danny would be an asset to the AIIB, saying that he had “proved himself an able chief secretary and a very astute player in both the cabinet and Treasury”.
Sir Danny declined to comment.
A UK official familiar with the nomination process said the nomination had been well received in Beijing and elsewhere.
“Naturally, some of those whose nominees haven’t fared so well may be disappointed, but Danny’s record as chief secretary to the Treasury, where he helped to turn around the UK public finances and oversaw the coalition’s infrastructure programme, speaks for itself. He would be an enormous asset to the AIIB, a view that is clearly shared in Beijing.”
Lord Patten said of Sir Danny’s expected appointment: “The best of luck. He is a nice man.”