The Asian Infrastructure Investment Bank, or AIIB, has been hitting headlines around the globe. The China-sponsored bank will offer project loans to developing countries. And it's scheduled to start operations at the end of this year. But just what does it do, how will it work, and what is China's role in all of this?

The AIIB, which has an initial capital pool of 50 billion US dollars majority funded by China, is there to fill the shoes of vast financing needs for infrastructure projects throughout Asia.

That's according to Jin Liqun, secretary-general of the Multilateral Interim Secretariat for Establishing the AIIB.

The annual investment for infrastructure in Asia stands at 730 billion dollars between now and 2020. Jin says multilaterals make up only a small fraction of that, and there's a considerable funding gap.

"We need to set up a specific platform for infrastructure investment, so as to fully utilize abundant savings in this region. The AIIB will work with existing multilaterals to leverage private sector capital to boost infrastructure in Asia," Jin said.

Although China is the AIIB's biggest shareholder, Jin says the country will play by the rules and not bully any participating party. And China will dilute its shares as more countries join the initiative.

"The position as the biggest shareholder is accompanied by not privilege but obligation. China will adhere to international regulations and not see itself as the big boss. It will engage in negotiations and strive to make decisions on consensus, not purely by voting rights," Jin said.

Jin reaffirmed China's stance that the AIIB would complement rather than compete with other existing financial institutions.

"We highly value the governance principles of global multilateral financial institutions, policy safeguards on environment protection and immigrants and other common practices. We will boost the green economy and low-carbon economy. The AIIB will have zero-tolerance on corruption," Jin said.

Some 27 countries have already signed up. The total number is expected to hit 35 by the end of this month, the application deadline to become a founding member.

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