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Expert calls European nations' decision to join AIIB sound business sense

(Xinhua)    08:52, March 18, 2015

LONDON, March 17 -- The decision by Britain last week to apply to join the Asian Infrastructure Investment Bank (AIIB) was seen as a sign that the British government recognizes the business advantages of being part of continued economic development in Asia, an expert on the political economy of Asia has said.

"There is a profit to be made, there is a need for infrastructure investment in the region, the UK government has recognized that by being part of the bank British companies will probably benefit from investment in East Asia and in the broader Asian continent," Dr Ramon Pacheco Pardo, lecturer in the political economy of East Asia at King's College, London, told Xinhua on Tuesday.

Pardo added: "Then there is the political component which is part of an institution which everything indicates is going to become one of the key pillars of integration in the region and in the whole of Asia and the UK obviously wants to be part of this political development as well."

The decision by the British government to seek to be a member nation of the AIIB was followed on Tuesday by announcements from the other three largest European Union economies - Germany, France and Italy - that they too would apply to join the AIIB.

Pardo said: "These countries realize that if they want to have a better economic and political position in the region they cannot shun institutions which basically include pretty much all the countries in Asia and beyond -- some countries from the Gulf for example. I think the UK in this case has taken a leadership position but other countries were already willing to join this institution and therefore have been able to do this now."

The United States had been critical of the decision by the British to apply to join the AIIB, with the London-based Financial Times newspaper quoting an official within the US government as saying "we are wary about a trend of constant accommodation of China".

The United States has not applied to join the AIIB.

The United States realized that there was a need for investment in Asia, but was also wary that joining the AIIB would weaken institutions such as the World Bank and the IMF, said Pardo.

He added: "I think in the U.S. there is this division. There is a realization that the U.S. either needs to cooperate if it is not to be part of this institution, because politically it might not be feasible, but on the other hand the U.S. does not want to undermine the network of institutions that it has created in the past."

European nations which signed up to the AIIB would benefit in two main areas, said Pardo.

"The clearest benefit is the fact that China is going to be more welcoming to investment, to economic cooperation with those countries that have decided to join the Chinese initiative, so countries such as the UK and Germany which have strong, growing economic links with China might see a degree of preferential treatment," he said.

In addition those nations would be recognized as countries that are willing to invest in the development of the region and gain a benefit from that.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Ma Xiaochun,Yao Chun)

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