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National interest prevails in Australia's change of position on China-proposed AIIB

(Xinhua)    17:19, March 19, 2015

CANBERRA, March 19 -- As major European economies expressed their willingness to join the China-proposed Asian Infrastructure Investment Bank (AIIB), Australia also feels the urge to reconsider its previous position of refusing to join the bank as a founding member.

Since last weekend, Australian Prime Minister Tony Abbott and senior ministers including Treasurer Joe Hockey and Foreign Minister Julie Bishop have been taking turns to make statement that Australia is reconsidering its position on AIIB.

Analysts expect that the government's final answer to China's invitation to join as a founding member of the AIIB would be a resounding "yes".

Australia, together with the United States, Japan and South Korea, had initially declined to support the bank last year, citing concerns about its governance and accountability.

Greg Sheridan, foreign editor of The Australian newspaper, labeled the change of position of Australian government as "a colossal defeat of the Obama Administration's incompetent, distracted, ham-fisted diplomacy in Asia."

He recalled the visit to Australia by Obama during last year's G20 summit in Brisbane, Australia, during which Obama delivered a "rogue" speech embarrassing Abbott by criticizing his government's climate change policy.

Hugh White, Australia's renowned strategist and professor of strategic studies at the Australian National University (ANU), agreed with that.

In addition, he said, it also due to the warm Australia-China relations after Chinese President Xi Jinping's visit late last year.

While the AIIB has been depicted as an instrument of geopolitical power struggle between China and the U.S., countries including Britain, Germany, France, Italy and possibly Australia are viewing the bank more from its fundamental role of channeling excessive savings around the world to drench the funding thirst for infrastructure development in Asia.

The Asian Development Bank estimated that there is an 8- trillion-U.S. dollars deficit in Asia's infrastructure fields, including transport, energy and telecommunications.

"The establishment of the AIIB is clearly of great economic benefit to the whole Asian region, including Australia, and it is therefore in Australia's interest to join the AIIB," White said.

Guo Shengxiang, a macro-economist with think tank Australian Innovation Institute, said infrastructure development is not only a task for developing countries but also a requirement for developed countries which are facing the aging of their existing infrastructure.

"Data from the Australian government shows that Australia is in need of about one trillion U.S. dollars in the next 10 years for infrastructure such as transportation, rural irrigation and others, " Guo said.

Peter Cai, Business Spectator's China editor, said in the long run, the economic development in Asia stimulated by the AIIB- facilitated infrastructure constructions, will undoubtedly benefit Australia a lot.

Peter Drysdale, head of ANU's East Asian Bureau of Economic Research, said Australia and other economies throughout the region "will benefit greatly from investment through the AIIB, directed, as is it is intended, towards productive investment in infrastructure that is essential to sustaining regional growth."

"There is no question that Australia should be among the founding members of AIIB. That is consistent with Australian efforts to work with China to contribute to the establishment of this new multilateral facility for infrastructure investment in the region and beyond," he wrote in an email to Xinhua.

"AIIB can play an important role in national projects around the region, including in Australia. It can play a particularly important role in projects, such as transportation infrastructure across the region that can straddle a number of regional economies. "

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Kong Defang,Bianji)

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