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AIIB attracts global support

By Catherine Wong Tsoi-lai  (Global Times)    09:19, April 01, 2015
Chinese President Xi Jinping (C, front) meets with representatives of 21 Asian countries who signed the Memorandum of Understanding on Establishing Asian Infrastructure Investment Bank (AIIB) in Beijing, capital of China, Oct. 24, 2014. (Xinhua/Huang Jingwen)

Sweden, Norway, Kyrgyzstan latest to seek membership

Forty-six countries and regions have signed up for the China-initiated multi-billion dollar Asian Infrastructure Investment Bank (AIIB) as the application deadline arrived Tuesday, as observers believe wide participation will not only boost the bank's transparency but also extend its influence beyond Asian countries.

Up to the Tuesday deadline, 30 economies were approved as founding members of the $50 billion bank. The total number of founding members will be confirmed on April 15, said foreign ministry spokeswoman Hua Chunying on Tuesday.

Sweden, Norway and Kyrgyzstan were the last three countries to apply for founding membership status. This came after Egypt, Finland and Russia announced their intention of joining the AIIB as founding members on Monday.

The Ministry of FinanceTuesday said the third round of discussions over the practicalities of setting up the bank was held in Almaty in Kazakhstan over the last two days, and that the articles of association will be released in mid-2015.

The AIIB, which was initiated by President Xi Jinpingin 2013 to finance infrastructure projects in Asia, is expected to be officially established by the end of this year.

Yuan Gangming, a research fellow at Tsinghua University's Center for China in the World Economy, told the Global Times that the establishment of the AIIB will greatly assuage the deficit of capital in supporting Asia's growing demand for infrastructure projects.

Estimates from the Asian Development Bank suggest Asia will need $8 trillion in national infrastructure and $290 billion in regional infrastructure through 2020 to sustain the region's growth trajectory.

"With widespread support, the bank will not only directly benefit economies that plan to develop infrastructure, non-regional countries will also benefit from their investment by tapping into the vast potential of Asia's future development," Yuan said.

Developed countries like the UK value the potential regional impact of the bank, and are seeking to benefit from stronger decision-making power over the bank's development as a founding member, Huang Wei, an expert at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS), told the Global Times.

Australia, as a leading nation in the Asia-Pacific, also seeks a more active role in regional integration through joining the Asia-focused bank, Xue Li, a senior research fellow with the Institute of World Economics and Politics, also at CASS, told the Global Times.

Colin Chapman, former president of the Australian Institute of International Affairs in New South Wales, said the AIIB fits with Canberra's initiative in September at the G20 summit to establish the Global Infrastructure Initiative, expected to be based in Sydney, to share information about matching investors with projects, according to Australian Outlook, the institute's online periodical.

With dozens of nations from Europe, the Middle East and Africa, including some of the world's major economies, ready to join the China-led bank, the US and Japan opted not to apply for founding member status.

The US has a leading role in the World Bank and International Monetary Fund. But when China proposed the AIIB earlier, the US reportedly lobbied allies, including Australia, South Korea, the UK and other European states not to join, according to the Financial Times.

After the UK took the lead earlier this month to announce it would become the first major Western country to apply for membership, other European countries like France, Germany and Italy followed suit, as did Australia, South Korea, and Russia.

Japanese Finance Minister Taro Aso reiterated Tuesday the country's concerns about governance at the AIIB, reported Reuters.

Such worries are overrated, said Huang, adding that countries like the US and Japan can contribute to better governance of the bank by joining and inserting their influence from within.

"The transparency and credibility of the bank has greatly increased with more than 30 economies joining as founding members, which will hold the bank accountable and ensure better governance," Huang noted.

Hua said Tuesday that China remains open to and would welcome Japan as an AIIB member.

During a meeting with Chinese Premier Li Keqiangin Beijing Monday, US Treasury Secretary Jacob Lew said the US is looking forward to cooperating with the AIIB, the Xinhua News Agency reported.

China initially contributed 50 percent of capital share to the bank. The country's stake has decreased with participation from more members.

The UK, as an established financial hub in Europe, could also contribute their management experience in ensuring the bank's legitimacy, Huang said.

Yuan believes that the China-led AIIB will seek to develop a decision-making mechanism with more emphasis on negotiation and building consensus, instead of simply adopting the voting system used by the IMF and World Bank.

Taiwan also submitted an application to join the AIIB. But China's foreign ministry said that any reference to "two Chinas" or "one China, one Taiwan" should be avoided. China's Hong Kong Special Administrative Region also applied to join earlier.

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

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