France,
Germany and Italy have confirmed they’ll join China’s new Asian
Infrastructure Investment Bank (AIIB). Participation in the rival to the
US-led World Bank is seen as a setback for the Obama administration.
The three European countries on Tuesday
confirmed in a statement they intend "to become founding members of the
Asian Infrastructure Investment Bank," according to AFP.
"We want to bring our long experience... to help
the bank build a solid reputation," said German Finance Minister
Wolfgang Schaeuble, speaking also for Italy and France at a joint press
conference with Chinese Deputy-Premier Ma Kai on Tuesday in Berlin. He
added that the three countries want to make a contribution to the
positive development of the Asian economy, in which German companies
were actively taking part.
Chinese Foreign Ministry spokesman Hong Lei
welcomed the decision, saying "the AIIB is an open and inclusive
multilateral investment institution.”
"Participation by countries outside the region will intensify the extensive representatives of the AIIB," he added.
The decision of the three European countries
comes after Britain last week became the first Western country to agree
to become a founding member of the AIIB, FT reports. The UK government
said the decision was in the country’s national interest, but it got a
negative reaction from the United States.
The new China-led bank is expected to challenge
the Washington-based World Bank, so the US is increasing pressure on its
allies not to join the institution. The US’ concern is that the new
investment bank might not have high standards of governance and
environmental and social safeguards.
The new bank is expected to challenge the
Western dominance of the US-led World Bank and IMF in global
infrastructure projects, which experts believe will create healthy
competition.
“Our messaging to the Chinese consistently has
been to welcome investment in infrastructure but to seek unmistakable
evidence that this bank… takes as its starting point the high watermark
of what other multilateral development banks have done in terms of
governance,” US Regional Assistant Secretary of State Daniel Russel said
in Seoul, the Financial Times reports.
Read moreBritain’s membership in China-led World Bank rival of ‘UK national interest’ - spokesman
Meanwhile, Chinese officials say the AIIB's operation and governance will be open, transparent, inclusive and responsible.
"It will draw experience from other multilateral
development banks and avoid their detours so as to be more
cost-effective and efficient," Chinese Foreign Ministry spokesman Hong
Lei was cited as saying by Xinhua news agency. He also added that the
bank “will complement existing multilateral development banks and
support the infrastructure and economic development in Asia.”
The three major financial institutions – the
IMF, the World Bank and the Asia Development Bank will not be able to
cope with the tremendous amount of work that needs to be done,
investment advisor at Motley Fool David Kuo told RT.
“You shouldn’t politicize something like
infrastructure. People have a right to communication and a right to
uninterrupted power - these are all parts of the infrastructure projects
that many countries are crying out for,” Kuo said. He hopes that there
will be a certain amount of competition with the new China-led
investment bank. Kuo suggests Germany, France and Italy have much to
offer the Asian people, as they can bring expertise as well as money.
South Korea, Switzerland and Luxembourg were
also considering joining the Asian Infrastructure Investment Bank, the
Financial Times reported.
Australian Prime Minister Tony Abbott said he
would make a final decision on AIIB membership soon. South Korea and
other countries are in discussions with China over possible
participation.
China’s main regional rival Japan said earlier
this month that Asian countries including Japan have until March 31 to
decide on becoming AIIB founding members.
"They told us they are considering. Whether
Japan will join, we do not know. It is Japan's own decision," Chinese
Finance Minister Lou Jiwei said, according to the Xinhua news agency.
Nearly 30 countries have confirmed their
participation in the AIIB, which is aimed at helping finance
infrastructure projects across Asia and is expected to come into being
this year.
The AIIB was formally launched by Chinese
President Xi Jinping in 2014, and is expected to become a tool of a
broader Chinese push for growing international power and economic
significance.
http://rt.com/business/241365-china-bank-eu-usa/
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