China-led Asia infrastructure bank attracts 21 countries

BEIJING — A China-led effort to launch the Asian Infrastructure Investment Bank (AIIB) has attracted the interest of 21 countries, Beijing’s Ministry of Finance said yesterday.

Representatives from South Korea, Thailand, Indonesia and Singapore participated in meetings held on Saturday in the Chinese capital to discuss the plan.

The meetings were chaired by Chinese Deputy Finance Minister Shi Yaobin, the ministry said on its website. Mr Jin Liqun, a former deputy finance minister and former Asian Development Bank vice-president, headed China’s preparation team.

Other countries that have participated in earlier meetings include Australia, India and the Philippines.

Analysts say the AIIB is a crucial part of Beijing’s efforts to extend its influence in the region. The AIIB is also seen as a direct challenge to the regional role of the Asian Development Bank (ADB).

The ADB, a Manila-based multilateral lender founded in 1966 which now has 67 member countries, is mainly dominated by the United States and Japan.

China also has chafed at its limited voice at other multilateral development banks, including the World Bank and the International Monetary Fund.

Chinese President Xi Jinping first raised the idea of establishing the infrastructure bank last October. China would likely be the largest shareholder, with a stake of as much as 50 per cent. Registered capital for the proposed bank would start at US$50 billion (S$63.7 billion), but may increase.

In July, World Bank Group president Jim Yong Kim said he welcomed a new multilateral infrastructure bank, saying there was a massive need for new investment in this area.

Mr Kim has also said developing countries’ infrastructure investment needs start at US$1 trillion a year, far in excess of private-sector investment of US$150 billion.

Chinese Finance Minister Lou Jiwei said in March that the AIIB would mainly focus on infrastructure construction in Asia to promote regional connectivity and economic cooperation.

China is seeking a more assertive international role as it tussles with neighbours such as Japan over maritime territory and faces a US that is shoring up its alliances in the region. Agencies