China and 21 other Asian countries signed a deal in Beijing today to set up a new international bank to help fund infrastructure projects in Asia. Washington sees new financial institutions as unnecessary competition for established organizations such as the World Bank or Asian Development Bank. Australia, Indonesia and South Korea did not attend the inauguration ceremony of the new institution.
The establishment of the Asian Infrastructure Investment Bank (AIIB) was proposed by China. The world’s most populous country wants to strengthen its influence in the region. However, it has limited voting rights in existing multinational institutions such as the World Bank and the Asian Development Bank, despite being the second largest economy in the world. The two multinational banks regard Washington and its allies as their biggest financial backers.
New international investment banks must provide loans for the construction of roads, railways, power plants and telecommunications networks in Asia. The largest shareholder in it should be China, whose share should exceed 50 percent.
The signing of the memorandum of understanding today, for example, was attended by India, Singapore and Vietnam. Korea and Australia, whose membership China seeks, are missing. According to media reports, US Secretary of State John Kerry pressured Canberra not to join the AIIB. However, according to US diplomatic spokeswoman Jen Psaki, Kerry told China and other partner countries that the US welcomed the idea of creating an infrastructure bank for Asia, but called for it to comply with international standards regarding corporate governance. and transparency.
Even representatives of Japan, China’s main competitor in Asia, who were supposed to attend the ceremony, did not attend the new bank’s founding ceremony. Japan, along with the US, dominates the Asian Development Bank.
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