Three major nations absent as China launches World Bank rival in Asia

Wed Nov 5, 2014 5:40am EST
 
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(This Oct. 24 story was corrected to remove the final four paragraphs that are incorrect.)

SHANGHAI (Reuters) - Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank on Friday as the United States said it had concerns about the new rival to Western-dominated multilateral lenders.

China's proposed $50 billion Asian Infrastructure Investment Bank (AIIB) is seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.

China, which is keen to extend its influence in the region, has limited voting power over these existing banks despite being the world's second-largest economy.

The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent.

Indonesia, where President Xi Jinping first spoke of the AIIB during an October visit last year, was not present and neither were South Korea and Australia, according to a pool report.

Media reports said U.S. Secretary of State John Kerry put pressure on Australia to stay out of the bank.

However, State Department spokeswoman Jen Psaki said: "Secretary Kerry has made clear directly to the Chinese as well as to other partners that we ‎welcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency.

"We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly."   Continued...

 
China's President Xi Jinping (R) meets with the guests at the Asian Infrastructure Investment Bank launch ceremony at the Great Hall of the People in Beijing October 24, 2014.  REUTERS/Takaki Yajima/Pool