March 20, 2015 / 3:02 AM / 3 years ago

Japan says could join China-backed AIIB if conditions met

Japan's Deputy Prime Minister and Finance Minister Taro Aso attends a news conference after attending the Asia-Pacific Economic Cooperation (APEC) finance ministers meeting in Beijing October 22, 2014. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japan could consider joining a China-led development bank if it could guarantee a credible mechanism for providing loans, Finance Minister Taro Aso said, the first time Tokyo has signaled it could be part of the institution led by its arch-rival.

Around 30 countries, including Britain and Germany, have decided to participate in the Asian Infrastructure Investment Bank (AIIB), while the United States, Japan’s main ally, has urged countries to think twice before joining, citing worries about governance and environmental safeguards.

The AIIB could emerge as a rival to the Asian Development Bank, the Manila-based multilateral institution dominated by Japan and the United States, and the World Bank, some analysts have said.

Aso underscored the need for the China-backed bank to have the board of directors screen and approve individual cases in deciding provision of loans.

“We have been asking to ensure debt sustainability, taking into account its impact on environment and society,” he told reporters after a cabinet meeting.

“We could (consider to join) if these issues are guaranteed. We’ll give it careful consideration from diplomatic and economics viewpoints.”

If the conditions were met ”there could be a chance that we would go inside and discuss. But so far we have not heard any responses,” he added.

Reporting by Tetsushi Kajimoto; Editing by Richard Pullin and Raju Gopalakrishnan

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