China and 21 other countries initiate new Asian bank

China and 21 other Asian nations signed up on Friday to a new Beijing-backed international bank for Asia that Washington opposes as an unnecessary rival to established institutions such as the World Bank. Representatives of the 22 nations signed a memorandum of understanding at the Great Hall of the People in the heart of Beijing to establish the Asian Infrastructure Investment Bank (AIIB). The new bank reflects both China’s desire to push investment in the region and its frustration with U.S., Japanese and European dominance of the World Bank, International Monetary Fund and Asian Development Bank. Overseeing the signing ceremony, Chinese Finance Minister Lou Jiwei said the move marked a new stage in preparations for the bank’s formal establishment, the date for which hasn’t been given.

We hope that through our joint efforts we can build the AIIB into a professional and efficient financing platform for infrastructure.

Chinese Finance Minister Lou Jiwei

Chinese President Xi Jinping proposed the bank a year ago at a gathering of Asia-Pacific nations, and China has said it will provide most, if not all, of the initial $50 billion in capital. In a nod to concerns the bank could undercut existing institutions, Lou said it would complement the existing multi-national financial institutions and “is committed to regional infrastructure and sustainable development.” China also is backing another $50 billion-lending institution, the New Development Bank, sponsored by the so-called BRICS countries that also include Russia, India, Brazil and South Africa.

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