China spearheads preparations to set up Asian infrastructure bank
Print Edition
CHINA has begun the practical work to establish an Asian Infrastructure Investment Bank that would offer financial support to boost regional infrastructure, Minister of Finance Lou Jiwei said yesterday.
“China has just established the working group for the AIIB preparations in a bid to accelerate the process,” said Lou.
With a preliminary capital scale of US$50 billion, the new multilateral institution is expected to be funded by its members.
According to Lou, the first multilateral consultation meeting on creating the AIIB ended on January 24 and saw discussion of the framework plan for the bank. Some participating countries declared their intention of being the AIIB’s founding members. Bilateral discussions are under way.
“China welcomes more countries to join the AIIB as founding members and hopes that an inter-governmental memorandum of understanding on establishing the bank can be signed in the coming fall,” he said.
Immediately after the MOU is signed, member countries of the AIIB will start negotiation on the bank’s legal documents so that it can be operational as early as possible, Lou added.
The bank’s creation was put forward by Chinese leaders, including President Xi Jinping and Premier Li Keqiang, during their visits to Southeast Asian countries in October.
Asia’s economy has been growing relatively fast with deepening regional economic and trade cooperation, but it is also facing many challenges, especially as new markets and developing countries have backward infrastructure, Lou noted.
Funds in the current multilateral development banks such as the World Bank and the Asian Development Bank are limited and saving rates are relatively high in many countries in Asia, so it is necessary to consider establishing a new regional platform for investment and fundraising to channel more money into infrastructure, he said.
The fundamental mandate of the AIIB is to promote Asian economic development and regional economic cooperation by providing financing in infrastructure and other productive areas in Asian countries.
“The AIIB will mainly focus on infrastructure construction in Asia to promote regional connectivity and economic cooperation,” Lou said.
“If conditions become ripe, it may also expand its business beyond the region,” he said.
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