Japan mulls joining China-proposed new Asian bank

Japan has not ruled out joining a new China-led multilateral development bank and is considering a contribution of about $1.5 billion to its initial capitalisation, according to a draft government paper.

However, the document, contents of which were divulged by the Japanese media on Wednesday, underscored Tokyo's doubts about whether its proposed contribution to the Asian Infrastructure Investment Bank (AIIB), which would be second in size only to that of Beijing, would guarantee it pro-rata influence within the entity, Efe news agency reported.

Since Chinese President Xi Jinping announced the creation of the AIIB in October last year, the Japanese government has repeatedly expressed misgivings about the bank's mechanisms, calling them opaque.

The Japanese government initially dismissed the idea of joining the bank, and on March 31 China closed the doors for nations wanting to join AIIB as founding members.

The new development bank threatens to counter the excessive influence the United States and Japan wield in the World Bank and the Asian Development Bank.

Japan's hypothetical contribution was calculated on the assumption that one-fifth of the bank's $50 billion initial capitalisation would come from member contributions, and 75 percent of that from Asian economies, the draft says.

On that basis, Japan's part was calculated proportional to the nominal gross domestic product of potential participants of AIIB.

The document also suggests that Tokyo joining the AIIB could help improve ties with China, though at a cost to its close relationship with the US.

A negative point, the draft says, would be that the move would "legitimise" what is seen as a tool Beijing can use to widen its sphere of influence in southeast Asia.

The document also asserts that, whether or not Japan joins the bank, Tokyo along with Washington would continue to lobby China to ensure transparent management of the bank.

It raises the possibility of Japan participating in negotiations to frame the Articles of Agreement, or the basic rules governing the bank.

China is set to confirm about 50 founding members of the bank by April 15 and expects to reach an agreement with them on AIIB's Articles of Agreement by the end of June.