ADB ready to work with new China-led bank, says president

The head of the Asian Development Bank said today he is ready to work with China on a new infrastructure investment bank proposed by Beijing, despite fears it could undermine his institution.
The Manila-based ADB is too large and established to be threatened by the proposed lender, Takehiko Nakao told a foreign correspondents' forum in the Philippines.
"If the AIIB (Asian Infrastructure Investment Bank) is established, we are very happy to have the appropriate collaboration," Nakao said, adding the banks could potentially co-finance projects.
Last month China and 20 other Asian countries signed a memorandum of understanding to establish the AIIB, an institution whose development has been driven by China and which will be based in Beijing, according to the Chinese state news agency Xinhua.

However the proposed lender is seen as a potential rival to existing Western- and Japanese-dominated institutions such as the World Bank and the ADB.
The Japanese government has expressed concern, while the United States is reportedly fiercely opposed to the AIIB, which some analysts see as a venue to expand Chinese influence at their expense.

Nakao stressed there had been "no contact" yet between the ADB and the AIIB, although Chinese officials had discussed the matter with him when he was in Beijing.
He added that it was "understandable" that Asian countries would want such an institution because of the region's huge need for infrastructure financing.

He said Asia needed USD 800 billion a year in funding for infrastructure, particularly for energy and ports. Of the 20 other countries that signed the AIIB memorandum, only India and Singapore are considered large economies.
However Nakao stressed that the ADB had always been active in infrastructure, even as it also supports social services as part of its mission of poverty-reduction.