China has said that the Asian Infrastructure Investment Bank (AIIB) will be compatible with established international lenders like World Bank and it will not be a competitor to them, as it sought to allay concerns by the US and Japan over the new financial institution.
The AIIB will complement other multilateral financial institutions including the Asian Development Bank and the World Bank and bring mutual benefits to Asian countries and the world, Finance Minister Lou Jiwei said yesterday.
His remarks came after several European countries including Britain, France, Germany, Italy, Luxembourg and Switzerland joined the bank, disregarding US misgivings.
The US has expressed concern over the transparency of the new bank while Japan, which has dominant share in ADB, is yet to make up its mind.
Lou said the AIIB was proposed amid enormous demand for infrastructure investment in Asia and will not compete with existing organisations that aim to relieve poverty.
"History revisited, the establishment of regional investment banks including the ADB and the European Bank for Reconstruction and Development did not weaken established (institutions), rather they reinforced the multilateral financial organizations and more vigorously push forward the global economy," Lou told state-run Xinhua news agency.
As a significant member of the World Bank and the ADB, China will continue to support the existing banks in their work of global poverty relief and development, Lou assured.
He described the establishment of the bank as a "constructive move" that will complement the current international economic order and enable China to shoulder more global responsibility.
Twenty-one countries including China, India and Singapore signed a Memorandum of Understanding (MoU) last October in Beijing to build the bank, to improve lagging infrastructure in emerging Asian economies. As far, the AIIB has already had 27 prospective founding members.
Lou said although the deadline of founder application is March 31, other countries can still join the bank as common members after this date.
The AIIB, which was expected to become operational by end of this year will draw on the experience of established banks and set up a three-tier structure including a council, a board of directors and management, Lou said, promising a supervising mechanism to ensure sufficient, open and transparent policy-making.
Statistics from ADB showed that around USD eight trillion of investment will be needed in the Asia-Pacific region between 2010 and 2020 to improve infrastructure. However, the ADB is only able to provide about $10 billion annually.
The establishment of the AIIB, with an expected initial subscribed capital of $50 billion will be complementary to the ADB and other multilateral financial institutions including the World Bank, a Xinhua commentary said.
Officials say together with China's $40 billion Silk Road fund and $50 billion BRICS Bank, Asia infrastructure investment was expected to pick up in a big way this year.