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China, India launch new Asia Infrastructure Bank
October 24, 2014, 6:28 am

Chinese Finance Minister Lou Jiwei at the signing ceremony of the new infrastructure bank in Beijing on 24th October 2014 [Xinhua]

Chinese Finance Minister Lou Jiwei at the signing ceremony of the new infrastructure bank in Beijing on 24th October 2014 [Xinhua]

In a landmark achievement, 21 Asian nations including China and India on Thursday signed on a new infrastructure investment bank which would rival the World Bank.

The governments of Bangladesh, Brunei Darussalam, Cambodia, China, India, Kazakhstan, Kuwait, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Uzbekistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, Vietnam signed on as founding members of the new Asia Infrastructure Investment Bank (AIIB) in Beijing on Friday.

One of the first projects of the new Bank is expected to be financing infrastructure projects along the “Silk Road Economic Belt” and the “Maritime Silk Road” re-establishment.

Chinese Finance Minister Lou Jiwei said on Friday the “multi-national financial institution which is fair, just, open … with a good governance structure” will be an “efficient financing platform for infrastructure”.

Lou said the AIIB has a different focus than established multilateral organizations such as World Bank and Asian Development Bank (ADB).

China and other emerging economies, including BRICS, have long protested against their limited voice at other multilateral development banks, including the World Bank, International Monetary Fund and Asian Development Bank.

China is grouped in the ‘Category II’ voting bloc at the World Bank while at the Asian Development Bank, China with a 5.5 per cent share is far outdone by America’s 15.7 per cent and Japan’s 15.6 per cent share.

The ADB has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.

Chinese President Xi Jinping had last October proposed to establish the AIIB to boost Asian economic integration and infrastructure projects like roads, railways, ports across the region. The new Bank has a capital target of more than $100 billion.

US allies Japan and Australia alongwith South Korea and Indonesia are notable absentees from the list of nations who signed up for the China-led Bank. The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.

In July, World Bank Group President Jim Yong Kim said that he welcomed a new multilateral infrastructure bank, saying there was a “massive need” for new investment in this area.

The BRICS nations have already announced a $100 billion development bank during the 6th BRICS Summit in Brazil this year.

 

TBP and Agencies

5 Responses to China, India launch new Asia Infrastructure Bank

  1. Victor Reply

    October 24, 2014 at 10:17 am

    World Bank/ADB has been a total failure for the developing nations. Lets hope this new AIIB will prove its effectiveness.

  2. Peta Gallagher Reply

    January 3, 2015 at 5:49 am

    how do invest my super over to brics . i am an austrlian

  3. Suresh Reply

    March 21, 2015 at 2:35 am

    The new bank can learn from mistakes of existing similar instructions and deliver. Since leaders and founders are different this time, I feel a new outlook is possible.

  4. john barbieri Reply

    March 29, 2015 at 10:09 pm

    Asset backed not money out of thin air loaned at interest. The fed needs a good war to continue but nobody’s buying in to it anymore.

  5. justin turner Reply

    January 17, 2016 at 6:05 am

    it is about time the imf and America banking cartel are done finally… good ritance to the thieves. americans have hope,s for better day,s after the removal of the federal reserve banking cartel criminals in Washington d.c.

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