China and 21 other countries have agreed to start an international development bank to fund infrastructure projects throughout all of Asia. However, the proposal has drawn criticism from the United States, and three invited countries skipped Friday's bank launch.
China and the other countries have launched what is called the Asian Infrastructure Investment Bank. The member nations include Myanmar, Vietnam, Laos, Cambodia, Vietnam and the Philippines. Among South Asian nations, India, Pakistan, Bangladesh and Nepal are signed up.
In Beijing, China’s Foreign Ministry spokesperson, Hua Chunying, said finance ministers of the membership are looking forward to how the AIIB can improve their countries.
President Xi Jinping met with members of the 21 other countries and said they all expressed a desire to pursue common development. Xi said the AIIB would promote regional development and be inclusive and open.
However, three countries skipped the bank’s launch. Indonesia - Southeast Asia’s biggest economy - was a no show. So were Australia and South Korea, although South Korea said there would be no reason to not join the bank if certain conditions were met.
The proposal for the development bank has met with strong criticism from the U.S. State Department.
Spokeswoman Jen Psaki has said Secretary of State John Kerry has made clear directly to the Chinese that Washington welcomes the idea of an infrastructure bank for Asia, but strongly urges that it meet international standards of governance and transparency. She said the U.S. has concerns about the ambiguous nature of the AIIB proposal as it currently stands.
Washington has also expressed worries the bank will undercut the World Bank and Asian Development Bank.
On Friday, China’s Foreign Ministry responded to that criticism, saying that the bank is intended to satisfy the infrastructure needs in the region.
Spokesperson Hua said China is doing this to promote solidarity, and that the bank will be supplementary and complementary to other banks.
On transparency, Hua said China and the 21 other members will cooperate to make the AIIB’s financing structure open and inclusive.
China proposed the formation of the bank one year ago, and it is expected to begin operations next year. The bank is also fueling concerns that it will allow China to have undue influence in Asia; China will be the largest shareholder with a 50 percent stake, and it will contribute up to $50 billion in capital.
Supporters of the proposal say the bank, unlike the World Bank and Asian Development Bank, will focus on infrastructure projects instead of poverty reduction. In 2009 the Asian Development Bank estimated the region would need $8 trillion in infrastructure investment by 2020.