Britain bids to join new Asian bank

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Published: Friday 13th March 2015 by The News Editor

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Britain has applied to join a proposed Chinese-led Asian regional bank which the US fears will undercut institutions such as the World Bank.

The British Treasury said it will join talks this month on the Asian Infrastructure Investment Bank’s structure and governance arrangements.

China proposed the bank in 2013 to finance construction of roads and other infrastructure. It has pledged to put up most of its initial 50 billion US dollars (£33.5 billion) in capital.

Twenty-one other governments including India, New Zealand and Thailand have said they want to join. For now, the United States and its close allies Japan, South Korea and Australia are not part of the new club.

The bank is one of a series of initiatives by Beijing to increase its influence in global finance and expand trade links with its Asian neighbours and developing countries in Africa and Latin America.

Washington has expressed concern that the new Asian bank will allow looser lending standards for the environment, labour rights and financial transparency, undercutting the World Bank and International Monetary Fund.

China is the top trading partner for most of its neighbours. They want to promote commercial ties but are uneasy about Beijing’s strategic ambitions, especially at a time when it is embroiled in territorial disputes with Japan in the East China Sea and with Vietnam and other South East Asian neighbours in the South China Sea.

Beijing has tried to soothe security concerns, insisting its initiatives are not aimed at any potential foreign rival.

“The initiatives are not China’s solo, but a symphony performed by all relevant countries,” said Foreign Minister Wang Yi this week, according to Chinese state television.

The British Treasury’s announcement said it would try to ensure the Asian bank “embodies the best standards in accountability, transparency and governance”.

Joining will help Britain promote commercial ties with Asia, said British Chancellor George Osborne in the statement.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” said Mr Osborne.

Other governments joining the bank include Singapore, Vietnam, the Philippines, Mongolia, Laos, Cambodia, Oman, Uzbekistan, Sri Lanka, Qatar, Pakistan, Nepal, Bangladesh, Brunei, Kazakhstan, Kuwait, Malaysia and Myanmar.

In May, Chinese President Xi Jinping called for the creation of a new Asian structure for security co-operation based on a 24-nation group that excludes the United States.

Published: Friday 13th March 2015 by The News Editor

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