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India Signs for China's Asian Infrastructure Investment Bank
Oct 27, 2014

China and 20 other countries including India signed a memorandum agreeing to create an International Development Bank that China hopes will rival organizations like the World Bank. But some leading Asian countries refrained from joining the project, which the United States has been quietly lobbying against.

Japan, Australia, South Korea and Indonesia were not represented at the signing ceremony for the bank, the Asian Infrastructure Investment Bank, in Beijing. India joined the bank, along with Malaysia, Thailand, Vietnam and the Philippines.

The bank, proposed a year ago by President Xi Jinping of China, is to offer financing for infrastructure projects in underdeveloped countries across Asia. China, which has promised to contribute much of the initial $50 billion in capital, sees it as a way to increase its influence.

But the United States, with allies like Australia and South Korea has campaigned against the project, characterizing it as an attempt to undercut the World Bank and the Asian Development Bank, which are dominated by the United States and Japan.

Australia has yet to make a decision on joining. The South Korea is willing to participate under certain conditions, including a commitment from the bank to meet international standards on issues like the environmental impact of projects. If such issues are resolved, South Korea will join it.

The 21-nation group comprises Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.

China said the new bank will help to improve global financial governance. The bank is intended to complement existing lending organizations, not to compete with them. The bank would mainly focus on infrastructure construction, whereas the World Bank and Asian Development Bank put their priorities more on poverty reduction.


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