AIIB bid should not af­fect the coun­try’s ties with US: MOF

The China Post - - BUSINESS - BY ENRU LIN

Tai­wan’s bid to en­ter the Asian In­fra­struc­ture In­vest­ment Bank ( AIIB, ) should not af­fect re­la­tions with ei­ther the U. S. or Ja­pan, the Min­istry of Fi­nance ( MOF, ) said yes­ter­day.

In a state­ment re­leased yes­ter­day, the Fi­nance Min­istry’s Na­tional Trea­sury Ad­min­is­tra­tion said 53 na­tions have ap­plied to be­come found­ing mem­bers of China’s new fi­nan­cial ven­ture.

Ap­pli­cants i nclude ma­jor U. S. al­lies like the UK, which de­clared its in­tent on March 12, and France, Ger­many, Italy, South Korea, Australia and New Zealand.

“The two coun­tries of the U. S. and Ja­pan have re­cently ex­pressed that they do not op­pose the estab­lish­ment of the AIIB, and have ex­pressed that the World Bank and the Asian Devel­op­ment Bank ( ADB) can co­op­er­ate with the AIIB,” the state­ment con­tin­ued.

The World Bank is a U. S.- led in­sti­tu­tion, while Ja­pan has sig­nif­i­cant in­flu­ence in the ADB.

“There­fore, af­ter ob­serv­ing the lat­est in­ter­na­tional sit­u­a­tion, we ap­plied to join the AIIB. It should not af­fect our long­stand­ing friendly re­la­tions with the U. S. and Ja­pan,” the Fi­nance Min­istry said.

Tai­wan ap­plied to join the Bei­jing- backed fi­nan­cial in­sti­tu­tion on Tues­day, the ap­pli­ca­tion dead­line for found­ing mem­bers. If ac­cepted, Tai­wan can ex­pect to con­trib­ute NT$ 2.2 bil­lion in cap­i­tal sub­scrip­tion.

‘ Limited cost, mul­ti­ple

benefits’

Based on Tai­wan’s ex­pe­ri­ence in the ADB, po­ten­tial in­vest­ment in the AIIB will be limited, the Fi­nance Min­istry said yes­ter­day.

The AIIB has au­tho­rized cap­i­tal of US$ 100 bil­lion, while the ADB has US$ 163.1 bil­lion. If the AIIB fol­lows a pat­tern of in­vest­ment sim­i­lar to the ADB, Tai­wan’s an­nual con­tri­bu­tion in the fu­ture should be limited, the min­istry said.

Since join­ing the ADB in 1966, Tai­wan has com­mit­ted roughly NT$ 20 bil­lion as of Au­gust 2014 — an av­er­age of only NT$ 42.43 mil­lion a year.

The Fi­nance Min­istry said Tai­wan is ap­ply­ing to join the AIIB un­der the prin­ci­ple of “limited cost, mul­ti­ple benefits.”

Par­tic­i­pa­tion can strengthen in­ter­na­tional ex­changes and have the in­ci­den­tal ef­fect of in­creas­ing cross- strait in­ter­ac­tions.

More­over, membership would re­sult in a “tremen­dous mar­ket op­por­tu­nity” for do­mes­tic man­u­fac­tur­ers. Tai­wan has long- and short- term in­vest­ment funds and ma­ture tech­nolo­gies but suf­fers a limited do­mes­tic mar­ket. Fur­ther re­gional eco­nomic in­te­gra­tion is re­quired in or­der to ex­pand room for trade, ac­cord­ing to the min­istry.

The for­mal state­ment was re­leased in the wake of op­po­si­tion party crit­i­cism that Tai­wan’s AIIB in­vest­ment is a bad risk. In its ed­i­to­rial yes­ter­day, the pan- green daily Lib­erty Times said “AIIB par­tic­i­pa­tion is pay­ing money to be hu­mil­i­ated.”

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