Aus­tralia latest US ally to join China-backed AIIB

The China Post - - INTERNATIONAL -

Aus­tralia said Wed­nes­day it will join the new Bei­jing- led Asian In­fra­struc­ture In­vest­ment Bank as a found­ing mem­ber, con­tribut­ing AU$ 930 mil­lion ( US$ 719 mil­lion) in paid- in cap­i­tal over five years.

Aus­tralia is the latest U. S. ally to sign up to the bank, which has been shunned by Washington and Tokyo, the world’s largest and third- largest economies re- spec­tively.

The AIIB has 57 prospec­tive mem­bers, and will have a paid- in cap­i­tal of US$ 20 bil­lion and to­tal au­tho­rized cap­i­tal of US$ 100 bil­lion, For­eign Min­is­ter Julie Bishop and Trea­surer Joe Hockey said in a joint state­ment.

“The de­ci­sion comes af­ter ex­ten­sive dis­cus­sions be­tween the gov­ern­ment, China and other key part­ners around the world,” the min­is­ters said.

“There is an es­ti­mated in­fra­struc­ture fi­nanc­ing gap of around US$ 8 tril­lion in the Asian re­gion over the cur­rent decade. The AIIB will be part of the so­lu­tion to clos­ing this gap.”

Hockey will seal the agree­ment in Bei­jing on Mon­day.

The bank, ex­pected to be op­er­a­tional later this year and based in the Chi­nese cap­i­tal, has been viewed by some as a ri­val to the World Bank and the Asian De­vel­op­ment Bank, two in­sti­tu­tions un­der strong U. S. in­flu­ence.

Its suc­cess has caught the U. S. off guard, af­ter it led a high­pro­file at­tempt to dis­suade al­lies from tak­ing part, and now finds it­self in­creas­ingly iso­lated.

There have been con­cerns over trans­parency of the len­der, which will fund in­fra­struc­ture in Asia, as well as wor­ries that Bei­jing will use it to push its own geopo­lit­i­cal and eco­nomic in­ter­ests as a ris­ing power.

But Hockey said that fol­low­ing “in­tense ne­go­ti­a­tions” with China and other prospec­tive found­ing mem­bers, Aus­tralia was sat­is­fied with how the bank would be gov­erned.

“We are ab­so­lutely sat­is­fied that the gov­er­nance ar­range­ments now in place will en­sure that there is ap­pro­pri­ate trans­parency and ac­count­abil­ity in the bank,” the trea­surer broad­caster Sky News.

“I have spo­ken with the Sec­re­tary of the U. S. Trea­sury Jack Lew about it in the last 48 hours and we’ve also spo­ken with the Ja­panese gov­ern­ment to ad­dress their con­cerns.

“They ( the Amer­i­cans) un­der­stood ex­actly where we were com­ing from. It is a sig­nif­i­cant op­por­tu­nity for Aus­tralia.”

The Aus­tralian gov­ern­ment ex-

told pects the bank, through its sup­port of Asian in­fra­struc­ture projects, to help boost the na­tion’s ex­ports — in­clud­ing min­er­als, agri­cul­ture and ser­vices — to the re­gion.

Aus­tralia and China signed a land­mark trade deal last Wed­nes­day af­ter a decade of talks that Prime Min­is­ter Tony Ab­bott said would give the two na­tions un­prece­dented ac­cess to each other’s mar­kets.

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