United States and Japan Decline to Join China-led International Bank
June 29, 2015
AFP - Countries from five continents formally signed up to the China-led Asian
Infrastructure Investment Bank at a ceremony on Monday, officials said,
as Beijing steps up its global diplomatic and economic role.
Australia was the first country
to sign the articles of association creating the AIIB's legal framework
in the Great Hall of the People, an AFP journalist saw, followed by 49
other founding members.
Seven more are expected to do so by the end of the year.
The bank will have a share capital of $100 billion, with $20 billion paid in initially, the document showed.
The
bank "will provide new opportunities for our businesses and also
promote sustainable growth in Asia", said Singapore's senior minister
for finance and transport Josephine Teo, who represented the city-state.
The
AIIB has been viewed by some as a rival to the World Bank and Asian
Development Bank, and the United States and Japan -- the world's largest
and third-largest economies, respectively -- have notably declined to
join.
Beijing will be by far
the largest shareholder at about 30 percent, the articles of association
posted on the website of China's finance ministry showed. India is the
second biggest at 8.4 percent with Russia third on 6.5 percent.
The
voting structure gives smaller members a slightly disproportionately
larger voice, and a statement accompanying the articles said China will
have 26 percent of the votes.
The share is not enough to give Beijing a formal veto over the bank's decision-making, but it will still have an outsized say.
Among
non-Asian participants, Germany is the largest shareholder with 4.5
percent, followed by France with 3.4 percent and Brazil on 3.2 percent.
The
AIIB is expected to go into operation later this year and its
headquarters will be in Beijing, despite calls from Indonesia that it be
based in Jakarta, further cementing China's prominence in the
institution.
But all financial terms in the agreement are in US
dollars, rather than China's currency, the renminbi, and the bank's
working language will be English.
- Transparency concerns -
Only
50 of the 57 countries that have applied for founding membership signed
up in Beijing on Monday, and the finance ministry said the remainder --
Denmark, Kuwait, Malaysia, Philippines, Poland, South Africa and
Thailand -- have yet to ratify the necessary agreements.
Washington
sought to dissuade its allies from taking part but European countries
including Britain, France and Germany have rushed to sign up as they
seek to bolster ties with the world's second-largest economy.
There
are some 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.
The
articles of association promise the bank will "be guided by sound
banking principles in its operations" and "ensure that each of its
operations complies with the Bank’s operational and financial policies,
including without limitation, policies addressing environmental and
social impacts".
But equally vague statements in the past have done little to soothe critics.
Supporters
say fears over undue Chinese influence are overblown, and that the
participation by more than 50 countries will dilute Beijing's power.
The
articles of association specify that the bank's president must come
from the Asian region and will serve a maximum of two consecutive
five-year terms.
In Tokyo,
Japan's Chief Cabinet Secretary Yoshihide Suga said: "We hope the AIIB
will play a role as a financial institution that contributes to Asia's
development while meeting standards of international institutions,
including for its governance.
"We'd like to watch it closely, including its actual operations."
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