Australia skips China launch of WB rival

Australia, Indonesia, and South Korea have been absent during China’s launch of Asian Infrastructure Investment Bank (AIIB) – seen as a rival to the World Bank.

The memorandum of understanding to set up the infrastructure lender was signed during a ceremony in the Great Hall of the People in the Chinese capital, Beijing, on Friday.

Authorities said the bank aims to meet the need for the construction of dams, ports, power plants and telecommunications networks in Asia.

Media reports said US Secretary of State John Kerry had put pressure on Australia to stay out of the AIIB.

US State Department spokeswoman, Jen Psaki, said, “Secretary Kerry has made clear directly to the Chinese as well as to other partners that we ‎welcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency.

“We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly,” she added.

The Australian Financial Review daily said Kerry had personally asked Australian Prime Minister Tony Abbott to keep Australia out of the AIIB.

“In China we have a folk saying,” Chinese President Xi Jinping said after the ceremony, “If you would like to get rich, build roads first, and I believe that is a very vivid description of the very importance of infrastructure to economic development.”

China, whose president proposed the bank at a gathering of Asia-Pacific nations last year, seeks to play a greater part in international organizations, such as the International Monetary Fund, the World Bank, and the Asian Development Bank, which are dominated by Europe, the US, and Japan.

HN/HMV/SS