SHANGHAI (Reuters) - Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank on Friday as the United States said it had concerns about the new rival to Western-dominated multilateral lenders.


China's $50 billion Asian Infrastructure Investment Bank (AIIB) is seen as a challenge to the World Bank and Asian Development Bank, both of which count Washington and its allies as their biggest financial backers.

China, which is keen to extend its influence and soft power in the region, has limited voting rights in these existing banks despite being the world's second-largest economy.

The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent.

Indonesia was not present and neither were South Korea and Australia, according to a pool report.

Japan, China's main rival in Asia and which dominates the $175 billion Asian Development Bank along with the United States, was also not present, but it was not expected to be.

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

However, 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."

In a speech to delegates after the inauguration, Chinese President Xi Jinping said the new bank would use the best practices of the World Bank and the Asian Development Bank.

"For the AIIB, its operation needs to follow multilateral rules and procedures," Xi said. "We have also to learn from the World Bank and the Asian Development Bank and other existing multilateral development institutions in their good practices and useful experiences."

PERSONAL LOBBYING




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

"Australia has been under pressure from the U.S. for some time to not become a founding member of the bank and it is understood Mr Kerry put the case directly to the prime minister when the pair met in Jakarta on Monday ­following the inauguration of Indonesian President Joko Widodo," the paper said.

South Korea, one of Washington's strongest diplomatic allies in Asia, has yet to say it will formally participate in the bank. Its finance ministry said last week it has been speaking with China to request more consideration over details such as the AIIB's governance and operational principles.

"We have continued to demand rationality in areas such as governance and safeguard issues, and there's no reason (for Korea) not to join it," South Korean Finance Minister Choi Kyung-hwan said in Beijing on Thursday after attending a separate regional meeting.

The Seoul-based JoongAng Daily quoted a South Korean diplomatic source as saying: "While Korea has been dropped from the list of founding members of the AIIB this time around, it is still in a deep dilemma on what sort of strategic choices it has to make as China challenges the U.S.-led international order."

The AIIB is expected to begin operations in 2015 with senior Chinese banker Jin Liqun, ex-chairman of investment bank China International Capital Corp, expected to take a leading role.

The memorandum of understanding signed on Friday said authorised capital of the bank would be $100 billion and that the AIIB would be formally established by the end of 2015 with its headquarters in Beijing, state news agency Xinhua said.

Takehiko Nakao, the president of the Manila-based Asian Development Bank (ADB), said the AIIB should function in line with international governance, labour and environmental standards.

"I hope the new bank will adhere to these standards," Nakao told Reuters in a phone interview.

He acknowledged there was an overlap of the AIIB's role with that of the ADB.

"But again, because of very big financing needs of the region it is understandable to have a new idea of establishing a bank," Nakao said, adding: "We will consider the appropriate collaboration after it is really established."

The ADB, created in 1966, offers grants and below-market interest rates on loans to lower to middle-income countries. At the end of 2013, its lending amounted to $21.02 billion, including co-financing with other development partners.

China has a 6.5 percent stake in the ADB, while the United States and Japan have about 15.6 percent each.


Culled from Reuters

I wonder why topics like these don't make the front page, where we could talk about the implication such news has on Africa and all, yet such poo news about Ara's search for younger boys and so on, gets a bigger vote. This site is not a democracy.

Clearly all the moves done by BRIC's so far are to directly compete with the jewish banking system and the US dollar and from the looks of it, they just might win. When the US have to ask others not to join another banking system, you can just how nervous the US truly is and rightfully so.

By getting rid of the dollar as an international currency and most importantly the petro dollar, trillions of worthless paper money will come down crashing on the US and EU countries such as England, France and Germany. Many billionaires agree that the US dollar will get hit badly soon (by 2015) and the US economy will fall hence if you have money, don't invest in the dollar.

Russia and China are buying a lot of gold to get rid of the dollar but somehow, gold prices are being manipulated to remain low. According to specialist around the globe, gold should be at least $2000.00 per ounce right now and keep on moving up and the demand is increasing even from some NATO nations who are getting nervous.

Kitco put out a good piece on the subject called "Gold Friendly BRICS Challenge the Dollar and the Fed".

Many countries are tired of the US games. The only way to defeat the US without shedding a drop of blood is by removing the greenback as the international currency and the Petro dollar. If they managed to accomplish what they clearly want, the US will become irrelevant in no time.

This is quite an interesting era as we just might see either WW3 which would take the US and many other countries out or just the fall of an empire just by affecting it's dollar. Either way, the future is not looking good for the US.

matrixme:
I wonder why topics like these don't make the front page, where we could talk about the implication such news has on Africa and all, yet such poo news about Ara's search for younger boys and so on, gets a bigger vote. This site is not a democracy.

You are right on the money bro. These days topics that grace the front page makes one cringe, reason i stay off nairaland for sometime now. Nairaland front page has gone to the dogs.

Anything the USA didnt initiate is always seen as bad by the USA. Idont know why they dont like competetion.

BRICS is just another predatory capitalist entity. They are no different. Russian is currently trying to bulldoze Zuma into giving entire control of South African nuclear industry into the hands of Russia. They don't want to just make the hardware and let South Africans develop the applications and infrastructure, but they want full control over every aspect. (South Africa used to have nuclear capability under aparthied, but it was dismantled after independence, so it is no newbie) Brazil et al are doing a terrible project in Mozambique, with the collusion of local elites that is not sustainable or directly beneficial to locals, especially those who will be made landless.

It would be nice having an alternative to the WB!

tyson55:
Clearly all the moves done by BRIC's so far are to directly compete with the jewish banking system and the US dollar and from the looks of it, they just might win. When the US have to ask others not to join another banking system, you can just how nervous the US truly is and rightfully so.

By getting rid of the dollar as an international currency and most importantly the petro dollar, trillions of worthless paper money will come down crashing on the US and EU countries such as England, France and Germany. Many billionaires agree that the US dollar will get hit badly soon (by 2015) and the US economy will fall hence if you have money, don't invest in the dollar.

Russia and China are buying a lot of gold to get rid of the dollar but somehow, gold prices are being manipulated to remain low. According to specialist around the globe, gold should be at least $2000.00 per ounce right now and keep on moving up and the demand is increasing even from some NATO nations who are getting nervous.

Kitco put out a good piece on the subject called "Gold Friendly BRICS Challenge the Dollar and the Fed".

Many countries are tired of the US games. The only way to defeat the US without shedding a drop of blood is by removing the greenback as the international currency and the Petro dollar. If they managed to accomplish what they clearly want, the US will become irrelevant in no time.

This is quite an interesting era as we just might see either WW3 which would take the US and many other countries out or just the fall of an empire just by affecting it's dollar. Either way, the future is not looking good for the US.

Bro you can sing me the bold again and again and really it makes the US shiver to her bone marrow.

Me love China

SalC:
Bro you can sing me the bold again and again and really it makes the US shiver to her bone marrow.

even thou he has a point, greenbacks are not the current currency of the united states. They were last issued during the civil war and it was actually a good thing before the international banking cartel killed it.

US does not have the control over the dollar and the only people that would get hurt if the currency is removed is the banking cabal that controls the financial system of major countries.

Now that said, It is a very uphill task to achieve but hopefully one day, every nation can have currencies backed by gold.

“But in civilized society, it is only among the inferior ranks of people that the scantiness of subsistence can set limits on the further multiplication of the human species and it can do so in no other way than by destroying a great part of the children which their fruitful marriages produce ." Adam Smith Wealth of Nations.

"Competition is sin." Rockefeller

"Give me control of a nation’s money supply and I care not who makes its laws." Rothschild

“Slavery is but the owning of labor and carries with it the care of the laborers. While the European plan… Is that capital shall control labor by controlling the wages. This can be done by controlling the money. It will not due to allow the greenback (the debt free currency suggested by president Lincoln) as we cannot control that.” The Hazard circular. July 1862.


Richmond Enquirer, 1856: "Democratic liberty exists solely because we have slaves . . . freedom is not possible without slavery." Senator Robert M. T. Hunter of Virginia (Democrat)

Go figure...

All I'm waiting for is when China revalue Gold and Silver. The derivative market will go poof and the real party begins (:

The beginning of the end of an empire. That idea is what took Gadaffi to his early grave.....