Newspaper article International New York Times

China among 21 Nations to Start Development Bank ; Australia and S. Korea Have Yet to Decide, but U.S. Is Opposing Project

Newspaper article International New York Times

China among 21 Nations to Start Development Bank ; Australia and S. Korea Have Yet to Decide, but U.S. Is Opposing Project

Article excerpt

Australia and South Korea were not among initial participants in the bank, which is to finance infrastructure development in Asia.

China and 20 other countries signed a memorandum on Friday agreeing to start an international development bank that Beijing hopes will rival organizations like the World Bank. But some important regional economies refrained from joining the project.

Australia and South Korea were not represented at the signing ceremony in Beijing for the bank, the Asian Infrastructure Investment Bank, nor was Indonesia, the largest Southeast Asian economy. India did join the bank, as did Malaysia, Thailand, Vietnam and the Philippines, news agencies reported.

The development bank, proposed a year ago by President Xi Jinping of China, is to offer financing for infrastructure projects in underdeveloped countries across the region. China, which has promised to contribute much of the initial $50 billion in capital, sees it as a way to increase its influence in the region after years of fruitless lobbying for more say in other multinational lending organizations.

But the United States has campaigned against the project with allies like Australia and South Korea, characterizing it as an attempt to undercut the World Bank and the Asian Development Bank, which are dominated by the United States and Japan.

Australia has yet to make a final decision on joining the bank, Gemma Daley, a spokeswoman for Joe Hockey, the Australian treasurer, said Friday. The South Korean finance minister, Choi Kyung-hwan, said earlier this week that Seoul was willing to participate if certain conditions were met, such as a commitment to meet international standards on issues like the environmental impact of projects. "If such issues are resolved, there will be no reason for us not to join" the bank, Mr. Choi said Wednesday.

Still, the countries' absence Friday was a blow to the project. …

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