Three of Europe’s largest economies have agreed to join the Asian Infrastructure Investment Bank (AIIB), a $50 billion initiative that aims to inject capital in infrastructure projects across the Asia-Pacific region.
The move, confirmed by officials from Germany, France and Italy today, will ruffle feathers in Washington, where the China-led bank is viewed with suspicion. It comes a few days after the UK, a close US ally, became the first Western nation to defy warnings from the Obama administration by pledging to become a founding member of the bank.
The US sees AIIB as a rival to the World Bank, and wants to have guarantees that the organisation will “incorporate the high standards that the international community has collectively built”. AIIB is part of wider efforts by China to create alternatives to existing multilateral organisations, frustrated as it is by alleged US obstruction to reform Western-dominated institutions.
China last year sponsored the launch of a New Development Bank along with its “BRICS” partners – Brazil, Russia, India and South Africa – as well as the creation of a Silk Road development fund to bolster “connectivity” with its neighbours.
Other countries that previously expressed reserve towards AIIB are also said to be considering joining. These include Australia, South Korea, Switzerland and Luxembourg. Japan, China’s main rival in the region and a close US ally, is not expected to join.
The AIIB was launched by Beijing in 2014 to boost investment in sectors including transportation, energy and telecommunications. China stated earlier in the year that a total of 25 countries, mostly from Asia and the Middle East, had opted to become founding members.
It has also said that the deadline for accepting new founding shareholders is 31 March.