China launches World Bank rival in Asia

[Camilo]

http://news.yahoo.com/china-20-other...--finance.html

Beijing (AFP) - China and 20 other countries moved forward on Friday towards setting up an Asian infrastructure lender seen as a counterweight to Western-backed international development banks.

The signatories put their names to a memorandum of understanding to establish the Asian Infrastructure Investment Bank (AIIB) at a ceremony in the Great Hall of the People in Beijing.

The institution, whose development has been driven by China, will be based in Beijing according to the official news agency Xinhua, and is expected to have initial capital of $50 billion.

It is intended to address the region's burgeoning demand for transportation, dams, ports and other facilities, officials say.

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

China's rise to become the world's second-largest economy has been accompanied by a desire to play a greater role in international organisations, such as the International Monetary Fund, the World Bank and the ADB, which have been dominated by Europe, the United States and Japan.

But other than China, among Asia's 10 largest economies only India and Singapore signed the AIIB memorandum, with three of the top five -- Japan, South Korea and Indonesia -- notably absent.

The Japanese head of the Asian Development Bank, another regional lender, said after the signing ceremony that questions remained over the AIIB's structure and that it needed to adhere to international standards.

"It is vitally important that AIIB adopt international best practices in procurement and environmental and social safeguard standards on its projects and programmes," ADB President Takehiko Nakao said in a statement.

The Japanese government has expressed concern, while the United States is reportedly fiercely opposed to the AIIB.

- 'Good practices' -

China maintained it is open to more countries joining, and said it was still in talks with the US and Japan on the issue.

"We have maintained communication with the US, Japan, Indonesia and other countries," Chinese foreign ministry spokeswoman Hua Chunying said at a regular briefing.

"We welcome the participation of other countries in the process, and we will stay in contact with all relevant parties."

Xi moved to reassure after the signing. "For the AIIB, its operation needs to follow multilateral rules and procedures," he said.

"We have also to learn from the World Bank and the Asia Development Bank and other existing multilateral development institutions in their good practices."

The MOU signatories will negotiate the bank's specifics in the coming months and expect to finish by the end of next year, according to a statement from Singapore's finance ministry.

World Bank President Jim Yong Kim said in July that estimates for infrastructure needs in developing countries are at least $1 trillion annually, far beyond the current capacity of his institution and private investment to handle.

"We think that the need for new investments in infrastructure is massive and we think that we can work very well and cooperatively with any of these new banks once they become a reality," Kim told reporters in Beijing.

[MorningSong]

Interesting....

Deal Set on China-Led Infrastructure Bank

By BREE FENGOCT. 24, 2014

BEIJING — China and 20 other countries signed a memorandum on Friday agreeing to create an international development bank that Beijing hopes will rival organizations like the World Bank. But some leading Asian countries refrained from joining the project, which the United States has been quietly lobbying against.

Japan, Australia, South Korea and Indonesia were not represented at the signing ceremony for the bank, the Asian Infrastructure Investment Bank, in Beijing. India joined the bank, along with Malaysia, Thailand, Vietnam and the Philippines, news agencies reported.

The bank, proposed a year ago by President Xi Jinping of China, is to offer financing for infrastructure projects in underdeveloped countries across Asia. 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, with allies like Australia and South Korea, has campaigned against the project, characterizing it as an attempt to undercut the World Bank and the Asian Development Bank, which are dominated by the United States and Japan.

Mr. Xi, meeting with representatives of the founding members after the signing ceremony, said the new bank “will help to improve global financial governance,” according to Xinhua, the Chinese state-run news agency.

Australia has yet to make a decision on joining, Gemma Daley, a spokeswoman for Joe Hockey, the treasurer of Australia, said on Friday. The South Korean finance minister, Choi Kyung-hwan, said this week that Seoul was willing to participate under certain conditions, including a commitment from the bank 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,” Mr. Choi said on Wednesday.

Still, the countries’ absence on Friday was a blow to the project.

Chinese officials have said that the bank is intended to complement existing lending organizations, not to compete with them. In March, Lou Jiwei, the Chinese finance minister, said the bank would “mainly focus on infrastructure construction,” whereas the World Bank and Asian Development Bank “put their priorities more on poverty reduction.”

The Asian Development Bank’s president, Takehiko Nakao, disputed that view on Thursday. “There’s a misunderstanding that the A.D.B. is for poverty reduction and the A.I.I.B. is for infrastructure, but the majority of our banking is to infrastructure,” Reuters quoted him as saying.

China already directly finances many infrastructure projects in the developing world, and many Chinese analysts see the bank as a sensible next step.

Wang Yong, director of Peking University’s Center for International Political Economy Research, said it was natural for China to work with other countries to fill the investment gap in infrastructure, which he called “tremendous.” The Asian Development Bank estimated in 2009 that the region would need $8 trillion in infrastructure investment by 2020.

http://www.nytimes.com/2014/10/25/wo...bank.html?_r=0

[Rocky_Shorz]

very interesting after hearing from Ben, the Fed changed hands on the 18th...

[ghostrider]

throws a wrench in the controllers plans to enslave the world ...They don't like competition , it will be interesting to see what happens over the next week or so ...

[Milneman]

Oh my goodness if they can't have their little fingers in everything to 51% they just won't be happy at all now will they???

Source: https://youtube.com/watch?v=DP4Va75FLBo