Australia intends to sign up to the Asian Infrastructure Investment Bank (AIIB), the so-called China Bank, the representative of federal government said on Sunday March 22. The government intentions is to sign up before the March 31 deadline would allow Australia to participate as a founding member in negotiations to set up the bank.
The Australian prime minister said that working with other key multilateral institutions such as the World Bank and the Asia Development Bank, the new bank has the potential to play a valuable role in addressing infrastructure needs and robust economic growth in the region.
Russia is also to sign up to the Chinese-led development bank AIIB, first deputy prime minister Igor Shuvalov said at an international forum in China, cited by Russian news agencies.
China’s efforts to found a new Asian Infrastructure Investment Bank were at the beginning quite problematic. Strong pressure from USA (president Obama himself) towards biggest and influential countries in the region, such as Australia and South Korea, were visible and commented. However, China has won, gaining the support of American allies not just in Asia, but in Europe. The Beijing-backed AIIB was unveiled in October, as a multinational lender that the United States perceived as a threat to the Washington-led World Bank, IMF and Asia Development Bank. All these institutions definitely influenced by USA and Japan.
At first, USA was able to discourage some of its closest Asian allies from joining the initial 21 founding members. Australia, Japan and South Korea all stayed out – though other obvious American friends such as New Zealand, Singapore and Thailand signed up. However, before the dead-line – March 31 2015 – closing the list of funding members has significantly enlarged – up till more than 30 countries.
The initiative has proved highly successful with countries that are traditionally US allies. Britain, Germany, France, Italy and last week of March even South Korea and Australia – all announced that they intend to join the US 50 billion USD (63,94 billion AUD) bank.
What’s more, International Monetary Fund head Christine Lagarde has welcomed Beijing’s creation of a new infrastructure bank AIIB. She made comments as she briefed up a five-day visit to China and after an important European countries announced their intention to sign up for the China-led bank. Lagarde said the IMF would be „delighted” to co-operate with the new bank, according to China’s official Xinhua news agency.
World Bank Managing Director Sri Mulyani Indrawati has also approved the AIIB, telling Xinhua agency: ‘Any new initiative that will mobilize funding in order to fill the infrastructure gap is certainly welcome’.
Moves by Britain, Germany, France, Italy and others have caused consternation in the United States and Japan, which lead the World Bank and the Manila-based Asian Development Bank respectively.
China is apparently in frustration that the existing international order is not able to accommodate its astonishing rise. Efforts to reform the International Monetary Fund to give China more voting rights are stalled in the American Congress. America maintains its traditional grip on the management of the World Bank. The Manila-based Asian Development Bank (ADB) is always directed by a Japanese official.
USA turned the AIIB idea into a diplomatic test that has proved a disaster. Its officials have, anonymously, accused Britain for its “constant accommodation” of China. A growing number of policymakers, business leaders and commentators however are voicing their concerns about the US effort to sabotage China’s new international economic initiative. Granted, China is not doing this as a Good Samaritan, but to further its economic and geopolitical interests. However, at the same time, Asia is facing a massive deficit in infrastructure investment. Recent study by the ADB in 2009 delivered a number on it: 8 trillion USD between 2010 and 2020, of which 68% would be for new capacity, 51% would be for electricity, 29% for roads and 13% for telecommunications. China has both the experience and money to change that.
 In a joint statement with Foreign Minister Julie Bishop and Treasurer Joe Hockey Prime Minister Tony Abbott said the government has discussed the bank extensively with China and key partners inside and outside the region. Business Spectator.com.au
 „I’d like to inform you that Russian President Vladimir Putin has taken the decision that Russia will participate in the capital of the Asian Infrastructure Investment Bank (AIIB)” Mr Shuvalov said on Saturday at China’s Boao Forum – quoted by RIA Novosti state news agency.
 In a statement issued after Lagarde met prime minister Li Keqiang, she hailed Beijing’s „impressive efforts” to reform in areas including combating corruption, controlling pollution and „clearing the path to even more engagement with the world”.