From the BBC
Taiwan and Norway are to join the new Asian Infrastructure Investment Bank (AIIB).
They become the last countries to apply to the China-led bank before the Tuesday deadline.
They join more than 40 members, including Australia, South Korea, Britain, France, and Germany that have signed up to the development bank.
The US and Japan have refused to join, with both countries worried about standards of governance.
There are also concerns over whether loans will carry adequate environmental, labour and social safeguards.
The AIIB will help finance construction of roads, ports, railways and other infrastructure projects in Asia.
It was launched with 21 members in October, and will have an initial capital of around $50bn, with China expected to be the biggest stakeholder.
The US has asked that the bank should work in partnership with existing institutions such as the Asian Development Bank (ADB) and International Monetary Fund (IMF).
Many believe the US’s real concern is that the AIIB will undercut the IMF and World bank and increase China’s influence in the region.
The ADB is traditionally headed by a Japanese official, while the IMF and World Bank are dominated by the US.
Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters that Japan is still seeking answers about how the AIIB would be governed.
He said: “As of today, Japan will not join AIIB and a clear explanation has not been received from China.”
Founding members who apply before the Tuesday deadline will have the right to create the bank’s governance and operational rules.
Countries that join after the deadline will have voting rights, but less say in making the rules.
Both Taiwan and Norway’s applications have political complications.
Taiwan is applying as a country although China has, since 1949, recognised it only as part of its own territory.
China’s Foreign Ministry spokeswoman Hua Chunying said Taiwan’s application should respect China’s requirement that the island not be identified as a separate country.
Beijing cut all high-level ties with Oslo after the Nobel Peace Prize went to Chinese dissident Liu Xiaobo in 2010.
However, Norway’s Foreign Minister Boerge Brende said: “Norway is a substantial contributor to global development efforts, and wishes to join countries from Asia and other parts of the world in further refining the structure and mission of the AIIB,”
The total number of founding members will be confirmed on 15 April.
China’s new development bank is becoming a massive embarrassment for Obama
By Mike Bird
China’s new development bank, which was announced just five months ago, is becoming a massive headache for the US.
Try as it might, the US government can’t persuade its allies to stop joining the Asian Infrastructure Investment Bank (AIIB).
The bank will be a bit like the World Bank, providing loans to developing countries in Asia for infrastructure projects.
Unlike the World Bank, China will hold the reins of the AIIB. The US administration is publicly worried that the institution will not meet high governance standards, but it really seems opposed to the move because it signals a growing Chinese influence in the region and in global politics.
The US has already endured a series of embarrassments over the bank. It might have been expected that some European countries with a cooler relationship with the US would join, which they did. India and Singapore, however, were quick to sign up despite having decent relationships with the US. And several other countries have started joining, leaving the US almost completely isolated in its position.
Britain is one of the US’ closest allies, but the government has been pursuing an unashamedly warmer relationship with China for several years and was one of the first countries to say it wanted a role in the AIIB.
The front page of the Financial Times the next day, in which anonymous White House sources attacked the British government for “constant accommodation” of China, might have been intended as a warning to others, but it doesn’t seem to have worked.
South Korea has applied, and America’s other major allies in the region, Japan and Australia, have been warming to the idea of joining.
Tuesday, however, brought the most embarrassing event of all. Taiwan, which has no formal relationship with mainland China, is a former enemy of China, and basically survived the 20th century with its independence only through assistance from the United States, applied to join the AIIB.
The infrastructure bank isn’t going to be a massive boom for the UK economy, or even for nearer nations like Japan, and the US will not retaliate. The point is that the UK is willing to take a very modest improvement in economic and political ties with China in exchange for a small deterioration in ties with the US. Pretty much every country has decided that this is the right move.
The AIIB is a part of the wider “new Silk Road” initiative by China to deepen trade and investment both in the rest of Asia and the wider world. According to Barclays, it could actually be a positive thing for the region’s stability:
We believe through the building of interdependent relationships based on shared economic interests, this New Silk Road plan should deepen political linkages, improve mutual understanding and foster long-term stability in the region. The agreement to set up the AIIB by countries that have territorial disputes with China suggests potentially lower geopolitical risks and lower probability for military conflicts, in our view.
But the move goes beyond that — it’s a major PR push for China, which the American administration has positioned itself opposite from. So far, that strategy is failing spectacularly for the US.