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More nations set to join AIIB

2015-03-30 08:44 Global Times Web Editor: Qian Ruisha

Wide-ranging participation 'good for all': expert

Denmark, Australia and Russia announced their intention to join the Asian Infrastructure Investment Bank (AIIB) as founding members over the weekend, expanding the list of potential members to 42 countries as of Sunday.

Denmark announced its intention to join the AIIB on Saturday, making it the first Nordic country to do so, according to a press release the Danish Embassy to China e-mailed to the Global Times Saturday.

China's move to establish the AIIB is "a significant and exciting development," Mogens Jensen, Danish minister of trade and development, was quoted as saying in the press release.

Australia has decided to apply to join the AIIB, Australian Finance Minister Mathias Cormann said at the 2015 Boao Forum for Asia, which was held in South China's Hainan Province, Xinhua news agency reported Saturday.

Denmark and Australia have confirmed their desire to join the AIIB and China welcomes their decision, China's Ministry of Finance said in a statement on its website Sunday.

If all existing members approve the applications, Denmark will be recognized as a founding member of the AIIB on April 12 and Australia on April 13, according to the statement.

Also at the Boao Forum, Russian First Deputy Prime Minister Igor Shuvalov said Saturday that Russia had also decided to join the AIIB.

Everyone knows that Asia will be a major area of economic growth and membership of the AIIB will be crucial for these countries' future development, Ding Yifan, a research fellow with the Institute of World Development at the Development Research Center of the State Council, told the Global Times Sunday.

China has said nations have until Tuesday to join the AIIB as founding members of the bank.

If some countries that are allies of the US have hesitated, they need to take action now, because being a founding member means having a bigger say in the institution, said Ding.

"Developing countries and emerging economies now account for over 50 percent of the world's economy. Their development requires new multilateral financial institutions," Hu Huaibang, chairman of China Development Bank, said at a panel discussion at the Boao Forum on Saturday.

There is huge demand for infrastructure in Asia and the countries that have applied to join the AIIB recognize that the mission of the AIIB is to meet this need rather than challenging the US, Xu Hongcai, director of the Department of Information under the China Center for International Economic Exchanges, told the Global Times Sunday, noting a wide range of participation in the AIIB will "be good for all."

The fact that many European countries, including the UK, have joined the AIIB reflects the rise of China's potential in the context of a multilateral initiative, Martin Jacques, an expert with the Department of Politics and International Studies at Cambridge University, said at the Boao Forum. He noted that the AIIB is focused on Asia, but it has already grown into a global institution.

Asia needs $700-800 billion of investment in infrastructure each year, so the AIIB will only be a supplement to existing international financial institutions in funding infrastructure construction in the region, Li Ruogu, former chairman of the Export-Import Bank of China, said at a panel discussion at the Boao Forum Sunday.

The bank, initiated by China last October to spur infrastructure investment in Asia, has been seen by some Western media outlets and scholars as a rival to the Western-dominated World Bank and the Asian Development Bank.

However, rather than being a rival, the AIIB is supplementary to the current financial institutions, Xu said, adding that China can lead to set up a better governance mechanism for the AIIB.

The governance structure of the AIIB has been a source of concern among Western countries.

"The new institution [AIIB] should not clone the governance of old institutions … we have to be innovative in this," Li said.

Liang Fei contributed to this story

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