China and 20 other Asian countries agreed on Friday to create an international infrastructure bank that Beijing hopes will rival American-led agencies like the World Bank.
Proposed a year ago by Chinese president Xi Jinping, the new "Asian Infrastructure Investment Bank" (AIIB) will offer financing for infrastructure projects in Asia.
China, which has promised to contribute much of the initial $50bn in the AIIB’s 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 organisations that are dominated by the US or Japan.
Some key Asian countries refrained from joining the project, which the US has reportedly been quietly lobbying against. Japan, Australia, South Korea and Indonesia stayed away from the signing ceremony in Beijing.Â
However, India, Malaysia, Thailand, Vietnam and the Philippines were among key developing countries to sign up, news agencies reported.
At the signing ceremony Xi Jinping said the new bank "will help to improve global financial governance," according to Xinhua, the Chinese state-run news agency.
Chinese officials have said that the bank will complement existing lending organisations, not compete with them.Â
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."
Photograph: Chinese Finance Minister Lou Jiwei, centre, signs the MOU establishing the Asian Infrastructure Investment Bank, October 24 in Beijing (Takaki Yajima-Pool/Getty Images)