South Korea to join China-led Asian infrastructure bank, the AIIB

South Korea has decided to apply to join the Chinese-led Asian Infrastructure Investment Bank (AIIB), becoming the latest close US ally to sign up despite Washington’s misgivings.

Earlier this month the UK, France, Germany, Italy, Luxembourg and Switzerland applied to join ahead of the 31 March deadline, and Australia is expected seek membership as well.

China and 20 other countries became signatory members of the new lending institution in October 2014 (pictured). 

The US expressed concern about the AIIB on the grounds that it may not have the same standards as the World Bank and affiliated regional lenders, which the US to a large extent controls. 

But South Korea’s finance ministry said in a statement that the AIIB would help funnel more investment into the region.

The ministry appeared to try and soothe American objections. "The government will make efforts in close cooperation with the major countries to help the AIIB possess a high level of standards in the areas of responsibility, transparency, governing structure and debt sustainability," it said, various news outlets reported.

South Korea also said it would demand improvements to the governing structure of the new bank and other safeguards and there has been considerable progress on these issues, the ministry said, without elaborating.

Photograph: Chinese Finance Minister Lou Jiwei, centre, signs the MOU establishing the Asian Infrastructure Investment Bank, October 24, 2014 in Beijing (Takaki Yajima-Pool/Getty Images)

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